Money and Markets

London scraps trading Russian shares following 99% drops, as Moscow closes stock exchange for 4th day

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London's stock exchange said it would suspend trading in Gazprom and other Russian companies. INA FASSBENDER/Getty Images
London's stock exchange said it would suspend trading in Gazprom and other Russian companies. INA FASSBENDER/Getty Images
  • The London Stock Exchange suspended trading in Russian stocks on Thursday after some plunged as much as 99% this year.
  • Russia's central bank said the Moscow stock exchange will stay closed for the fourth day in a row.
  • Global investors have rushed to dump Russian assets as the war in Ukraine rages and Western sanctions hit hard.
  • For more stories to to www.BusinessInsider.co.za.

The London Stock Exchange has suspended trading in a number of Russian companies after their shares collapsed as much as 99% as a result of the Ukraine conflict and ensuing Western sanctions.

Meanwhile, Russia's central bank said the main stock market in Moscow would remained closed for a fourth day as US financial institutions labelled the country's assets "uninvestable."

London's exchange said it would halt trading in the depositary receipts of a number of major Russia companies including Sberbank, the country's biggest lender, and energy giants Gazprom and Lukoil. Depositary receipts are certificates that represent foreign shares.

Russia's invasion of Ukraine last week triggered chaos in the country's markets, with Moscow's MOEX stock index plunging as much as 50% in a day.

Russia's central bank has ordered the stock exchange to stay closed this week, seeking to avert a further collapse in prices. Its government has told the sovereign wealth fund to release up to $10 billion to support the market when it reopens.

However, the closure of Moscow's market hasn't stopped global investors from dumping any company with connections to Russia.

On Wednesday, Sberbank crashed as much as 95% on the London stock exchange, to as low as $0.01, taking its losses for the year to more than 99%. Gazprom plunged as much as 97%, and Lukoil dropped 95%.

The London Stock Exchange said on Thursday that it was suspending trading in more than 20 companies, "further to recent sanctions in connection with events in Ukraine, in light of market conditions, and in order to maintain orderly markets."

Overnight MSCI, a powerhouse in the world of stock indices, said clients had told it that the Russian equity market "is currently uninvestable."

It said it was therefore cutting Russian stocks from its closely-followed emerging market indices, in a move that could slash the amount of investment going toward Russian companies.

MSCI said it would move the stocks to new standalone indices "at a price that is effectively zero." FTSE Russell, another leading indexing company, said it would also remove Russian stocks from its benchmarks.

The US and its allies have imposed tough financial sanctions on Russia, including cutting some of its biggest banks out of the crucial SWIFT global payments messaging system.

Western governments have also clamped down on the Bank of Russia's ability to use its currency reserves to get round sanctions. The US has blocked Americans from engaging in any transactions with the central bank.

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