{"id":187570,"date":"2019-04-30T07:03:32","date_gmt":"2019-04-30T07:03:32","guid":{"rendered":"http:\/\/www.thetruthseeker.co.uk\/?p=187570"},"modified":"2019-05-03T06:50:15","modified_gmt":"2019-05-03T06:50:15","slug":"russias-stock-market-up-100-since-sanctions-declared-5-years-ago","status":"publish","type":"post","link":"https:\/\/www.thetruthseeker.co.uk\/?p=187570","title":{"rendered":"Russia\u2019s Stock Market up 100% Since Sanctions Declared 5 Years Ago"},"content":{"rendered":"

Kenneth Rapoza \u2013 Forbes April 23, 2019<\/h1>\n
\"\"<\/a>

Moscow’s growing skyline. Click to enlarge<\/p><\/div>\n

The Moscow Stock Exchange continues to break records despite sanctions on its most important companies,<\/strong> including banking giant Sberbank and the world\u2019s largest natural gas exporter, Gazprom. But despite pretty lousy sentiment on all-things Russia-related, the Moscow Russia Index is up over 100% in rubles in the last five years. It\u2019s now at a record high.<\/strong><\/span><\/p>\n

\u201cIt\u2019s actually amazing how well Russia has done given sanctions and sentiment,\u201d says Chris Gaffney, president of world markets at TIAA\u00a0Bank. \u201cIt makes you wonder what would happen if Russia had sanctions reprieve. I think the market would grow like a monster.<\/strong> And if you consider Trump possibly starting a trade war with Europe, then Europe may be the first to lift its sanctions on Russia in retaliation,\u201d Gaffney says, thinking out loud on the possibilities for Russian securities should investor sentiment improve.<\/span><\/p>\n

The MOEX Russia reached a new historical maximum on Tuesday during intraday trading<\/strong><\/span><\/a>, hitting 2,599.58 points\u00a0before selling off slightly when the market closed.\u00a0The previous intraday record was set on April 10\u00a0when the MOEX reached\u00a02591.69 points.<\/span><\/p>\n

Sanctions have largely served to shut Russia\u2019s leading banks out of the bond market, making it impossible for them to capture low-interest rate loans in euros and dollars. For oil and gas firms, the sanctions mainly bans U.S. companies from working with the likes of Gazprom and Rosneft, Russia\u2019s biggest oil company, on certain projects. Most of those sanctions target the selling of goods and joint ventures related to offshore drilling operations, or new technologies that would help Russia with horizontal drilling techniques.<\/strong><\/span><\/p>\n

Russia may be rising in spite of itself, too.<\/span><\/p>\n

Higher oil prices \u2014 thanks in part to the end of waivers on Iran oil shipments, and a return to sanctions on Iranian crude \u2014 has oil over $70 a barrel. The ruble reacted this week to Washington\u2019s removal of waivers\u00a0was subdued, which is good for Russian oil companies who benefit from a weaker currency.<\/span><\/p>\n

Since the beginning of the year, oil prices have increased by 38% with prices going up by around 9% this month alone.<\/span><\/p>\n

Still, not only the oil sector is gaining in Russia. Yandex, the country\u2019s biggest tech company, is up 38.2% in dollars. Mobile TeleSystems is up over 15%, which doesn\u2019t look like much but it\u2019s better than the MSCI Emerging Markets Index. The VanEck Russia (RSX) exchange traded fund is the second best BRIC ETF, trailing the iShares MSCI China (MCHI) fund. Russia is the second best emerging market this year.<\/strong><\/span><\/p>\n

Both Russia and China got beat up last year, most of it thanks to Washington politics.<\/span><\/p>\n

But with the trade war on pause and with new sanctions on hold, China and Russia have had a good run for investors.<\/strong><\/span><\/p>\n

Russia has become more insular since sanctions began in 2014. Sanctions started due to Russia\u2019s involvement in Ukraine in 2014. Russia annexed Crimea and backed separatists in east Ukraine provinces that were known as the country\u2019s industrial hub, severely injuring the Ukrainian economy.<\/span><\/p>\n

Russia\u2019s central bank also deserves some credit. It\u2019s kept inflation and interest rates under control.<\/strong><\/span><\/p>\n

Also worth noting, the ruling United Russia party passed unpopular pension reform, helping clean up some Russian debt at a time when it remains unclear if Russia will ever be able to take on lower cost loans in dollars and euros.<\/strong><\/span><\/p>\n

Russian interest rates are\u00a07.75% and expected to remain unchanged at the next monetary policy meeting on April 26.<\/span><\/p>\n

New companies are expected to list on the Moscow Stock Exchange later this year.<\/span><\/p>\n

Dividend payouts in June will likely cause a reverse-course for the MOEX, but if oil remains over $70 and if the sanctions threat is no longer top of mind, Russia could beat out China this year as the best emerging market.<\/strong><\/span><\/p>\n

Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This confirms the impressions from my last few trips to Moscow. Without sanctions it would be booming but even with them Russia\u2019s economy is robust and growing<\/p>\n","protected":false},"author":39262,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[66,91],"tags":[],"class_list":["post-187570","post","type-post","status-publish","format-standard","hentry","category-Economics","category-russia"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/187570","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/users\/39262"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=187570"}],"version-history":[{"count":3,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/187570\/revisions"}],"predecessor-version":[{"id":187574,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/187570\/revisions\/187574"}],"wp:attachment":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=187570"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=187570"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=187570"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}