Mar 25, 2022 - Economy

Russia reopens "Potemkin" stock market after a monthlong closure

Data: FactSet; Chart: Axios Visuals
Data: FactSet; Chart: Axios Visuals

The Moscow Stock Exchange reopened yesterday — kind of — after a monthlong closure that followed the start of the war in Ukraine. The benchmark ruble-denominated index, known as the Moex, rose 4.4% yesterday, and then fell 3.7% today.

The big picture: The reopening was heavily managed by Russian authorities.

  • Foreigners weren't allowed to sell.
  • Traders weren't allowed to short stocks, that is, bet prices will fall.
  • The Russian government said it told its sovereign wealth fund to pour some $10 billion into stocks.

U.S. officials mocked the reopening, comparing it to the famously fraudulent "Potemkin Villages" that a courtier of Catherine the Great's once had built before a royal visit, in order to impress his patron.

  • "What we’re seeing is a charade: a Potemkin market opening," said Daleep Singh, deputy national security adviser for international economics, in a statement. "This is not a real market and not a sustainable model — which only underscores Russia’s isolation."

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