The Moscow Stock Exchange ended 2021 in style, with money and investors in abundance, but the invasion of Ukraine has caused an unprecedented crash and closure that leaves many Russians standing in the lurch.
On the morning of February 24, the stock exchange opened as usual but the world had changed. During the night, Russian troops had entered Ukraine.
The Moex index plummeted by 33%, bringing nearly $190 billion to evaporate in a single day.
On February 25, the stock exchange decided to close most of its activities, a closure that will last until at least March 21.
Since then, the assets of the Russians — who had invested en masse in the stock market in recent years in the hope of getting rich — have been frozen.
“I feel totally frustrated. I don't know what to do,” Anna Mechtchanova, a 30-year-old graphic designer, told AFP.
He started investing three years ago after discovering a financial blog.
“I thought it was very important to have a financial 'airbag' and a good pension, since there is no certainty that the State will provide a good amount of money in old age,” he recalls.
During the pandemic, he invested mainly in Russian and US stocks about 10,000 rubles a month (about 90 dollars today, 150 dollars from then).
But now he considers his money “already lost”. When the stock exchange is reopened, it calculates its losses at $4,500.
- 2021, year of prosperity -
Russian stock exchanges and banks had been working to attract individuals for years, with apps, podcasts, and financial blogs.
“In 2021, we recorded a huge influx of individuals to the stock market, both on the Moscow and St. Petersburg stock exchanges. This trend began as early as 2019, when intermediaries simplified the procedure for investors,” says Alexander Saiganov, head of analysis at Invest Heroes.
The number of individual investors in Russia grew from two to three million in 2018 to more than 15 million in 2021.
In 2021, the Moscow Stock Exchange, the largest in the country by far, was driven by recovery from the pandemic and reached record levels of investment, with six IPO, the first in years.
However, starting in October, geopolitical turbulence, a prelude to the conflict in Ukraine, began to affect assets.
Despite this, the Moscow stock exchange presented new services at the end of 2021 with the aim of reaching 25 million retail investors by 2022.
“We are not just a stock exchange, but a technology company,” Igor Maritch, Director of Sales and Development, said at the time.
- 2022, black year -
“Until February 24 of this year, I was sure that money kept in the bank or in an investment account would always be there, that it would always help me. But I was wrong,” regrets Anna Mechtchanova.
“I understand that I am now completely unprotected. The only thing left for me is to keep at least some cash in foreign currency,” he says.
Analyst Alexander Saiganov remains optimistic and believes that “the Russian market will survive” as a “way to keep savings in rubles to protect against inflation”, which exceeded 9% year-on-year in February and is expected to skyrocket in the coming months.
The reopening of the stock market, probably in a phased manner, at the earliest on Monday, now depends on the authorization of the central bank.
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