MSCI Inc. and FTSE Russell are cutting Russian equities from widely tracked indexes, while the London Stock Exchange has suspended dozens of Russian depositary receipts from trading, isolating the stocks from a large segment of the investment-fund industry.
An overwhelming majority of market participants see the Russian market as "uninvestible" and its securities will be removed from emerging markets indexes effective March 9, MSCI said. FTSE Russell will delete Russia constituents listed on the Moscow Exchange at a zero value on March 7. Meanwhile, trading in 28 depositary receipts for Russian companies has been suspended on the LSE, CEO David Schwimmer said in an interview with Bloomberg Television on Thursday.
Russia's links with global markets are getting cut with its foreign reserves frozen after it invaded Ukraine, while Moscow's capital controls and a ban on foreigners selling securities locally have shut the exit for international investors. The latest blow comes as buyers shun Russian oil exports, while its bonds get cut to junk status and companies including Shell pull out.