Sanctions are helping Russian corporations do the right thing
After the London Stock Exchange (LSE) suspended share trading of sanctioned energy conglomerate EN+Group, other Russian firms are thinking of scrapping their stock listings in the UK in favor of the Moscow Stock Exchange (MOEX).
Cherkizovo Group, one of Russia’s major producers and processors of poultry and pork, is considering a move to MOEX after the firm delisted from London last year, reports Bloomberg. TMK, Russia's largest manufacturer of steel pipes for the energy sector is mulling a similar move, according to the deputy chief executive officer of the company, as quoted by the media.
“It really doesn’t make sense for Russian companies to list abroad in the current environment,” Ekaterina Iliouchenko, a money manager at Frankfurt-based Union Investment Privatfonds GmbH told the agency. The analyst stressed that the new round of sanctions could force foreign exchanges to block transactions with their liquidity to “drop dramatically as foreigners exit.”
The Moscow Exchange has been rapidly revamping over the recent years with its operations significantly improved. At the same time, the Russian central bank policy has become more predictable and transparent with the risks of capital controls disappeared. The bourse currently handles some 60 percent of the trading volume of dual-listed stocks against 44 percent four years ago.
“It doesn’t really make much sense to trade via GDRs [global depository receipts],” Pavel Laberko, a London-based money manager at Union Bancaire Privee, said.
The trend of fleeing from foreign stock exchanges has been spurred by the EN+ Group's suspension from trading on the LSE after the company and its owner Oleg Deripaska were sanctioned by the US earlier this year. The Russian firm was hit by US sanctions five months after a $1.5 billion listing in London and Moscow.