It is one thing for western companies, funds, investment trusts and others to promise to divest from Russian assets. But what if the Russian authorities won’t let you? The Moscow stock market has failed to open for a fifth day running. Prior to its closure, it had already plummeted by a third after the invasion of Ukraine. Russian investments traded on external markets have continued to plummet during the closure: JP Morgan Russian Securities, an investment trust traded on the London Stock Exchange, plunged by another 15 per cent this morning to 101 pence – just one-eighth of what it was trading at last autumn.
Is that a bargain? ‘Buy on the sound of gunfire’, goes the old stock market adage. Well, maybe, if you are buying stocks in other world markets, which have also plummeted this week but where you can be reasonably sure that capitalism will continue, and where markets will surely recover to some kind of normality once the crisis has subsided. You might not even have to wait for the crisis to be over. You would have done yourself a big favour dipping into the market on 23 March 2020, after four weeks of a savage bear market provoked by Covid-19. The pandemic had hardly begun, yet that was the day that stock markets around the world bottomed out before recovering strongly.
But in Russia’s case, there is a very big risk that you will never see your money again – any of it. Will the Moscow stock market ever reopen, or will Russia revert to being a closed economy, with the assets of western investors seized by the Russian state – or, even worse, by Putin’s cronies?
Closing stock markets in the face of plunging prices is not a tactic restricted to Putin’s Russia.