Page 102 - RusRPTFeb23

shares of the 42 largest Russian companies) lost almost 45% over the year, and the dollar RTS lost almost 40%.
In conditions of increased volatility, investors' holdings in Russian shares turned out to be the least protected – some securities lost more than 50% of their value.
Foreign markets were also in the red – the S&P 500 lost about 20%. Simultaneously, infrastructural risks materialised: the foreign assets of Russians were frozen, first due to communication problems caused by sanctions against the Russian financial sector, and then due to sanctions against the National Settlement Depository (NSD) that holds the foreign assets of Russian investors.
At the end of 2021, Russian shares were the best performing in the world, but that changed abruptly after the invasion of Ukraine. In 2022, the quotes of almost all Russian securities showed a significant decline and foreign investors have been barred from withdrawing their money completely.
In the first week of the new year the government announced that foreign investors could only withdraw their money if they were willing to sell them at a 50% discount. And even then, the proceeds of a sale would be converted into rubles and help on special bank accounts. If the investor then wanted to expedite repatriation and take this money out of the country in dollars – for which special permission from the Central Bank of Russia (CBR) is needed – then the investor would have to make an additional “voluntary” contribution to the budget of 10% of the value of the shares.
On top of the crash in share prices, a number of companies refused to pay dividends, which also led to a reduction in the yield of securities for investors.
The annual returns from Moscow exchange index since the beginning of the year have been approximately minus 40%, BCS GM reports. This is the worst indicator since 2008 index fell by 60%.
The maximum drop was observed in companies that suspended the payment of dividends, led by Russian banks, which the CBR advised to cancel distributing profits by dividends.
For example, the shares of state-owned VTB fell by 66% over the year, and its sister bank Sberbank was down by 52%.
In addition, there was a significant drop in technology companies. The shares of leading employment agency HeadHunter fell by 69% and tech giant Yandex plunged by 60%. National airline Aeroflot was down 58% and gold miner Polymetal by 72%.
The shares of companies that earn the majority of their revenue in the domestic market turned out to be more stable. Supermarket giant Magnit saw its shares tumble by only 20%, while leading mobile phone company MTS took a 21% hit. The shares of fixed line operator Rostelecom were down by 35%.
102 RUSSIA Country Report February 2023 www.intellinews.com