Russian stock market, crushed by war, will partially reopen today

Russia is reopening its stock market for limited trading nearly one month after shares plunged and the exchange was shut down following the invasion of Ukraine, the Associated Press reported.

There will be heavy restrictions on trading Thursday as the exchange opens to prevent the kind of massive selloff that took place on Feb. 24 in anticipation of crushing financial and economic sanctions from Western nations.

The reopening of the Moscow exchange has only minimal significance for investors outside Russia and scant economic impact compared with barrage of U.S.-led sanctions and withdrawals by foreign corporations.

The average exposure by a U.S. investor through a mutual fund or retirement account to Russia is exceedingly small, according to Ben Johnson, director of global ETF research at Morningstar.

“If someone is holding a traditional 60% stock, 40% bond portfolio matched to a global index, their exposure to Russia would be roughly 0.02% of their portfolio,” Johnson said. “Russia barely registers.”

Hundreds of U.S., European and Japanese companies have pulled out of the country; there have been bank runs and panic buying of staples like sugar; and Russia’s currency, the ruble, has languished.

Under the restrictions in place, foreign shareholders will be unable to sell shares _ a rule imposed to counter Western sanctions against Russia’s weakening financial system and currency.

Trading will be allowed in 33 of the 50 companies that are part of the country’s benchmark MOEX index, including air carrier Aeroflot, state-owned gas producer Gazprom and the oil company Rosneft, according to a central bank announcement about the reopening.

Stocks last traded in Moscow on Feb. 25. A day earlier the MOEX sank 33% after Russian forces invaded Ukraine.

Investor sentiment could be difficult to judge given the restraints in force. The country has banned short-selling, in which investors essentially bet on stock prices to go down.

Moscow’s stock exchange is tiny, with a market capitalization of about $773 billion at the end of last year, according to the World Federation of Exchanges. That is dwarfed by the New York Stock Exchange, where the total of all equities is roughly $28 trillion.