Business
Russia allows state firms to buy stocks and bonds to boost market
Russia allows state firms to buy stocks and bonds to boost market
About this update from Moscowexchange
The Russian government has allowed state companies such as nuclear monopoly Rosatom or Russian Railways to buy shares and bonds on the market with their surplus cash, in a move seen as boosting the stock market following the latest round of U.S. sanctions. Russia's MOEX stock market index is down 12.5% in 2025, according to data from the exchange, due to high interest rates, which increase the appeal of bank deposits, as well as pressure from Western trade measures. “The implementation of the resolution will increase the involvement of state-owned companies and state corporations in investing in the Russian stock market," the Finance Ministry said in a statement. RETAIL INVESTORS DOMINATE MARKET Since an exodus of foreign investors after Russia launched what it calls its "special military operation" in Ukraine, the Russian stock market has been dominated by retail investors, while the Moscow Stock Exchange is the subject of Western sanctions.President Vladimir Putin ordered authorities to raise the capitalisation of the stock market to 66% of gross domestic product (GDP), from 27%, in 2024 but companies have been reluctant to place shares, arguing that the market is too shallow. The stock market index rose by 1.2% on Wednesday, data on the exchange's website showed, and analysts said the move may encourage firms to raise equity financing, although some stressed that in the short term bank deposits looked still more attractive. "This is a long-awaited development for the Russian market, which in the long term could significantly alter the balance of power and restore the dominance of smart money over retail investors," said analysts at IFK Solid brokerage in a research note.