Moscow shares snub is new blow for Putin as Government moves to further isolate the Russian economy
The Moscow Stock Exchange will lose its status as a recognised market as the Government moved to further isolate the Russian economy following the invasion of Ukraine.
The decision by HMRC means investors with shares in companies listed in Moscow will no longer be able to access certain tax benefits such as being able to include the stocks in Individual Savings Accounts (ISAs).
‘As we continue to isolate Russia in response to their illegal war on Ukraine, revoking Moscow Stock Exchange’s recognised status sends a clear message – there is no case for new investments in Russia,’ said Financial Secretary to the Treasury Lucy Frazer.
Frozen out: Shares in companies listed in Moscow will no longer be able to access certain tax benefits such as being able to include the stocks in Individual Savings Accounts
HMRC said the decision was made in response to a ban by Russia’s central bank on foreign investors selling shares in Russian companies, which meant the Moscow market was ‘no longer operating in line with the normal commercial standards expected of a recognised exchange’.
The Government’s move came as Vladimir Putin signed legislation over the weekend that would compel Russian firms to delist from foreign stock exchanges.
The law could see major Russian firms such as Gazprom, Sberbank, Lukoil and Rosneft, forced to scrap their listings in London.
Russian aluminium giant EN+, which also has a secondary listing of its shares on the London Stock Exchange (LSE), said it was ‘evaluating’ its options.
The LSE suspended trading last month in multiple Russia-based companies after their prices crashed to record lows following Putin’s decision to send tanks into Ukraine.
Under the new rules, Russian firms will have five days to delist from foreign exchanges once the law becomes effective on Tuesday next week.