The Moscow Exchange index fell below 1,900 points during trading on July 20 for the first time since October 2022, according to reports by Meduza, The Insider, and The Bell. By 9:38 a.m. Moscow time, the IMOEX2 index was down 2.86%, trading below 1,900 points. The Insider noted that by 12:00 p.m. Moscow time, the index remained below the previous close.
The Russian stock market has been declining for five consecutive months. Since the start of the year, the Moscow Exchange index has lost about 30%, The Insider calculated. From its March peak, the index has lost nearly a third, The Bell added.
Analysts interviewed by RBC and cited by The Insider said the main pressure on the market comes from dividend cut-offs by several large issuers. Without this technical factor, the scale of the sell-off would be significantly smaller, experts believe.
Rising oil prices have not supported the broader market, though they have helped individual exporter stocks, The Insider noted. One investment bank said the capitalization of many Russian companies “defies rational explanation,” and the ratio of this indicator to GDP has fallen to levels seen in 2000.
On July 21, attacks on Wildberries warehouses added to the factors behind the decline, affecting its main competitor Ozon, whose shares fell 12%, The Bell reported. Other causes of the crash cited by The Bell include ruble weakening, rising inflation, expectations of a Central Bank resignation, dividend gaps, and a collapse in shares of individual companies, including VK, VTB, and Gazprom.
Analysts suggest the market may attempt a rebound this week, including ahead of the Bank of Russia’s key rate meeting on July 24, The Insider reported. If the regulator keeps the rate unchanged and tightens its rhetoric, the market could fall further, they warned.