White House: Russia stock market reopening is a “charade”

White House: Russia stock market reopening is a “charade”

The White House said Russia’s planned partial reopening of its stock exchange amounts to a “Potemkin market opening” that will obscure the dire effects of Western economic sanctions, according to Azerbaijan in Focus, reporting CNN World.

(The original term “Potemkin Village” derives from a story dating back to 18th-century Russia, suggesting that an artificial place can be built to disguise or conceal the true – and often less desirable – identity of the original.)

“What we’re seeing is a charade,” deputy national security adviser Daleep Singh wrote in a statement.
“After keeping its markets closed for nearly a month, Russia announced it will only allow 15% of listed shares to trade, foreigners are prohibited from selling their shares, and short selling in general has been banned. Meanwhile, Russia has made clear they are going to pour government resources into artificially propping up the shares of companies that are trading.”

Singh said it was “not a real market and not a sustainable model — which only underscores Russia’s isolation from the global financial system.”

What is reopening:

  • The Moscow Stock Exchange will partially re-open for trading in Russian stocks on Thursday, Russia’s Central Bank announced.
  • The Bank of Russia said trading in 33 stocks will resume between 9.50 a.m. and 2 p.m. local time.
  • The Russian equities allowed to resume trading include big companies such as Gazprom, Lukoil, VTB Bank, Sberbank, Rusal and Rosneft.
  • The central bank said there will be a ban applied on short shelling for these shares.