Trading on the Moscow stock exchange has been going on for a good month, but there is still no sign of normality.

On February 24, the beginning of the Russian attack on Ukraine, the leading ruble-denominated index Moex had lost around a third of its value.

Shortly thereafter, the central bank decided to suspend trading completely.

At the end of March, first some and then all shares were traded again.

Things seemed to be going well. Investors, optimistic about the fall in the ruble, bought exporters' paper in particular, and the Moex index rose for two weeks.

At the beginning of April, however, the mood changed and prices fell again.

Now the Moex index is bobbing around at a good 2200 points and is therefore only a shadow of the highs in autumn 2021, when it was over 4100 points.

Compared to the days just before the outbreak of war, the index is still down almost 30 percent.

It could be even worse, however, as foreigners remain banned from selling their shares on the Moscow Stock Exchange until further notice.

Catherine Wagner

Business correspondent for Russia and the CIS based in Moscow.

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Investors are deterred not only by the uncertainty about further sanctions and the progress of the war, but also by the lack of information about the companies.

For example, banks no longer have to publish financial reports because of Western sanctions, and companies traded on the stock exchange can decide for themselves which data they disclose.

Large companies such as the fertilizer manufacturer Fosagro and the steel producers MMK, Sewerstal and NLMK no longer published company figures in the first quarter.

The Russian investment company Aton recently wrote that the forecasts for net profit and other figures for Russian companies for this year are not binding;

there are still no recommendations for certain stocks.

There is also great uncertainty about further action towards foreign investors.

Alexandr Kudrin, an analyst at Aton, told the business portal The Bell that about 50 percent of Russia's freely traded shares are held by foreigners.

If the sales ban against them is lifted, the market is likely to collapse again significantly.

Unlike in the past, Aton did not want to comment on the situation on the Russian stock market to the FAZ - two banks operating in Russia, whose analysts used to make regular comments, now also left inquiries unanswered.

Investors are also deterred by the decision of a number of companies not to pay dividends.

"Many investors have gotten used to buying shares in Russian companies because of dividends," Oleg Syrovatkin, analyst at Otkritie Bank, told Kommersant;

this investment idea is now obsolete.

Inflation in Russia will pick up again

The Russian currency appeared to be recovering faster than the stock market.

Shortly after Russia's attack on the neighboring country, at the beginning of March, around 120 rubles had to be paid for one dollar;

now it's back to around 74 rubles per dollar, which is only as much as it was at the beginning of the year, when hardly anyone was expecting a war.

But this development was artificially brought about: At the end of February, the central bank not only raised the key interest rate from 9.5 to 20 percent, but also introduced a series of capital controls.

Exporters were required to convert 80 percent of their foreign currency sales into rubles.

In addition, the Federal Reserve banned sending more than $10,000 abroad and the sale of foreign currency to private customers by banks.

Savers were allowed to withdraw a maximum of $10,000 from their currency accounts,

everything else was paid in rubles.

High fees had to be paid to buy dollars on the stock exchange.

The ruble lost its status as a freely convertible currency with the start of the "special military operation", said the head of the Audit Office, Alexei Kudrin, in mid-April.

The fact that Russian exports remained strong while imports fell sharply also strengthened the ruble – since imports are usually paid for in foreign currency, demand for dollars fell.

In the meantime, the central bank has withdrawn or relaxed some measures – banks are again allowed to sell dollars to Russian citizens, but only those that they have received since April 9th ​​– and there are no longer any commissions to be paid on currency purchases on the stock exchange either.

The key interest rate is now back to 17 instead of 20 percent.

The easing is expected to weaken the ruble again in the near future.

Analysts at Sberbank are expecting an average rate of around 100 rubles per dollar for the year as a whole, as it can be assumed that imports will increase again and that demand for foreign exchange will rise as well.

They also point out that the high inflation, which is currently at a good 17.4 percent, is likely to put the ruble under pressure.

Inflation had recently slowed down significantly, which analysts at Raiffeisenbank explained as a decline in consumer activity after a "shock wave" in mid-February.

At that time, many Russians bought medicines and food in large quantities for fear of price increases and product shortages.

In the meantime, medicines and even sugar, which has since been sold out, are becoming cheaper again.

However, experts assume that inflation will pick up again in the next few months – when the stocks that are still being sold run out and there are no more supplies due to a lack of foreign components.