Finance Update

Moscow Exchange signs deals with Indian bourses to attract investors

MOSCOW: The

Moscow Exchange

and two leading Indian bourses signed agreements on Wednesday designed to ease access to the Russian market for Indian capital, amid moves by

Russia

to attract a wider investor pool.

The Moscow Exchange, Russia’s leading bourse, signed a memorandum of understanding with BSE, India’s No.1 exchange, and The India International Exchange to connect investors and companies in both countries.

Alexander Afanasyev, the head of Moscow Exchange, said Indian investors were looking at the Russian market with interest.

Russia is seeking to foster new ties with investors in the East amid Moscow’s soured relations with the West. The United States and European Union have been imposing financial and economic sanctions on Russia since 2014.

When asked if Indian investors could, in theory, replace Western investors on the Moscow Exchange, Afanasyev said the plan was to have them join Western peers, not substitute them.

Foreign investors’ share of the Russian stock market has been steady at 70-75 percent in the past few years, while the proportion of non-residents among holders of Russian state debt dropped sharply in 2018 before recovering in the past few months.

Investors were seen selling Russian OFZ treasury bonds last year amid threats that the United States could slap sanctions on holdings of Russian debt to punish Moscow for what it described as “malign activities.” Moscow has denied any wrongdoing.

Speaking at the same forum organised by the Moscow Exchange, Central Bank First Deputy Chairman Sergei Shvetsov said that U.S. investors were buying into rouble-denominated OFZ bonds despite talks of more sanctions.

This year Russia recorded strong demand for its government bonds from abroad, and the country is preparing to increase its borrowing plan in the second quarter and implement a new bond-offering mechanism.

Source

Prakash Poojary
Business Analyst

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