Russian Stocks Abroad Plunge With Moscow Bourse Still Shut

(Bloomberg) --

With Russia keeping its local stock exchange closed for a second day, foreign-listed shares in Russian companies tumbled again on Tuesday in an indication of how they may react to sanctions when local trading reopens.

Depositary receipts for state-run gas giant Gazprom PJSC fell 71% by the close in London, while the nation's biggest lender, Sberbank of Russia PJSC, lost 80%. The stocks plummeted 53% and 74%, respectively, on Monday.

The European Union is discussing the exclusion of seven Russian banks from the SWIFT messaging system, Bloomberg reported. However, Sberbank is not on the list, the report said, and the firm's depositary receipts briefly trimmed declines following the news. Meanwhile, Shell Plc said Monday it intends to exit its joint ventures with Gazprom.

Exchange-traded funds also dropped on Tuesday, with the Paris-listed Lyxor MSCI Russia UCITS -- which tracks the MSCI Russia Index -- falling 49% after losing half its value in the prior session. The largest U.S.-listed ETF tracking Russian equities, VanEck Russia ETF, fell 14% after sinking 30% on Monday.

The two-day shuttering of stock trading on the Moscow bourse is its longest closure for extraordinary circumstances since October 1998, according to the exchange. A decision on whether to open on Wednesday will be announced at 9 a.m. local time tomorrow, the Bank of Russia said on its website.

With the central bank taking the unusual step of closing the bourse, trading in shares of Russian firms listed elsewhere is an indication of how local equities may react to sanctions on the country and its companies when trading eventually resumes.

Index provider MSCI Inc. is closely monitoring just how accessible and investable the market is for foreigners and plans to say more by the end of the week, it said Monday. A possible decision to reclassify its Russia Indexes could result in billions of dollars flowing out of the nation's stock market.

READ: Russian Markets Start to Look Uninvestable as Sanctions Bite

BlackRock Inc. is suspending the creation of new shares in the $105 million iShares MSCI Russia ETF (ticker ERUS) until further notice, BlackRock said in a press statement on Tuesday. Buying and selling of shares will still be available on the secondary market, it said.

Russia said it would press forward with its invasion of Ukraine until its goals are met, as troops were seen moving in a large convoy toward the capital, Kyiv.