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Traders expect that if foreign investors return some will
immediately sell shares given the uncharted waters of an equity
market now offering huge risks and insufficient transparency.
Russia's stock market fell 3% on Friday after the exchange said
it would let clients from "friendly" jurisdictions, those which
have not deployed sanctions against Russia, start trading after
an almost six-month hiatus.
However, in a statement after Friday's market close, the Moscow
Exchange said the ruling on the return of foreign investors
would only apply to the derivatives market, not the main stock
market.
The dollar-denominated RTS index was up 2.5% to 1,099 points at
0940 GMT, while the rouble-based MOEX Russian index was 2.2%
higher at 2,098 points.
Analysts said the clarification on the return of foreign
investors could catch out short sellers that had bet on the
market sliding once some foreigners were able to offload their
holdings.
"Those who were waiting for excess supply of shares and opened
shorts will close their positions today, which may result in a
short-term rebound," the Moscow-based BCS Global Markets
brokerage said in a note.
No date has been set for when foreigners from "friendly"
countries - which account for 1% of Russian holdings - will be
permitted to trade Russian shares. There is little prospect of
non-residents from "unfriendly" countries, which include
European Union members, United States and Britain, being able to
trade on the Russian markets any time soon.
Foreigners have been locked out of the market since Feb. 25, the
day after President Vladimir Putin ordered tens of thousands of
troops into Ukraine.
At 0940 GMT, the Russian rouble was 0.9% stronger against the
dollar at 60.04, having briefly dipped below the 60-mark. It
gained 1.1% to trade at 60.83 against the euro.
Since the start of August the currency has fallen back from
multi-year highs reached earlier this year under strict capital
controls.
Maxim Biryukov, senior analyst at Alfa Capital, said the rouble
was likely to continue weakening from this point.
"The main factor in the weakening of the rouble is the fall in
exports to 'unfriendly' countries - through the initiative of
both importers and Russian exporters," he said.
"Although this effect is partially offset by export prices, in
the event of a slowdown in the global economy, a decline in
volumes and prices may have a strong weakening impact on the
trade balance and the rouble."
For Russian equities guide see
For Russian treasury bonds see
(Reporting by Reuters; Editing by Susan Fenton)
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