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One Billion Russian Shares Traded Feb 28 Four Days After Russia Began War: What is it good for?

March 2, 2022

  • EU, UK, and US regulators have not closed depository receipt trade as investors traded 1.1 billion receipts Monday.

  • Tens of billions of dollars traded for 39 Russian companies traded in 20 liquid markets.

  • Nine out of ten traded ADRs focused on banking, mining, and energy - Sberbank, Gazprom, Rosneft, Lukoil, Norilsk Nickel, and Magnit.

  • Four out of five ADRs traded globally were Sberbank and Gazprom.

  • Among others, J.P. Morgan and Bank of New York Mellon’s platforms used for 54% and 35% of published transactions.

Research performed by Responsible Alpha based on Bloomberg data showed that billions of dollars are still flowing to banned companies associated with the Russian government’s invasion of Ukraine.

While regulators and some exchanges have stopped trading in Russian equities, markets have not stopped trading in the lucrative multi-billion depository receipt market.

In the global depository receipt market, banks issue certificates representing shares of foreign company allowing for exchange of these shares on a local exchange.

The depository receipt market for Russian equities is diverse and broad with transactions across 20 markets for 39 companies alone, Monday, February 28, four days after the Russian government’s war of choice began.

In the U.S., regulators have not yet acted to address capital raising by investors using American Depository Receipts (ADR) for Russian companies whose materiel and taxes are fueling Russia’s war machine.

The New York Times is now reporting that 500,000 people have fled their homes in Ukraine.

Europe now has an immediate humanitarian crisis with hundreds of thousands of families without food or shelter facing winter cold.

Regulators must move today as winter chills refugees fleeing the Russian government’s war of choice.

Without regulatory action, as reported by Reuters, when will investors’ capital in Russian markets stop fueling this escalating humanitarian crisis?


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