Russian Stock Market Lost A Third Of Its Capitalization
- 18.02.2026, 16:31
This happened after Putin's instruction to double the indicator.
Vladimir Putin in May 2024, after another "re-election" demanded that the capitalization of the Russian stock market be doubled from 33% to 66% of GDP by 2030. Since then, it has fallen by about a third, and has already halved since the war began.
By the end of last year, capitalization stood at about 50 trillion rubles, or 23% of GDP, the Expert RA agency calculated. Before the war began, in 2021, Russian companies traded on stock exchanges were worth 62.8 trillion rubles, according to its estimates, and their ratio to GDP was twice as high as it is now - 47%.
Now, to meet Putin's "national goal," capitalization must be tripled, not doubled. It could be increased through the growth of stock prices or placement of new securities (IPO), market expansion through the emergence of new companies. None of these methods works in the current conditions.
After the war and mutual sanctions (Russia blocked the assets of non-residents from "unfriendly" countries on "C" accounts), the Russian market was left without foreign investors. The market was deprived of external financing and began to rely on internal resources, which are insufficient, says Expert RA. Until 2022, about 60% of trading turnover was provided by institutional investors, mostly foreign, and the departure of foreign players created a "liquidity vacuum".
It was filled by Russian retail investors, but this did not solve the problem, the agency writes: "The dominance of retail has revealed a critical problem of market capacity: the change in the investor base has made the market massive in terms of the number of participants, but limited in terms of capital. The fragmented demand of individuals is not able to take on large placements, the agency notes: "A retail investor can ensure the success of a deal worth 3-5 billion rubles, but is not able to replace the departed foreign funds in deals worth more than 50 billion rubles". Therefore, the IPO boom of 2023-2024, when there were 8 and 14 placements "Expert RA" calls "a parade of small and medium capitalization companies".
Quotes are also not growing: the MosBirch index has fallen by 12% since the beginning of 2024, and since the signing of Putin's decree - by 20%. High interest rates discourage investors from investing in shares: government-insured deposits at 14-15% (and last year at rates above 20%) make shares unattractive. According to the Central Bank, last year Russians reduced investments in shares by 26 billion rubles.
Many analysts compare the Russian market with a compressed spring, but the war does not let it unravel. High interest rates, stalled economic growth, falling corporate profits, and a strong ruble (most of Russia's blue chips are exporters) are preventing the growth of the MosBirch index. Underestimation of the Russian stock market is one of the main factors preventing the achievement of the goal of doubling capitalization, analysts of T-Investments noted. They also do not count on IPO. Prospective companies are mostly small, even if there are many of them, their total contribution to capitalization will not be significant, they wrote. In their opinion, a few heavyweights can really help the growth of capitalization, but even from them it is difficult to expect a total contribution of more than 5-10% to the overall growth of capitalization.
The question of how capitalization can reach 2/3 of GDP by 2030 in the conditions of a high key rate and limited demand for shares from domestic investors, remains open, experts of the Gaidar Institute stated.
Organically, the task is impossible, admitted the first deputy chairman of the Central Bank Vladimir Chistyukhin. It is necessary to place several years in a row at least a trillion rubles a year "in an extremely unfavorable external environment," he explained. That's how much the IPO volume amounted to in the ten years from 2014 to 2024. - Chistyukhin said, "and this is in conditions when there were still foreign investors in our market who made large deals.