The Moscow Stock Exchange in the Face of Sanctions and Internal Tensions

For over two years, the Moscow Exchange (MOEX) has been operating in extreme conditions defined by geopolitical pressure, unprecedented sanctions and growing isolation from global financial markets. The main index, MOEX, has become a barometer of an economy on a war footing, with its quotations reflecting not only fluctuations in commodity prices, but above all the growing political risk and erosion of fundamental market principles.

MOEX index under siege

The rouble-denominated index, which includes such giants as Sberbank, Gazprom and Lukoil, illustrates the scale of the challenges. Since the beginning of 2025, MOEX has lost about 22% of its value, with the last month bringing a decline of more than 12%. Analysts speak of a permanent ‘Russian discount’, i.e. a systemic undervaluation of assets due to a lack of legal predictability and arbitrary decisions by the authorities. This uncertainty, combined with high interest rates, is effectively stifling the capital market.

Capital Market within the War Economy

The conflict in Ukraine and the sanctions imposed have pushed the Russian economy towards centralised control. Since the beginning of the invasion, the state has seized assets worth around $50 billion, belonging to both foreign companies (Danone, Carlsberg) and Russian oligarchs. This wave of nationalisation, the largest since the 1990s, stands in stark contrast to President Vladimir Putin's official calls to increase the number of companies on the stock exchange in order to raise capital for investment. The government's actions undermine the trust necessary for the market to function, creating a climate in which private property is becoming increasingly illusory.

These tensions recently reached a critical point when an unprecedented dispute within the Russian elite came to light. The Moscow Stock Exchange filed an official complaint with the Central Bank, accusing the state of violating the rights of minority shareholders after the takeover of the gold mining company UGC. The government ignored its legal obligation to announce a share buyback offer, which was met with a surprising response from the regulator – the Central Bank ruled in favour of the exchange, stating that the state had broken its own rules. Public criticism from MOEX supervisory board chairman Sergei Shvetsov, who stated that ‘the state does not follow the rules it sets itself,’ is the first clear sign of a rift between technocrats and political forces seeking to fully mobilise the economy.

Technological Song of the Future

In an attempt of modernisation and innovation, the Moscow Exchange announced the MOEX AI Invest Challenge initiative. This competition, aimed at developers and analysts, aims to stimulate the creation of algorithms and investment strategies based on artificial intelligence. Although this initiative is a step towards adapting to global technological trends, its real impact on the market is severely limited by a fundamental crisis of confidence. It is difficult to expect advanced algorithmic strategies to flourish in an environment where basic property rights are challenged by the actions of the state itself, as demonstrated by the dispute over UGC.