Wednesday, September 17, 2008 0 comments ++[ CLICK TO COMMENT ]++

Russian Stock Market Halted Again

MarketWatch reports that trading was halted in the Russian market again:

Russian financial turmoil accelerated Wednesday as trading on the country's major exchanges was halted for a second day and the finance ministry announced plans to loan the country's three largest banks up to $44 billion.

Trading on Russia's RTS exchange, where listings are denominated in dollars, was halted after a morning plunge of more than 6%. Trading on the ruble-denominated MICEX exchange was also halted. The MICEX index was last down 3.1%.

Trading on both exchanges was halted at 12:10 p.m. Moscow time due to an order from the Federal Financial Markets Service, the Russian markets regulatory body.
On Tuesday, trading was halted after the RTS fell 11.5% and the Micex fell 17.5%.

Also on Wednesday, the Russian finance ministry said it will loan the country's three largest banks up to 1.3 trillion rubles, or $44 billion.
The finance ministry said it would make 754.3 billion rubles available to state-run OAO Sberbank, 268.5 billion rubles to VTB Group and 103.9 billion rubles to OAO Gazprombank.

I don't follow Russia closely but it's weird that they are injecting liquidity into the banks. I have not heard of any solvency or liquidity issues from Russia. In America, liquidity and solvency problems are arising from massive losses on real estate. In contrast, there doesn't seem to be anything happening in Russia.

The move by the Russian government seems quite dumb to me. If the stock market is selling off for 'valid' reasons, throwing money onto it won't help in the long run.


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