{"id":453811,"date":"2022-05-27T21:23:00","date_gmt":"2022-05-27T18:23:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/the-tell-are-russian-stocks-worthless-heres-one-key-indicator-that-shouldnt-be-ignored\/"},"modified":"2022-05-27T21:23:00","modified_gmt":"2022-05-27T18:23:00","slug":"the-tell-are-russian-stocks-worthless-heres-one-key-indicator-that-shouldnt-be-ignored","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/the-tell-are-russian-stocks-worthless-heres-one-key-indicator-that-shouldnt-be-ignored\/","title":{"rendered":"#The Tell: Are Russian stocks worthless? Here\u2019s one key indicator that shouldn\u2019t be ignored"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a40761255b56\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a40761255b56\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/the-tell-are-russian-stocks-worthless-heres-one-key-indicator-that-shouldnt-be-ignored\/#%E2%80%9CThe_Tell_Are_Russian_stocks_worthless_Heres_one_key_indicator_that_shouldnt_be_ignored%E2%80%9D\" >&#8220;The Tell: Are Russian stocks worthless? Here\u2019s one key indicator that shouldn\u2019t be ignored&#8221;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/the-tell-are-russian-stocks-worthless-heres-one-key-indicator-that-shouldnt-be-ignored\/#Joseph_Adinolfi\" >Joseph Adinolfi<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CThe_Tell_Are_Russian_stocks_worthless_Heres_one_key_indicator_that_shouldnt_be_ignored%E2%80%9D\"><\/span>&#8220;The Tell: Are Russian stocks worthless? Here\u2019s one key indicator that shouldn\u2019t be ignored&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\">\n<\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000909124\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000909124\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       Russian stocks may have recovered some of their post-invasion losses, but the MOEX Russia, one of the most closely watched benchmarks of stocks trading in Moscow, is still down 40% since the start of the year in dollar terms, even though the Russian ruble has marched relentlessly higher as of late. <\/p>\n<p> These losses haven\u2019t deterred distressed investors in the U.S. and Europe, many of whom have been gobbling up Russian stocks and Russian ADRs. Yet, by at least one important measure of credit risk, an argument could be made that Russian stocks are essentially worthless \u2014 at least, according to a group of analysts from MSCI. <\/p>\n<div class=\"paywall\">\n       In a recent research note entitled <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.msci.com\/www\/blog-posts\/are-russian-stocks-worthless-\/03202146429\" class=\"icon none\">\u201cAre Russian Stocks Worthless?\u201d<\/a>, a handful of researchers from the global index manager looked at the spread between Russian corporate credit-default swaps and Russian equities. <\/p>\n<p>\u201cWe find that trading in Russian corporate CDS has surged since the Russia-Ukraine war began. Increased trading activity may indicate that the CDS market contains information not present in the equity market. Thus, our research incorporates the CDS market\u2019s implied default probabilities to model Russian equity prices,\u201d the MSCI team wrote in their note. <\/p>\n<p>The odds of default for Russia\u2019s largest corporations over the coming five years has surged to more than 80%, from a prewar level of just 20%, according to the implied odds of default priced into the CDS. <\/p>\n<p>They illustrated the divergence between the default risk implied by CDS trading levels in the chart below:<\/p>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-inline\n        article__inset__image\n      \" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:60.57142857142858%;\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\">\n        <img decoding=\"async\" srcset=\"https:\/\/images.mktw.net\/im-553411?width=540&amp;size=1.6494845360824741 540w, https:\/\/images.mktw.net\/im-553411?width=620&amp;size=1.6494845360824741 620w, https:\/\/images.mktw.net\/im-553411?width=639&amp;size=1.6494845360824741 639w, https:\/\/images.mktw.net\/im-553411?width=700&amp;size=1.6494845360824741 700w, https:\/\/images.mktw.net\/im-553411?width=700&amp;size=1.6494845360824741&amp;pixel_ratio=1.5 1050w, https:\/\/images.mktw.net\/im-553411?width=700&amp;size=1.6494845360824741&amp;pixel_ratio=2 1400w, https:\/\/images.mktw.net\/im-553411?width=700&amp;size=1.6494845360824741&amp;pixel_ratio=3 2100w\" sizes=\"(max-width: 639px) 100vw, (max-width: 979px) 620px, (max-width: 1299px) 540px, 700px\" src=\"https:\/\/images.mktw.net\/im-553411?width=700&amp;height=424\" alt=\"\" title=\"\">\n      <\/div><figcaption class=\"wsj-article-caption article__inset__image__caption\" itemprop=\"caption\">\n          <span class=\"wsj-article-credit article__inset__image__caption__credit\" itemprop=\"creator\"><br \/>\n            Source: MSCI<br \/>\n          <\/span><br \/>\n  <\/figcaption><\/figure>\n<\/p><\/div>\n<p>       This would suggest that equity investors \u2014 a group that is presently being restricted by the Russian government to exclude most foreign investors \u2014 are pricing in much lower odds of default than those assigned by global credit markets. This dichotomy between who is allowed to own CDS vs. equities could be one factor driving the disconnect, MSCI said. <\/p>\n<p>\u201cA basic explanation for the disconnect is that investors trading on one market are not trading on the other. Most foreigners are unable to trade Russian stocks, and CDS are only accessible to institutional investors,\u201d MSCI said.<\/p>\n<p>Another is the heightened odds of a \u2018technical\u2019 default, which have risen ever since the U.S. Treasury earlier this week barred the Russian government from making bond payments to foreign bondholders, a move that\u2019s <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>arently intended to force Russia into an embarrassing (and potentially economically destabilizing) technical default. <\/p>\n<p>While the Biden administration imposed sanctions on Russia\u2019s central bank shortly after the invasion of Ukraine, it allowed an exemption enabling Russia to pay its foreign bondholders. However, when that exemption expired this week, the Biden administration confirmed that it wouldn\u2019t be renewed. <\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>Although the MSCI analysts acknowledged that this artificial default pressure could be causing distortions in the market for Russian CDS, the present state of the Russian economy means \u201cevery part of the market has experienced some degree of distortion.\u201d<\/p>\n<p>What might fix this? Well, the MSCI team wrote that \u201cgreater price consistency is possible if Russian markets and the economy reopen and reintegrate, and the extensive international sanctions are lifted.\u201d<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Joseph Adinolfi\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/topics\/journalists\/joseph-adinolfi\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/jsadinolfi\",\"text\":\"@jsadinolfi\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:joseph.adinolfi@dowjones.com\",\"text\":\"joseph.adinolfi@dowjones.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Joseph_Adinolfi\"><\/span>Joseph Adinolfi<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><ufc-follow-author-widget product=\"marketwatch\" author-id=\"100_MW\" author-name=\"Joseph Adinolfi\" signin-url=\"https:\/\/accounts.marketwatch.com\/login?target=https%3A%2F%2Fwww.marketwatch.com%2Fstory%2Fare-russian-stocks-worthless-heres-one-key-indicator-that-shouldnt-be-ignored-11653675820%3Frss%3D1%26siteid%3Drss\" panda-api=\"https:\/\/follow-api.marketwatch.com\"><\/ufc-follow-author-widget><\/p><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-7DDF-4403D9DD32B7%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;The Tell: Are Russian stocks worthless? Here\u2019s one key indicator that shouldn\u2019t be ignored&#8221; Russian stocks may have recovered some of their post-invasion losses, but the MOEX Russia, one of the most closely watched benchmarks of stocks trading in Moscow, is still down 40% since the start of the year in dollar terms, even though&#8230;<\/p>\n","protected":false},"author":1,"featured_media":453812,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-553462\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-453811","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/453811","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=453811"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/453811\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/453812"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=453811"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=453811"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=453811"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}