Investment in foreign shares in Russia

2023

The United States imposed sanctions on the SPB exchange. Blocked assets of Russians in foreign securities reached 2.3 trillion rubles or $23.6 billion

Over 1.5 trillion rubles of foreign securities and mutual funds a_133183 were in the accounts of Russians before the second wave of sanctions (blocking assets St. Petersburg Stock Exchange"" after being included in the SDN list from the outside, USA according to the Central Bank.

We are talking exclusively about shares - 1.25 trillion rubles in shares, bypassing intermediaries, and 291 billion rubles through mutual funds of investment funds focused on investments in non-residents' shares (Tinkoff Bank had the largest). Another 730 billion in debt securities of non-residents. Total in foreign securities about 2.3 trillion rubles or 23.6 billion dollars at the exchange rate as of October 1 (the latest reporting data).

There is no information on which part was blocked in the first wave of sanctions (February-March 2022), and which part after November 2, 2023.

Earlier, in January 2021, Russians held 1.2 trillion rubles in shares of foreign issuers, 355 billion in mutual funds and 1 trillion rubles in bonds, i.e. almost 2.6 trillion rubles or 33 billion dollars - 30% was sold directly through market sales or indirectly through the OTC market.

Foreign securities worth 5.7 trillion rubles are blocked from Russian residents abroad, of which 20% are from individuals

The volume of foreign securities blocked abroad belonging to residents of the Russian Federation is 5.7 trillion rubles, of which over 20% belongs to Russian retail investors, the Central Bank said in January 2023.

2022: Central Bank: 5 million Russians blocked foreign shares for 320 billion rubles

More than 5 million Russians have blocked foreign shares worth over 320 billion rubles. Such data on July 20, 2022 was cited by a member of the Board of Directors of the Bank of Russia Philip Gabunia at the presentation of the concept of improving the protection of retail investors.

According to him, by July 2022, 24.7 million people in the Russian Federation have brokerage accounts. Over the past two years, the growth in the number of qualified investors has accelerated significantly. The criteria for obtaining the status of a qualified investor have not changed for more than five years.

5 million Russian citizens blocked foreign shares for 320 billion rubles

On July 5, 2022, the Moscow Exchange reported that the number of individuals with brokerage accounts on the exchange exceeded 20.4 million people. The share of private investors in the volume of trading in securities in June amounted to 74%.

According to RBC, in early March 2022, Russians faced restrictions on foreign counterparties, due to which their clients lost the opportunity to sell foreign securities through foreign exchanges. As a representative of Aton told the publication, the company was forced to suspend trade in foreign securities. He explained that the clearing organization Euroclear, which also provides settlements with securities, stopped the automatic processing of all transactions with Russian counterparties.

In mid-June, the head of CBE Nabiullina said that Russian investors should take into account risks when buying foreign securities.

The risks we talked about that these securities are regulated in foreign jurisdictions have been partially realized, "she said.

In mid-June 2022, the Central Bank of the Russian Federation estimated the volume of foreign securities of Russians, which were blocked in the National Settlement Depository (NSD) due to anti-Russian sanctions of 6 trillion rubles.^[1]

2020: Russians invested about 638 billion rubles in foreign shares and bonds

At the end of 2020, Russians invested about 415 and 223 billion rubles in foreign shares and bonds (in the amount of 638 billion rubles), which more than doubles the size of the decrease in funds in accounts and deposits of individuals in foreign currency in Russian banks for the same period. This is stated in a study by the Central Bank of the Russian Federation.

According to the regulator, the inflow of funds from individuals into the shares of companies registered in foreign jurisdiction in 2020 reached 415 billion rubles. Of these, 70 billion rubles fell on investments in shares of issuers affiliated with Russian companies.

Most often, Russians invested in the largest American companies that are included in the main stock indices (S&P 500, Nasdaq and Dow Jones).

The Central Bank notes that, despite the growth of investments in foreign securities, most investments still fall on the share of Russian companies. As of January 1, this share was 85%.

Russians in 2020 invested 638 billion rubles in foreign shares and bonds

The largest increase in household investments in 2020 was recorded on the St. Petersburg Stock Exchange: the volume of net purchases of non-resident shares over the year increased more than 30 times, from eight to 242 billion rubles. At the same time, the total investment of individuals in shares of non-residents (including taking into account the Moscow Exchange) as of January 1 amounted to 570 billion rubles, in shares of non-residents affiliated with Russian companies - 142 billion rubles.

From the point of view of the development of the financial system, the assessment of the effects of the growth of the population's investment in foreign shares is ambiguous, the Central Bank notes. Of the negative effects, the regulator calls the outflow of client currency funds from the banking system, additional demand for foreign currency, increased potential network effects with foreign stock markets, an increase in the impact of world indices on the well-being of individuals.^[2]

Notes