Investment Value and Risk Assessment Report on the Russian MOEX Stock Market

I now have sufficient data to conduct a comprehensive analysis. Let me generate a comprehensive analysis report on the Russian stock market.

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Based on the latest market data, the Russian MOEX Index is currently trading in the range of 2,722-2,725 points [0][1], recording a gain of approximately 1.81% during the trading period from December 2025 to January 2026 [0]. However, when viewed on an annual basis, the Russian stock market ranked bottom among major global markets with a 0% annual return in 2025, in stark contrast to the 72% gain of the South Korean stock market and the 48% gain of the Spanish stock market [1].

The total market capitalization of the Russian stock market has shrunk sharply from its historical peak of approximately $2.94 trillion in October 2021 to approximately $925.9 billion in December 2025 [2], a decline of over 68%. This drastic shrinkage reflects the combined impact of multiple factors: capital outflows caused by geopolitical conflicts, the impact of international sanctions on the energy sector, and liquidity depletion triggered by the forced withdrawal of foreign investors from the market.

It is particularly worth noting that in the current sanction environment, the reference value of traditional valuation indicators (such as P/E ratio and P/B ratio) has been greatly reduced. The valuation system of the Russian stock market has decoupled from the international capital market, its price discovery function has been severely impaired, and the valuation level reflects more the restricted supply and demand relationship of the domestic market rather than the fair intrinsic value [3].

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It is highly noteworthy that the trading data of the Russian stock market obtained from mainstream financial data terminals shows an abnormal state of “zero trading volume” [0][1]. This phenomenon is not a technical failure in data acquisition, but a true reflection of the market reality of the sharp deterioration of liquidity in the Russian stock market. In June 2024, the Moscow Exchange announced the suspension of the use of US dollars and euros for foreign exchange and precious metals transactions, marking a major structural transformation of the Russian financial market [4].

The Russian government has implemented strict capital control measures on non-resident investors, including restrictions on securities selling and the freezing of some overseas assets [3]. Morgan Stanley clearly warned in its client documents: current or future sanctions may lead Russia to take retaliatory actions, including the immediate freezing of Russian assets, which may further weaken the liquidity and value of Russian securities [3]. Risks faced by international investors include inability to execute securities transactions, asset freezes, and restrictions on fund remittances, among others.

Under the pressure of sanctions, Russia is accelerating the construction of an alternative international settlement mechanism. In trade with India, the share of ruble settlement exceeds 50%; in trade with China, the share of ruble settlement accounts for about 40% [4]. Although this “de-dollarization” process has alleviated the pressure of foreign exchange demand to a certain extent, it has further isolated the Russian financial market from the global mainstream system, leading to a sharp narrowing of participation channels for international investors.

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There are no signs of a settlement to the Ukraine conflict, and Russian President Putin continues to send signals of firmly advancing strategic demands [5]. JPMorgan Chase’s analysis points out that geopolitical risks have broken through the scope of Europe, and factors such as the escalation of tensions between the United States and Venezuela and the turmoil in the Middle East have further increased market uncertainty [5].

The introduction of the U.S. Sanctioning Russia Act of 2025 marks a new stage of economic pressure on Russia. The bill proposes to impose secondary sanctions on third countries (such as India and China) that have significant business dealings with Russia, which may lead to broader financial decoupling [6]. In addition, the EU is reportedly planning to implement an LNG import ban in 2027 [1], which will pose long-term pressure on Russia’s energy export revenues.

Western sanctions have had a substantive impact on Russian energy enterprises. Once pillar enterprises of the index such as Gazprom, Rosneft, and Lukoil have now become factors dragging down the index’s performance [1]. Energy stocks have transformed from “leading growth engines” to “valuation burdens”, and this structural change has profoundly reshaped the investment logic of the Russian stock market.

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Russia’s GDP growth rate slowed significantly to approximately 1% in 2025, a sharp decline compared to previous years [4]. Russian President Putin confirmed this slowdown trend in his annual review. Igor Nikolaev, an expert from the Institute of Economics of the Russian Academy of Sciences, pointed out that the weakening of fiscal stimulus momentum is an important reason for the economic slowdown, but it is not the only factor—the central bank’s tight monetary policy has had a significant inhibitory effect on both enterprises and consumers [4].

The Central Bank of Russia sharply cut its benchmark interest rate from 21% to 16% in 2025, but the interest rate level still ranks among the highest in the world [4]. Although the high interest rate policy has helped curb inflation (the annual inflation rate has dropped to below 6%), it has also suppressed corporate investment activities and consumer demand. The ruble appreciated by 45% against the trend in 2025, the largest increase since 1994 [4]. This abnormal phenomenon is partly due to the sharp drop in import demand caused by sanctions and the central bank’s tight policy, but the strong ruble has also had a negative impact on export competitiveness and energy revenues.

The Russian economy faces multiple structural constraints: heavy debt burden, high borrowing costs, demographic structural pressure, and continuous obstacles to capital and technology flows [4]. Russia is undergoing a transition from a wartime economic model to a more stable financial system, a process that may be accompanied by a further decline in economic growth. Experts from the Faculty of Economics of Lomonosov Moscow State University pointed out that the key variables in 2026 will be interest rate trends and foreign trade dynamics [4].

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Assessment Dimension	Specific Situation
Valuation Level	Stock prices are at relatively low levels, but reference value is limited
Resource Endowment	Energy and raw material export capabilities remain competitive
Policy Support	Government financial capabilities support some large state-owned enterprises
Currency Performance	The ruble exchange rate is relatively strong

Risk Type	Risk Description	Severity Level
Sanctions Risk	Asset freezes, trading bans, capital controls	Extremely High
Liquidity Risk	Insufficient market depth, huge bid-ask spreads	Extremely High
Geopolitical Risk	Conflict escalation, deterioration of relations	High
Economic Risk	Risk of stagflation, growth stagnation	Medium-High
Exit Risk	Restricted investment exit channels	Extremely High
Compliance Risk	Secondary sanctions affecting third-party partners	High

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Based on the following core considerations, we adopt a

investment stance towards the Russian stock market:

1. Market Access and Exit Barriers
   : Amid the sanction environment, foreign investors face practical difficulties in buying and selling securities and remitting funds, severely impairing the reversibility of investments.

2. Distorted Valuation System
   : Traditional valuation methods have failed, the price discovery mechanism is distorted, and market prices cannot reflect fair intrinsic value.

3. Accumulated Systemic Risks
   : The probability of occurrence and potential impact of risk events such as sanctions escalation, asset freezes, and capital controls are at historically high levels.

4. Liquidity Depletion
   : Abnormal daily trading volume data reflects that market depth has become severely insufficient, and large-scale position building and liquidation operations may cause extreme price fluctuations.

5. Decoupling from Global Capital Markets
   : The Russian stock market can hardly be integrated into the normal international asset allocation framework, and the goals of risk hedging and diversified investment cannot be achieved.

For any investor considering the Russian market, it is essential to fully recognize that: under the current geopolitical environment, investing in Russian securities may face the risk of total loss of principal, and such losses may be sudden and irreversible. International financial institutions such as Morgan Stanley have listed Russia as a “prohibited investment” or “restricted investment” category in their compliance documents [3]. For investors who already hold Russian assets, it is recommended to closely monitor sanctions developments and policy changes, and prudently assess the risks of their holdings.

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[0] Yahoo Finance - MOEX Russia Index (IMOEX.ME) Charts, Data & News (https://finance.yahoo.com/quote/IMOEX.ME/)

[1] LinkedIn - “The Last Hurrah That Wasn’t: A Week in Global Markets” (https://www.linkedin.com/pulse/last-hurrah-wasnt-week-global-markets-december-22-26-2025-kumar-jha-ipsqc)

[2] CEIC Data - Russia Market Capitalization (https://www.ceicdata.com/en/indicator/russia/market-capitalization)

[3] Morgan Stanley Aperio Group - Firm Brochure (https://www.morganstanley.com/content/dam/msdotcom/en/wealth/investmentsolutions/pdfs/adv/aperio.pdf)

[4] Xinhua Finance - [2026 Foreign Exchange Market Outlook] The Ruble Led Global Gains in 2025: Can Russia Navigate the “Strong Currency Trap” in 2026? (https://finance.sina.com.cn/money/bond/2026-01-08/doc-inhfqtyr6675181.shtml)

[5] JPMorgan Private Bank - Year-End Review: Five Forces Beyond AI That Moved the Markets (https://privatebank.jpmorgan.com/apac/cn/insights/markets-and-investing/tmt/year-end-recap-5-forces-beyond-ai-that-moved-markets)

[6] MEXC - What Is the Sanctioning Russia Act of 2025 and How Will It Affect Crypto? (https://www.mexc.co/en-NG/news/440193)