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. Last Updated: 07/27/2016

RTS Suspends Trade of 101 Stocks




The Russian Trading System on Wednesday suspended trade in 101 stocks, many of them big-name companies, after they failed to provide first quarter reports to the market watchdog, the Federal Securities Commission.


The move, which affected shares in companies including GAZ, Krasny Oktyabr and Yukos, was aimed to prevent a deterioration in relations between the FSC and the investment companies that trade on RTS, Russia's main share market organizer, officials said.


"RTS decided to remove the most liquid out of 290 stocks identified by the FSC to safeguard brokers," RTS spokeswoman Olga Belobrovtseva said.


Banned stocks will be allowed to trade again when the FSC gives the go-ahead, RTS officials said.


None of the companies listed were among the handful of liquid shares that make up about 90 percent of the trading volume on the RTS. The full list of shares was published on the RTS web site, www.rtsnet.ru.


The move followed threats from the FSC to punish brokers who trade shares of companies that fail to provide quarterly reports on time.


It came on a day when the stock market was pausing for a breather while awaiting news on whether the U.S. Federal Open Market Committee would decide to hike interest rates.


A rate increase exceeding 25 basis points could trigger a sell-off in the emerging markets, traders said.


The Russian Trading System index closed up 1.41 percent at 125.65 on turnover of $10.4 million. The dollar-denominated Moscow Times Index of 50 leading shares rose 1.20 percent to 96.46 on turnover of $11.63 million.


Unified Energy Systems gained 1.16 percent and climbed to $0.088 while oil major Surgutneftegaz edged up 3 percent to $0.159.


Fifteen out of the 50 stocks included in the MT index were affected by the decision of the RTS.


In addition to GAZ, Krasny Oktyabr and Yukos, the list includes Lenenergo, Moscow Telephone System, Nizhegorodsvyazinform, NIzhny Tagil Ferrous Metals, Orenburgneft, Permenergo, Purneftegaz, Sakhalinmorneftegaz, Severstal, St.Pt.Telephone and trade houses GUM and TsUM.


"The [MT Index] advisory board will meet in the coming weeks to decide on the measures which need to be taken," said Anton Lobanov, director of the data department with Skate, a subsidiary of The Moscow Times parent company Independent Media, which compiles data on the MT index. In the meantime, the index will be calculated on the basis of the price of the last registered transaction or most recent available quote for illiquid stocks, Lobanov said.


The FSC based its decision to cancel trade on the law on protection of investors' rights, passed in March.


At the end of last year, only 5 percent of all companies filed their reports with FSC, but the figure was up to 50 percent, FSC head Dmitry Vasilyev said Tuesday.