Moscow exchange suspended trading in shares of eight FinEx funds

Мосбиржа приостановила торги акциями восьми фондов FinEx

Moscow Exchange suspended trading in shares of several FinEx exchange-traded funds with 3 Martha. There are no trades on the stock market yet., but a separate suspension on funds means, that they may not bargain, even when the exchange starts working again.

The Board of Directors has suspended the determination of the value of the net assets of funds. Also suspended production, ransom, share exchange and payment of buyback cash proceeds from 1 March 2022.

Talking about the following ETF:

  1. FXTP - U.S. Inflation Protected Treasuries.
  2. FXIP - U.S. Inflation Protected Treasury Bonds, hedging fund in rubles.
  3. FXTB - US Treasury bills.
  4. FXMM - US Treasury bills, hedging fund in rubles.

On the website of the Moscow Exchange, this has not yet been said., but, as FinEx writes in an explanation on its website, same with 2 March concerns four more funds:

  1. FXRU - Eurobonds of Russian companies.
  2. FXRB - Eurobonds of Russian companies, hedging fund in rubles.
  3. FXFA - high-yield bonds of American companies - "fallen angels".
  4. FXRD - high-yield bonds of American companies - "fallen angels", hedging fund in rubles and paying dividends.

According to Finex, it is a technical measure. She was accepted, since it is currently impossible to correctly calculate the value of the assets of the funds, having a ruble class of shares. The foreign exchange market is now fragmented, and in ruble swaps - derivatives, used by funds for hedging in rubles, - no liquidity.

How long will it last, FinEx doesn't know yet. At the same time, the value of assets in FXUS funds continues to be calculated, FXCN, FXEM, FXRE, FXRL, FXES, FXIT, FXIM, FXBC, FXDE, FXDM, FXKZ, FXGD, FXWO, FXRW.

In our opinion, this should not lead to loss of money, invested in funds, where the calculation of the value of assets is suspended. Even if the funds eventually decide to liquidate, their assets will be sold, and the money will be transferred to investors. How it works, we analyzed on the example of the closure of three FinEx funds in the winter of 2020.

Recall, what 24 And 25 February, the price of units and shares of many exchange-traded funds, traded on the Moscow Exchange, far away from the calculated - "fair" - price. The exchange price of securities of funds did not reflect the real change in the value of assets in them, and discounts and premiums to the estimated price reached tens of percent.

  Shenzhen stock exchange (Shenzhen Stock Exchange — SZSE)

This was due to, that market makers of funds did not participate in the auction, which provide liquidity at a price, close to fair. Without them, the price depended on supply and demand from ordinary bidders.

There is currently no trading on the stock market of the Moscow Exchange, what, together with sanctions against Russian companies and restrictions for non-residents, hinders the management of funds. According to RBC, Management Company "VTB Capital Asset Management" as of 2 March suspended operations with shares 25 its open mutual funds and 10 exchange mutual funds. Similar measures were taken by the Criminal Code of Sberbank and Otkritie.

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