MSCI and JP Morgan are under pressure to remove Russian stocks and bonds from emerging markets indices following Russia’s invasion of Ukraine last week.
Moscow’s stock market was forced to close on Monday, as the impact of Western sanctions on Russia began to be felt, and will remain shut again today.
Trading restrictions on Russian equities and bonds in international markets mean these securities will no longer meet the minimum liquidity requirements needed for their inclusion in benchmarks such as the MSCI Emerging Markets index and JPMorgan Emerging Markets Bond (EMBI) indices, the Financial Times reported.
A top executive at MSCI told Reuters that the Russia's stock market is "uninvestable", making a removal of Russian listings from indexes a "natural next step".
"It would not make a lot of sense for us to continue to include Russian securities if our clients and investors cannot transact in the market," Dimitris Melas, MSCI's head of index research and chair of the Index Policy Committee, told Reuters.
Yesterday, JPMorgan Chase announced an initial $1mln donation to support humanitarian relief efforts in Ukraine.