Investment analysts reported that the MOEX index has recorded a 14-week decline exceeding its losses during the 2008 global financial crisis, according to a review of market data and recent analyses. The Moscow Exchange’s benchmark fell 28.4% from its peak in early March 2023 through mid-July 2023, surpassing the 27.6% drop seen during the 2008 turmoil, according to calculations by VTB Capital. This marks the longest sustained decline since the exchange’s 2004 inception, according to the Moscow Exchange’s historical records.
Analysts attributed the slide to a combination of geopolitical tensions, reduced foreign investment, and domestic economic pressures. “The current decline reflects a perfect storm of external sanctions, energy sector volatility, and a weakening ruble,” said Alexander Nesterov, an economist at Alfa Bank. “The index is now trading at levels not seen since 2008, but the structural differences in the economy make direct comparisons challenging.”
The 2008 crisis saw the MOEX lose 27.6% over 13 weeks amid the collapse of global credit markets and a sharp drop in commodity prices. In contrast, the current decline has been driven by sustained capital outflows, with foreign investors selling $12.3 billion in Russian assets between January and June 2023, according to data from the Central Bank of Russia. The ruble has depreciated 14% against the dollar this year, exacerbating inflationary pressures and reducing consumer spending power.
Market participants are closely monitoring the government’s response. Deputy Prime Minister Alexei Overchuk stated in a July 12 press conference that “the economy remains resilient, and targeted measures are being implemented to stabilize financial markets.” However, no specific policies have been announced to address the MOEX’s decline, according to a statement from the Ministry of Finance.
Comparisons to the 2008 crisis highlight key differences. The 2008 downturn occurred during a global credit collapse, while the current slump is concentrated in emerging markets. Additionally, Russia’s current account surplus of $12.7 billion in 2022 provides a buffer absent in 2008, according to the International Monetary Fund. Yet, the absence of foreign direct investment inflows has created new vulnerabilities, with the Moscow Exchange’s trading volume down 19% year-to-date, per data from the exchange.
Investors remain divided on the outlook. While some analysts predict a gradual recovery, others warn of prolonged volatility. “The index is oversold, but without a clear policy framework, it’s hard to see a sustained rebound,” said Maria Volkova, a portfolio manager at Sberbank Asset Management. The exchange is scheduled to release quarterly performance metrics on July 28, which could provide further insight into market dynamics.
