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The Russian Stock Market Reopened. Who’s Buying?

That said, the ranks of retail investors in Russia, though relatively small, have been growing. Jacob Grapengiesser, a partner at the Swedish investment firm East Capital, was based in Russia until recently. Before the war, he said, his wife’s younger co-workers asked her for stock picks after they found out what he did for a living. “That’s not something that would have happened even a few years ago,” Mr. Grapengiesser said.

But investing in Russian stocks is a much different proposition now. Sanctions are hitting the Russian economy hard, and the measures that Moscow is taking in response, including restricting access to foreign currency and raising interest rates, further limit what companies can do. Investors who screen their investments according to environmental, social and governance, or E.S.G., principles are also reconsidering their exposure to all things Russian.

Analysts at IHS Markit expect the Russian economy to shrink 11 percent this year and inflation to more than triple, to over 20 percent. The country won’t fully return to its prewar size until the 2030s, according to their forecast.

Russia’s public companies, which tend to be the biggest and most international in scope, are increasingly cut off from foreign markets, especially if their owners are under Western sanctions. S&P Global Market Intelligence recently estimated that the average public company in Russia has a 1-in-5 chance of defaulting on its debt.

Russian companies with listings on foreign markets, which continued to trade after the Moscow market was closed, have seen their values plunge to nearly zero. The fact that companies are worth something at home but considered worthless abroad neatly captures how comprehensively the Russian market has been severed from the rest of the world.

For some, that’s an opportunity. Mr. Grapengiesser of East Capital said he had been getting “three calls a day” from foreign hedge funds looking to buy his Russian shares at steep discounts. (The firm holds hundreds of millions of dollars in Russian stocks across its funds.) He isn’t interested in selling, and he doesn’t know how he would complete the transactions anyway, since as a foreign-owned fund his holdings are frozen.

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