Post-Russian capital doesn’t flow to the WSE yet
22:13
As of Wednesday, March 9, 2022, Russian stocks are not included in the MSCI indices, the main family of equity indices unrelated to any particular stock exchange. As a result of MSCI's decision to exclude Russia from this agency's indices, Poland's weight increased. Globally, symbolically, from several percent to 46 percent in MSCI Emerging Markets Europe.
When the structure of indices changes, passive funds simply sell shares of companies that are removed from benchmarks and, in appropriate proportions, buy shares of those that replace them. Similar movements may or may not be made by actively managed funds.
Izabela Olszewska, a member of the WSE board, reminds us that removing Russia from MSCI indices as a result of the attack on Ukraine was not a typical rebalancing of indices. Above all, however, the Russian stock exchange has not been operating since the beginning of the war. So it is not known when and for how much funds from the United States or Western Europe will be able to sell Russian shares.
"For now, there is no way to release money from Russian companies, so there is no way to invest it elsewhere," Izabela Olszewska noted.
Therefore, the WSE is not reacting with optimism – it does not expect a sudden inflow of capital due to the MSCI decision.
