S&P Dow Jones Indices, one of the largest providers of indices for use by exchange traded funds, said today it will not remove Russian stocks from the firm’s various benchmarks following a consultation with clients regarding the inclusion of Russian securities in S&P indices in the wake of broadening economic sanctions against Russia.
“Based on comments received from stakeholders as well as our own research, it is S&P DJI’s understanding that Russian laws and regulations provide for sufficient advanced public notice of new equity issuances to allow index adjustments to be made with normal announcement periods if any such adjustment is deemed appropriate,” says David Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “S&P DJI would like to thank those clients and investors who responded to the consultation. We will continue to monitor developments going forward.”
When the consultation commenced on July 31, S&P said the objective of its client consultation is to gather information to make potential index adjustments in timely fashion and to “ensure that our indices continue to take into account changing market conditions, including in this specific circumstance, the recently announced sanctions and any impact they might have on our licensees and other market participants.” [S&P Consults Clients on Russia Indices]
The index provider sponsors 11 indices that hold only Russian securities, including the S&P Russia Capped BMI Index. That index serves as the benchmark for the SPDR S&P Russia ETF (RBL).
S&P also issuers nearly 80 indices that include a mix of Russian and non-Russian equities. That group includes indices used by the SPDR S&P BRIC 40 ETF (BIK) and the SPDR S&P Emerging Markets Dividend ETF (EDIV) .
RBL is up 1.1% today on volume that has already eclipsed the daily average. While RBL and rival Russia ETFs are rallying Monday, there are mounting signs that Western sanctions are having an impact on the Russian economy.
The International Monetary Fund, which believes Russia is already in a recession, is forecasting economic growth there of a scant 0.2% this year, reports The Guardian. The paper also noted no U.S. dollars, euros or Swiss francs were loaned to Russian firms last month as a result of the sanctions.
SPDR S&P Russia ETF
ETF Trends editorial team contributed to this post.
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