The Russian Financial Market in 2021

The market for Russian stocks was characterized by growth nearly throughout the whole year 2021; however, starting from November, it began to display a trend towards its downward adjustment. As shown in Fig. 1, among the 43 national stock indexes denominated in different currencies around the world, a positive annual return in 2021 was demonstrated by the composite indexes of 33 countries. The highest growth was achieved by the Argentina index (33.5%), followed closely by the S&P 500 (26.9%). The growth of Russia’s indexes, the RTS and IMOEX, was almost the same: 15.0% and 15.1%, respectively. However, over the first two months of 2022, the situation changed significantly: in January-February, IMOEX fell by a record 38.4%, and the RTS Index, by 41.3%. Over the same period of 2022, a majority of the 43 national stock indexes moved downward, except only a few of them, which were mainly those of developing countries: Argentina, Brazil, Greece, Malaysia, Norway, Singapore, Turkey, the Philippines, and the RSA. The main reason behind this massive adjustment of national stock indexes was the announcement, in mid-December 2021, of the leaders of the US Federal Reserve System (FRS) that in March 2022 they planned to curtail the current quantitative easing program, and so there was a high probability that the interest rates set by the Central Bank would begin to climb.