MOSCOW Aug 16 Stock index compiler FTSE has
decided to keep Russia's banks Sberbank and VTB
in its indexes for now but would exclude them if they
issued new shares, it said late on Friday.
The decision is likely to reassure investors in Russia's two
largest banks, as neither is expected to issue new equity in the
Concerns that major index compilers may exclude Russian
companies that are subject to Western sanctions from key
benchmarks have been a factor weighing on Russia's stock market,
as these benchmarks are used by investors to determine their
The FTSE statement came a week after another major index
compiler MSCI announced that it was keeping Sberbank and VTB in
its MSCI Russia index, leading to a strong rally in Russian
shares at the beginning of last week.
FTSE said it had been consulting investors over how to treat
the two banks in the event that they issued new equity. It
warned that it was unclear whether secondary trading of newly
issued shares would contravene Western sanctions.
"In the light of these circumstances, the consensus amongst
index users is that they would not wish to see sanctioned
companies deleted prematurely from FTSE indices but would want
the sanctioned stock to be deleted in advance of the new shares
becoming available for trading," FTSE said.
However, FTSE said that new share issues by the banks were
"presumed unlikely" as both have publicly stated they have no
plans to issue new equity while sanctions persist.
If either bank did announce a new share issue, FTSE said it
would not immediately delete the companies from its indexes but
would do so within 40 Russian trading days, unless assured by
U.S. and EU authorities that sanctions would be lifted
imminently or that secondary market trading following a new
share issue would not contravene sanctions.
Separately, FTSE announced on Thursday that it was launching
four new indexes that exclude Russia.
(Reporting By Jason Bush; Editing by Erica Billingham)