S&P Dow Jones to remove all Russian stocks from indices and strip country of emerging market status

Further isolation from global economy effective from before market opens on Wednesday

S&P Dow Jones has announced it will remove all stocks listed or domiciled in Russia from its benchmark indices, the S&P 500 and the Dow Jones Industrial Average, because of the invasion of Ukraine.

In a statement released in New York on Friday, the company said the order would be effective before the market opens on Wednesday 9 March.

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Russia will be further isolated from the global economy by its declassification as an emerging market, also effective from Wednesday. After that it will be categorised as a standalone group.

The company said it conducted a consultation with market participants as a result of the recent sanctions and market access limitations.

“S&P DJI now announces that it will remove all stocks listed and/or domiciled in Russia (including ADRs/GDRs) from its standard equity indices at a price of zero, effective prior to the open on Wednesday, March 9, 2022,” the statement reads.

“Additionally, given the deterioration in the level of accessibility of the Russian market which may impact the ability of market participants to replicate S&P DJI Indices containing Russian securities, S&P DJI will reclassify Russia from an emerging market to ‘standalone’.”

Russia’s market status will not be reassessed until the 2023 S&P DJI Country Classification annual review.

To be reclassified as an emerging market would involve the standard review process, suggesting that there would be no chance of an immediate revocation of the decision.

The company will continue to calculate and publish Russia specific indices as part of the standalone status, keeping them separate from broader regional and global benchmarks.

They will also be assessed from the perspective of Russia-based investors given that investors in the US, UK, and EU are ineligible to participate in the market due to sanctions.

S&P Dow Jones’ move is just the latest measure put in place to punish Russia economically for its invasion of Ukraine.

Harsh sanctions have been imposed by the US, EU, and UK, and the Biden administration is now weighing a ban on US imports of Russian crude oil, under pressure as Congress races toward passing such a restriction.

Many western companies, both industrial and consumer-oriented, across a wide variety of sectors have ceased trading in Russia.

Wall Street fell at the end of a volatile week on Friday as the war in Ukraine overshadowed an acceleration in US jobs growth last month that pointed to a strengthened economy.