"This is very bad news for the Russian market," says ING senior emerging market strategist Maarten-Jan Bakkum of word MSCI and S&P Dow Jones are considering stripping sanctioned Russian firms from their indexes. "There could be some big players that decide to no longer invest in Russia, so it's natural they now have benchmarks to reflect that. There will be outflows."
MSCI is considering the removal of VTB Bank should the lender issue new equity as the latest sanctions prohibit U.S. investors from aiding certain Russian firms with raising new equity or debt that matures in more than 90 days. It's seeking feedback from clients and will disclose its decision on Friday.
S&P is also seeking guidance from its clientele.