The Russian stock exchanges, RTS and Micex, have repeatedly been closed over the last two months as the value of equities has fallen sharply.  Wednesday's suspension of trading was the tenth such closure since early September. Trading was originally scheduled to resume on Friday 10 October, but in fact reopened today, 9 October. 

Since September 30 2008 the Russian regulator, the Federal Service for Financial Markets (FSFM), has enforced a policy under which trading will be suspended on the Russian exchanges for no less than one hour if an index indicator deviates during the day by more than 5% in comparison to its opening value, or by more than 10% in comparison to its closing value of the previous trading day.

At its closing level of 761.63 on 8 October, the RTS dollar index had declined by almost 70% from its all-time high of 2487.92, reached in May.  So far in today's trading, the index has rebounded by around 10%.

While trading in European Russia-focused ETFs has been affected by these repeated market closures, the suspensions of activity on the Russian exchanges have not automatically led to trading halts in the ETFs.  However both Claus Hein of Lyxor and Manooj Mistry of db x-trackers, the leading European managers of Russian equity ETFs, confirmed to IndexUniverse.com that some widening of bid-offer spreads would be inevitable during such periods of closure.

In the U.S., the Market Vectors - Russia ETF (AMEX: RSX) has continued to trade as well without stoppage, as have the various BRIC (Brazil, Russia, India and China) ETFs. Of course, the Russia market is typically closed during U.S. trading hours, anyway; U.S. ETF shareholders trade based on estimates of where the markets are going, acting as an overnight price discovery mechanism for Russian shares.

Emerging market investors had been heavily overweight in Russia early in the year, with the February Merrill Lynch investor survey showing a net 73% of investors overweight in the country, and Russia topping the list of preferred emerging markets.