5 May 2023 15:31

SPBE exchange to restrict purchases of stocks of 11 U.S. military suppliers

MOSCOW. May 5 (Interfax) - The Saint Petersburg Exchange is introducing restrictions for investors on purchasing the securities of 11 U.S. companies which are part of the American military-industrial complex on the Central Bank's recommendation.

Brokers are advised to limit the ability to purchase the securities of Aerojet Rocketdyne Holdings Inc., AeroVironment Inc., General Dynamics Corporation, L3Harris Technologies Inc., Lockheed Martin Corporation, Northrop Grumman Corporation, Olin Corporation, Palantir Technologies Inc., Raytheon Technologies Corporation, Smith & Wesson Brands (SPB: SWBI ) Inc., and TransDigm Group Incorporated, the exchange said. At the same time, these securities may continue to be sold.

Information on the timing of the introduction of the planned restrictions is not available; investors need to check with their brokers.

This measure will preventively reduce risks for investors in the event of the adoption of "a regulation prohibiting the purchase and sale of securities of a number of foreign companies," the release says.

In accordance with the Central Bank's recommendations, brokers will inform clients about the possible risks of a new ban on transactions with these securities. If a legal act leading to a ban is adopted, the list of securities may be specified, the release said.

State Duma deputy Konstantin Bakharev suggested introducing restrictions on trading in the shares of American companies of the military-industrial complex that supply weapons to Ukraine. Among them, he named Lockheed Martin, producer of HIMARS missile systems, and Raytheon Technologies, maker of Javelin anti-tank weapons, as well as Stinger missiles.

Russian Central Bank Governor, Elvira Nabiullina, speaking in the State Duma in April, said she supported the introduction of these restrictions. The Bank of Russia has forwarded its proposals to the relevant government agencies, she said.

Earlier, the press service of the Russian Ministry of Finance had reported on the development of a legal mechanism to impose a ban on trading in shares of defense industry companies from unfriendly countries on the domestic stock market.

A ban on trading in the securities of these companies would involve delisting them. In this regard, the issues involved with investors leaving them need to be resolved, Nabiullina said at a press conference on April 28.