Investment bankers and brokers in Moscow are accessing Bloomberg terminals remotely via subscriptions in Armenia a year after the US media giant cut access for all its Russian clients, bne IntelliNews can reveal.
Moscow traders say they are still using the vast array of Bloomberg’s data and analytical functionality despite access to their terminals being disabled after President Vladimir Putin invaded Ukraine.
A Russian entrepreneur, who relocated to Armenia after the invasion, is understood to have paid for a bank of terminals to be installed in an office in the capital Yerevan. That service, which can be accessed remotely via Virtual Private Networks (VPNs), has been sold on to bankers in Moscow at a significant premium to the $2,500 a month charged by Bloomberg.
“About a dozen guys in our department take turns to use a laptop which accesses the Armenia subscription via a VPN and Bloomberg Anywhere,” a trader at a top Russian private lender told bne IntelliNews. “It’s not ideal but it’s better than being cut off completely, as we were.”
The disabling of Moscow’s Bloomberg terminals, which provide investors access to real-time market data, investing analytics and proprietary trading platforms, was illustrative of the severing or Russia’s capital markets from the global financial system.
A tsunami of sanctions decimated any deal-making in Moscow and triggered an exodus of international investment banks. The e-scooter firm Whoosh raised RUB2.1bn in December in the sole stock market float last year, while the only M&A activity has been nationalisations and fire sales by foreign companies.
A senior research analyst at a state-controlled bank said the group’s chief executive had personally authorised the decision to pay for the back channel for several Bloomberg subscriptions.
“This is someone who used to have a terminal in his corporate office with his own personalised setup,” said the analyst, who declined to be named for security reasons. “He was clearly suffering withdrawal symptoms and I think he is getting a kick out of circumventing the sanctions.”
Oisin O’Malley, a spokesman for Bloomberg in London, did not respond to a request for comment at the time of going to press.
Bloomberg also suspended the work of its journalists in Russia after President Putin signed legislation criminalising independent reporting in the country. The company, which is still run by the former New York Mayor Michael Bloomberg, evacuated its entire 35-strong Moscow bureau, their families and pets to Dubai after the change in the criminal code.
Even though Bloomberg’s Russia staff are now based all overseas, correspondents sign their copy anonymously with “Bloomberg News” bylines for security reasons.
Meanwhile, most traders are learning to cope without Bloomberg’s all-powerful data and analytics portal and Refinitiv, its LSE-owned closest rival, which also suspended work with Russian investors in March 2022.
Some are using investing.com, an Asian-owned financial market platform, for macro data, while Telegram, the encrypted messaging service, has largely replaced Bloomberg chat, the instant messaging service that had popular among traders who used it to post quotes, updates on trades and news about market activity.
bne IntelliNews reported in March this year that the Moscow Exchange (MOEX) plans to set up an analogue of the Bloomberg terminals already dubbed “Bloombergski.”
Moex terminals are supposed to launch in Russia by September and will cost RUB500mn ($6.6mn) to establish, according to reports on Telegram.
The new service is intended to replicate the Bloomberg terminal and provide the same array of services and data as the American original for professional investors and funds. Moex is promising that the Russian version will offer traders everything that the American original had.
“We are carefully studying how we can replace financial information providers who have left the Russian market, because the exchange has rich experience in this,” Andrey Burilov, a Moex managing director for IT, told the new agency Tass.
Burilov said he wasn’t “upset” by the departure of financial data providers Bloomberg because it provided Moex with “an opening niche as a provider of such information and we have almost all the necessary ingredients: quotes for a wide range of instruments, reference information on traded instruments, the MOEX Dealing terminal and a lot of other things.”
Moex has indicated that the Bloombergski system will work in Russia, throughout the former Soviet region and China.
Russia had already set up its own version of the credit card payment system called MIR eight years ago. When VISA pulled out of Russia, banks moved smoothly to the Russian credit card payments system without interruption.
The Central Bank of Russia (CBR) had also set up Financial Communications System (SPFS), a Russian analogue of the SWIFT system, several years before the war started after fears of being cut off from the global financial system surfaced after the annexation of Crimea in 2014.
In the first days following the war SWIFT sanctions were imposed, effectively making it impossible for Russia to easily make international transfers. The transition to using SPFS was more difficult because the volume of messages it could send, that allow bank transfers, was limited and it was not working 24/7. However, after a year of work the system is reportedly working well now.
Russia has been trying to get other countries to adopt its payment system, but there has been some reluctance after the US threatened to apply secondary sanctions to countries that adopt them. Many banks in Turkey and Central Asia that adopted the MIR car payment system later reversed their decisions after coming under pressure from the US.