The Russian stock market began operation in 1994, and sufficient volume was observed on the market for a stock index to be created in June of that year. An examination of the value of that stock index indicates that from 1994 through early 1996 the Russian market was an unimpressive location for investment.
However in 1996 the value of the Russian stock market began to rise, and it rose beautifully through July 1997. Russia was one of the celebrated "emerging markets", and during this period was the best-performing of the lot.
July 1997 was not a significant month in Russia, but it was a catastrophic month in Thailand. The value of the currency collapsed, the stock market lost value, and foreign investors became wary of retaining investments in that country. As the concern deepened, it also spread: Indonesia suffered through a similar crisis in October 1997. While the Russian stock market recovered from the July shock, the October shock was the beginning of a long downward slide. The contagion from other countries led to a massive infection for Russia.
The long downward slide in the stock market represented a continuing outflow of investment funds from Russian stocks. These funds went overseas, with the central bank obligingly providing US dollars for Russian rubles at the nearly constant exchange rate. It's fascinating that the fall in the stock market index ended at the time that the ruble dropped in value -- but that is probably due to the controls placed by the government on conversion of rubles to US dollars.
The big losers -- outside Russia -- were the investors in "hedge funds". These investors had chosen to buy massive volumes of Russian bonds on the margin. When Russia placed its controls on conversion of rubles to US dollars, the hedge funds were unable to get out the value of their investments. This led to an unravelling of the entire investment position.
Inside Russia the losers were concentrated in Moscow and the upper class. Although ownership of corporations was originally distributed to citizens, by this time ownership has become concentrated in a small circle of hands. However, even small amounts invested in the stock market had large consequences for the small investor, as the value of that investment may have been largely wiped out.