(BFM Bourse) – The Moscow Exchange is currently unable to reflect investors’ concerns about Russian shares, as the authorities decided to close it until at least March 5. But the vast majority of the country’s energy flagships are also listed in London, where they are literally falling apart. Faced with tougher sanctions, investors are liquidating their positions. Banking giant Sberbank and the oil and gas groups Lukoil and Rosneft appear to have lost a hundredfold in value at the start of the year.
London-based Russian giants, which were trading in the tens of dollars a few weeks ago, are now worth just a few cents. As Russia’s central bank suspended share trading in Moscow on Monday until at least Friday, shares of Russian companies listed in London are falling in response to sanctions imposed on Russia (and its companies) following its invasion of Ukraine.
For example, a certificate of deposit – a negotiable financial instrument issued to represent the securities of a company listed on another stock exchange – Sberbank collapsed 82% to … 4 cents when it traded above $15 on December 31. Thus, since January 1, the decline has reached 99.83%.
Worried about the sanctions despite not being (yet) excluded from the famed Swift network, the first Russian bank announced on Wednesday that it was pulling out of the European market. “The group’s subsidiary banks are facing anomalous outflows of funds and threats to the safety of their employees and offices,” the group said in a statement quoted by Russian news agencies. According to him, Sberbank cannot provide liquidity to its European subsidiaries due to the order of the Russian Central Bank. The EU banking regulator (Single Dispute Resolution Board) also announced on Tuesday that bankruptcy proceedings would be opened against Sberbank’s main subsidiary in Europe, Sberbank Europe AG, based in Austria.
If the energy sector is still relatively spared from Western sanctions due to the dependence of a number of European countries on Russian gas, then manufacturers in London are also massacring. The two gas giants Rosneft and Gazprom have lost 88.2% and 98.8% respectively since January 1, their certificates of deposit were reduced this Wednesday to penny shares – 0.99 cents each for Rosneft and 0 .34 cents for Gazprom around 3:40. pm The third heavyweight of the industry, Novatek, whose shareholder is TotalEnergies (-99.7% since January 1), did not escape the purge.
European countries can theoretically still buy Russian oil, but market operators have taken matters into their own hands and are trying by all means to get supplies in other ways. Thus, according to Standard & Poor’s, the discount for Russian Urals oil compared to Brent and WTI reached almost $20 on Tuesday amid very weak demand.
Several funds, starting with the Norwegian sovereign wealth fund (the world’s largest), have also announced that they will sell all their Russian assets. Lukoil has thus also collapsed more than 99% in London, even if its name is the only thing that doesn’t fall into the unenviable “penny stock” category, as it is still trading around $2.7 vs. $8 on Wednesday. the day before. and almost 90 at the end of last year.
Quentin Subrann – © 2022 BFM Bourse