Sanctions Against Russia

 

Monday was a difficult day for the Russian stock market. The day began with a decline in the Russian ruble (RUR) and Russian indices after new US sanctions were introduced starting April 6. A number of Russian companies and individuals were added to the SDN list (Specially Designated Nationals List - a list of specially designated categories of prohibited citizens and legal entities). Inclusion on this list means freezing the assets of companies in the US and also prohibits US individuals and legal entities from carrying out any operations/transactions with these Russian companies/persons. Individuals and legal entities from other countries are also exposed to the risk of US sanctions if cooperation with companies from the SDN list is detected.

As a result, the MICEX(Moscow50) index recorded an 8% drop on Monday in just a few hours, the largest decline in the last four years.

 

The Russian ruble also recorded a 12% decline over 3 days, depreciating against the dollar from 57 RUR to 64 RUR.

 

Shares of RusAl (РусАл), one of Russia's largest aluminum export companies, fell by 46.9% on Monday to 15 RUR per share, while En+ shares fell by 22% to 45 RUR per share after the companies and their major shareholders were added to the SDN list. In total, this list includes 7 Russian businesspeople, 12 companies and 17 Russian officials.

How much Russian billionaires lost because of these sanctions:

Vladimir Potanin - the main owner of “Norilsk Nickel”, 2.25 billion dollars;

Vagit Alekperov - president of “Lukoil”, 1.37 billion dollars;

Viktor Vekselberg - owner of the "Renova" group, 1.28 billion dollars.

Nevertheless, the businesspeople did not panic, and some were even pleased. Oleg Tinkov, founder of “Tinkoff Bank”, said the following: “We, those in Russian business, have nerves of steel, we feel comfortable. Yesterday I lost 250 mln dollars in one day, there have been even worse days, I remember losing a billion in one day, so I consider Monday a positive day, noting that it would be a shame not to buy SBERBANK shares at -20%.”

SBERBANK shares depreciated on Monday by 21%, falling from 248$ to 194$, and are currently holding at 212$, which represents an opportune moment to enter "long".

 

SBERBANK shares have been in continuous growth over the last 3 years.

2015: +66%

2016: +80%

2017: +33%

 

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