“The stock exchange is an important capital market for companies and a well-functioning stock exchange is good for the business climate. That is in the interest of investors and investors,” says Ralph Wessels, head of investment strategy at ABN Amro. “The Russian economy is going to take a huge hit, with all these sanctions and companies leaving. It will all stick to Russia for a long time to come and keep companies and investors away, and hinder Russian companies from financing and growth.”
The market value of the Moscow stock exchange, the market value of all listed stock funds, was $650 billion at the beginning of this year and only a fraction of that is left. One sixth of the stock market value, about $85 billion, is held by foreign institutional investors, including pension funds. So there will have to be a lot of depreciation on the Russian investments.
ABP was on time
The ABP pension fund narrowly escaped major losses on the Russia portfolio. At the end of September 2021, it had invested 2.2 billion euros in Russian equities and bonds, but the fund decided to reduce significantly at the end of the year. For example, a large part of the investments in Russian oil and gas companies was sold, along with many other investments in Russian companies and banks.
At the end of February, ABP still had 520 million euros in investments in Russia. ABP has announced that it now wants to get rid of everything, but realizes that selling is currently complicated and actually impossible, because Russia prohibits the sale of Russian interests by foreign investors.
Oil giants Shell and BP are hitting the same wall. They want to withdraw from Russia by selling the activities, but the Russians do not want to take it over and so Shell and BP leave empty-handed. BP says it expects a $22 billion write-off, while Shell expects a $3 billion loss.
Russia at war costs investors, investors and companies a lot of money left or right, so the financial pain is not only on the Russian side.
–
