Russia seeks to end investor rush as sanctions hit economy

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  • Man and abrn cut russia positions
  • Liontrust suspends its operations on the Russian fund
  • Austrian RBI plans to leave Russia – sources
  • Visa and Mastercard block many in Russia
  • German watchdog closely monitors European branch of VTB

LONDON, March 1 (Reuters) – Russia said on Tuesday it was imposing temporary restrictions on foreigners seeking to exit Russian assets, as it tries to stem investor withdrawal prompted by crippling Western sanctions imposed during the the invasion of Ukraine.

Russian assets plummeted on Tuesday with London-listed MSCI Russia ETF (CSRU.L) shares plunging 33% to a new all-time high and Russia’s biggest lender Sberbank falling 21 cents on the dollar against just under $9 before the invasion.

Major fund managers, including hedge fund Man Group (EMG.L) and UK asset manager abrdn (ABDN.L), trimmed their positions in Russia even as the ruble slumped to a record high and that transactions on its bonds froze.

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Leading asset manager BlackRock Inc said on Tuesday it was consulting with regulators, index providers and other market participants “to help ensure our clients can exit positions in Russian titles” where permitted. Read more

“There is definitely a drive among asset managers and benchmark providers to shed exposure to Russia in their portfolios and indices,” said Kaspar Hense, senior portfolio manager at Bluebay Asset Management. in London.

“The big question is where are the buyers coming from? »

Austria’s Raiffeisen Bank International (RBI) (RBIV.VI) is also considering leaving Russia, two people with knowledge of the matter told Reuters, a move that would make it the first European bank to do so since the invasion of Russia. Ukraine – which Moscow calls a “special operation”. RBI said he had no intention of leaving Russia. Read more

Russian Prime Minister Mikhail Mishustin announced that the country would temporarily block foreign investors from selling Russian assets to ensure they make a considered decision, but did not give details. Read more

Moscow’s decision to impose capital controls means that billions of dollars in securities held by foreigners in Russia are at risk of being trapped. Read more

“It’s been quite a roller coaster,” said a London-based hedge fund manager invested in European financial companies who declined to be named, adding that the fund had reduced some of its indirect exposure to Russia.

British asset manager Liontrust suspended trading in its Russian fund, while prices of some of the most popular Russian-focused exchange-traded funds traded at a discount to their net asset value (CSRU.L) .

Ratings agency Fitch has identified 11 Russia-focused funds that have been suspended, with total assets under management of 4.4 billion euros ($4.9 billion) as of the end of January, said a spokesperson by e-mail. Read more

U.S.-listed exchange-traded funds that track Russian stocks have come under intense selling pressure in recent days, with ETF Vaneck Russia (RSX.Z) falling 24% on Tuesday.

One fund, Direxion’s Russia 2x ETF (RUSL.P), sparked a rush in options trading after its issuer announced it would cease trading on March 11 due to heightened volatility and trading restrictions. Russian titles. Read more

WILL NOT INVEST

Russian Prime Minister Mikhail Mishustin chairs a meeting on economic issues via video link in Moscow, Russia March 1, 2022. Sputnik/Alexander Astafyev/Pool via REUTERS

Within weeks, Russia went from a lucrative bet on soaring oil prices to an uninvestable market with a central bank crippled by sanctions, major banks locked out of the SWIFT global payments system, and capital controls stifling investors. money flow.

SWIFT said on Tuesday it was waiting to see which banking authorities wanted to be disconnected from its financial messaging system as the sanctions were applied. Read more

Visa Inc (VN) and Mastercard Inc have blocked several Russian financial institutions from their networks and German market regulator BaFin said it is closely monitoring the European branch of Russian bank VTB (VTBR.MM), which does not accept more new customers.

Shares of some European banks remained under pressure after sharp declines on Monday due to lender exposure to Russia and the European banking sector (.SX7P) was down 3% on Tuesday.

Asset manager abrdn has about two billion pounds of client money invested in Russia and Belarus and has trimmed positions, chief executive Stephen Bird said. Read more

“We won’t be investing in Russia and Belarus for the foreseeable future,” Bird said.

Man Group has reduced its investments in Russia in recent weeks and now has negligible exposure to Russia and Ukraine in its portfolio, its chief financial officer Antoine Forterre told Reuters on Tuesday. Read more

Shares of Raiffeisen (RBIV.VI) were down 11.3% early in the afternoon, after falling 14% on Monday. Shares of Italy’s UniCredit (CRDI.MI) fell 2.5%, after falling 9.5% on Monday.

The European Central Bank has placed banks with close ties to Russia, such as Raiffeisen and the European branch of VTB, under close scrutiny, two sources told Reuters. Read more

NO QUICK RESOLUTION

Tuesday’s stock price swings and investor comments came as Russia faced growing isolation over its actions in Ukraine, with resistance on the ground denying President Vladimir Putin decisive early gains. Read more

In recent days, the United States, Britain, Europe, Canada and other countries have announced a series of new sanctions. Read more

The London Stock Exchange announced on Tuesday that it would stop trading two global certificates of deposit (GDRs) for VTB Bank after Britain’s financial regulator suspended them in response to the sanctions. Read more

The German stock operator expanded the securities it would no longer trade to bonds issued by Russia. Read more

India’s major lender will not process any transactions involving Russian entities subject to international sanctions, according to a letter seen by Reuters and people familiar with the matter. Read more

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Additional reporting by Frank Siebelt, Huw Jones, Madeline Chambers and Iain Withers; Written by Tom Sims and Saikat Chatterjee; Editing by Mark Potter and Stephen Coates

Our standards: The Thomson Reuters Trust Principles.

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