Russia seeks to halt investor rush as sanctions hit economy

File photo of the skyline of the banking district in Frankfurt, September 18, 2014. REUTERS/Kai Pfaffenbach

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  • Man and abrn cut russia positions
  • Liontrust suspends its operations on the Russian fund
  • Austrian RBI plans to leave Russia
  • 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, curbing an accelerating investor exodus due to crippling Western sanctions imposed during the invasion of Ukraine.

Russian assets plummeted on Tuesday, with London-listed isshares MSCI Russia ETF (CSRU.L) shares plunging 50% to a new all-time high and Russia’s biggest lender Sberbank falling 21% as investors were rushing out.

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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“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 (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 Ukraine. by the country. 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.

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) .

Rating agency Fitch has identified 11 Russia-focused funds that have been suspended, with total assets under management of 4.4 billion euros ($4.92 billion) as of the end of January, said a spokesperson by e-mail. Read more


In a matter of weeks, Russia has gone from a lucrative bet on soaring oil prices to an uninvestable market with a central bank crippled by sanctions, major banks excluded from the international payments system and capital controls stifling flows. monetary.

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%, following Monday’s 9.5% plunge.

The European Central Bank has placed banks with close ties to Russia, such as Raiffeisen and the European branch of VTB, under close scrutiny following sweeping financial sanctions imposed by the West that have already pushed a Russian lender over the edge. two sources told Reuters. Read more


Tuesday’s stock price swings and investor comments came as Russia faced growing isolation over its invasion of Ukraine, with resistance on the ground denying President Vladimir Putin decisive early gains despite heavy shelling and a huge military convoy outside Kiev. Read more

In recent days, the United States, Britain, Europe and Canada have announced a series of new sanctions, including blocking the access of certain Russian lenders to the international payment system SWIFT. Read more

In response, the London Stock Exchange announced on Tuesday that it would stop trading two global certificates of deposit (GDRs) for VTB Bank after the UK 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 imposed on Russia after its invasion of Ukraine, according to a letter seen by Reuters and people familiar with the matter. Read more

Amid the wild swings in bank stocks, bankers have sought to reassure investors and the public, saying they are well capitalized and their footprint in Russia is relatively small.

Deutsche Bank (DBKGn.DE) chief executive Christian Sewing told the Bild newspaper that it would be wrong to assume a quick resolution to the crisis in Ukraine following the exclusion of Russian banks from the SWIFT payment system.

“That would be a bad expectation,” Sewing said.

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Additional reporting by Frank Siebelt, Huw Jones and Madeline Chambers; Written by Tom Sims and Saikat Chatterjee; Editing by Edmund Blair, Carmel Crimmins and Susan Fenton

Our standards: The Thomson Reuters Trust Principles.

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