July 25, 2024


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Financial bolts turned on Russia as insurance companies exit, London stocks stall

Financial bolts turned on Russia as insurance companies exit, London stocks stall

  • London Stock Exchange stops trading in GDRs related to Russia
  • Commercial insurers withdraw from Russian risks
  • Investors continue to sell off Russian assets
  • Deutsche Bank tests Russia’s tech hub

LONDON (Reuters) – Russia’s global financial isolation intensified on Friday as the London Stock Exchange suspended trading in its last Russian securities and some insurers pulled cover from issuers over Moscow’s invasion of Ukraine.

Banks, investors and insurance companies in recent days have tightened this pressure by exiting investments in Russia and stopping the provision of their services.

The London Stock Exchange said it had suspended GDRs, which represent shares in a foreign company, for eight Russian companies, including Magnet and Sistema, after freezing trading in 28 companies on Thursday. Read more

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The trade halt comes as Britain, the European Union and the United States continue to impose financial sanctions on Russia to prevent its companies from accessing Western markets.

Trade credit insurers, which provide a financial safety net for exports and imports, are backing away from covering firms exporting to Ukraine and Russia, industry sources said, at risk of sanctions, high claims or missed payments, in another shift in the noose over Moscow. . Read more

The move into the nearly $3 trillion global market will put more pressure on the already reeling Russian economy.

“Last week, commercial credit insurers will temporarily stop supporting new risks for Ukraine and Russia,” said Nick Robson, global leader in credit specialties at insurance broker Marsh.

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Six officials told Reuters that EU officials were also considering curbing Russia’s influence and access to financing at the International Monetary Fund in the wake of the invasion. L2N2V71XO

For its part, Washington will continue to adopt multilateral sanctions, [and] He targeted the wealth of the Russian oligarch as part of a pressure campaign,” Isaac Boltansky, director of policy at brokerage BTIG, wrote in a note on Friday.

Investors outside

British insurer and asset manager Royal London has become the latest Western investor to say it will sell its Russian assets as soon as possible, after a rush of similar announcements in recent days.

“We can’t trade these things anyway, but as quickly as possible we intend to divest,” Barry O’Dwyer, chief executive of Royal London, told Reuters. Read more

The chief executive of another major British investment group, Schroders, said on Thursday that Russian stocks and bonds were now “in a totally uninvestable world”. Read more

Swiss wealth manager Julius Baer (BAER.S) Two sources familiar with the bank’s operations told Reuters it had halted new business with wealthy Russians. Read more

However, some investors are piling into Russia-linked funds and see the current faltering levels as a potential cheap entry point for Russian assets. Read more

German Bank (DBKGn.DE) It said it is testing its operations in Russia, where it employs about 1,500 workers in a major technology hub, as banks with a large Russian presence grapple with the fallout from their growing financial isolation.

Additional reporting by Caroline Cohn and Lawrence White Additional reporting by Michelle Price, Tom Sims and Frank Sebelt in Frankfurt Editing by Alexander Smith, Jonathan Otis and David Gregorio

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