“The stock exchange is an important capital market for companies, and a well-functioning stock exchange is good for the business climate. This is in the best 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 of these sanctions and companies leaving. They will all remain committed to Russia for a long time to come, keeping companies and investors away, and hindering Russian companies from financing and growth.”
The market capitalization of the MICEX, the market capitalization of all listed stock funds, reached $650 billion at the beginning of this year and only a fraction of it remains. Foreign institutional investors, including pension funds, own one-sixth of the stock market’s value, or about $85 billion. So there must be a significant decline in the value of Russian investments.
ABP was on time
The ABP pension fund narrowly escaped significant losses in Russia’s portfolio. At the end of September 2021, the fund invested 2.2 billion euros in Russian stocks and bonds, but the fund decided to reduce significantly at the end of the year. For example, a significant part of the investments in Russian oil and gas companies were 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 is aware that the sale is currently complicated and indeed impossible, because Russia prohibits the sale of Russian interests by foreign investors.
Oil giants Shell and BP hit the same wall. They want to withdraw from Russia by selling activities, but the Russians do not want to take it, and so Shell and BP leave empty-handed. BP says it expects to write off $22 billion, while Shell expects to lose $3 billion.
Russia in the war is costing investors, investors and companies a lot of money whether they are on the left or the right, so the financial pain is not only on the Russian side.