Investors from Western countries could lose up to 170,000 million dollars due to the new sanctions imposed against Russia due to the current situation in Ukraine, reported this Saturday the Financial Times.
US investment management firm BlackRock held about $15.8 million worth of shares in Anglo-Russian precious metals mining company Polymetal, listed on both the Moscow and London Stock Exchanges, which were distributed in four pure asset funds.
And after Russian President Vladimir Putin announced on February 24 “a special military operation to defend Donbass” to “protect people who have been subjected to abuse and genocide by the Kiev regime for eight years” , the company’s share price plummeted about 70%. In fact, Polymetal has been expelled from the FTSE 100, the benchmark stock market index of the London Stock Exchange.
BlackRock is among a large group of global buyers, from pension plans to hedge funds to sovereign wealth allocators, holding Russian properties that were worth nearly $170 billion at the end of 2021.
With Moscow’s stock markets temporarily suspended, the buying and selling of shares in many foreign-listed Russian companies is on hold, and bonds are virtually untradeable, leaving asset managers grappling with the prospect of huge losses.
What’s going on?
“We have been changing as fast as possible in close coordination with many other things to meet the needs of our buyers in a very advanced and fluid state of things,” BlackRock explained in a statement.
Due to the current situation in Ukraine, numerous countries, including the members of the European Union, the US, the UK and Canada, announced new sanctions against large financial institutions and companies in Russia and against the political and financial elites of the country, as well as personal measures against President Vladimir Putin and his Foreign Minister, Sergei Lavrov, among other high officials. In addition, Western countries agreed to disconnect several Russian banks from the SWIFT interbank system.
To date, 26 asset management firms, including BlackRock, JP Morgan Chase, Amundi, UBS, BNP Paribas, Abrdn, Schroders and Pictet, have frozen heavily advertised funds from Russia, preventing investors from move their more than $4.3 billion into mixed assets.