Financial bolts turned on Russia as insurance companies exit, London stocks stall
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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Later on Thursday, the exchange said it had also suspended some exchange-traded funds with Russian securities.
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.
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) target the wealth of the Russian oligarchs as part of a pressure campaign,” Isaac Boltansky, director of policy at brokerage PTIG, wrote in a Friday note.
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 clearly 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.
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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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