Sanctions against Russia have taken effect. Yesterday, NASDAQ put a temporary halt to trading of Russia-based stocks yesterday, a move that will further weaken Russia’s capability to raise equity capital. Stocks affected include Nexters Incorporated, HeadHunter Group PLC, Ozon Holdings PLC, Qiwi PLC and Yandex. Further, ICE excluded sanctioned Russian debt from its fixed income indices and for March rebalancing, all new issues will be blocked. The index also paused the trading of Cian PLC, MEchel PAO and Mobile Telesystems PAO. “It would not make a lot of sense for us to continue to include Russian securities if our clients and investors cannot transact in the market… It is obvious to all of us that the market is very difficult to trade and, in fact, it is uninvestable today,” Dimitris Melas, MSCI’s head of index research and chair of the Index Policy Committee, said to Reuters.
Top Russian banks have also been cut from SWIFT including VTB Bank, Alfa Bank, Sberbank, Gazprombank and Credit Bank among others. This together with freezing Kremlin’s more than $600 billion held in foreign reserves will exert more pressure in curtailing its capacity conduct international trade as well its ability to cushion the rubble from adverse shocks. The ‘golden passports’ have also been put on the spot to limit the Russian oligarchs from escaping the sanctions effect through citizenship sales. “We commit to acting against the people and entities who facilitate the war in Ukraine and the harmful activities of the Russian government. Specifically, we commit to taking measures to limit the sale of citizenship—so called golden passports—that let wealthy Russians connected to the Russian government become citizens of our countries and gain access to our financial systems,” read the EU joint statement issued on Saturday.
Italy, Spain, Germany, France, Portugal, Norway, and Finland have banned Russian airlines while the Baltic States, Latvia, Lithuania, and Estonia banned the airlines from using their airspace. In addition to the limiting measures, FIFA and UEFA suspended Russia from international football including 2022 World Cup.
It still remains uncertain how far the sanctions will stretch in affecting the American economy. Nevertheless, we are certain that the global dependence on Russia and Ukraine for key resources such as mineral fuels, natural gas, fertilizers and vegetable oils, will have daunting ramifications in the near future. While the cost of energy and oil soars, the disruption of food supply chains will drive the cost of food higher. With airline bans, travel restrictions are expected to ensue. This together with the high cost of oil will cause a climb on travel costs and overburden the travel and accommodation industry at large. Booking Holdings Incorporated, for instance, has shed $416.21 (16.08%) in 1 week while Airbnb Incorporated has plunged 11.99% in the same period.
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