Апреля 24 2018

Stocks of Rusal collapse 50% after United States sanctions

Апреля 24 2018, 07:06 | Alonzo Simpson

Rusal shares plunge sharply on U.S. sanctions Oleg Deripaska

Rusal shares plunge sharply on U.S. sanctions

New US sanctions have already proved very costly for one Russian oligarch.

Shares of the giant aluminium producer owned by Russian billionaire Oleg Deripaska plunged 50 per cent in Hong Kong yesterday as United States sanctions cast doubt on the future of the firm's banking and trading relationships.

Washington imposed sanctions on Friday on seven Russian oligarchs, including Rusal's former president Oleg Deripaska, 12 companies they own or control, as well as 17 senior Russian government officials.

EN+ Group, an industrial firm that went public previous year in London, suffered a combined 54% stock decline on Friday and Monday.

Shares in Deripaska's London-listed EN+ Group (ENPLq), an aluminium and power producer, fell 34% to $6.35.

"The US list may not be the final list and it feels like there will be more sanctions, so investors do not know which, if any, stocks to hold", said John Meyer, mining analyst at SP Angel.

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"Glencore is committed to complying with all applicable sanctions in its business and is taking all necessary measures in order to mitigate any risks to Glencore's business as a result of the designation of Rusal and EN+ as SDNs (specially designated nationals), including in respect of secondary sanctions", Glencore said in a statement.

The two companies did not respond to requests for additional comment on Monday. "Our customers do not import a lot from Russia but if we have customers who do, we would ask them if they are okay with continuing to use Russian raw materials before we do any purchasing", a Taiwan-based trader said.

The sanctions - created to make it nearly impossible for Mr Deripaska's empire to do business in greenback - pose a grave threat to an oligarch who has been seen as one of Russian President Vladimir Putin's closest allies.

Russian Federation has described the move as "absurd" and said it would not go unanswered.

The Kremlin spokesman, Dmitry Peskov, said Moscow was watching events on the markets closely but that an assessment of the impact of the sanctions would take time.

The benchmark Moex index was down 7% on Monday, while the RTS index, which trades in dollars, dropped as much as 9%. The Russian ruble has also sold off against the US Dollar and is down 3.5% so far.

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