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Russian Stocks in London Wipe Out 98% of Value in Two Weeks

March 2, 202299 views0

(Bloomberg) — U.K.-listed depositary receipts of Russian companies are evaporating in value as sanctions take effect.

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The Dow Jones Russia GDR Index, which tracks London-traded Russian companies, has plunged 98% in two weeks. The slump has wiped out $572 billion from the market value of 23 stocks, including Gazprom PJSC, Sberbank of Russia PJSC and Rosneft PJSC, according to Bloomberg calculations.

Wednesday’s continuing selloff triggered a wave of volatility halts. Within the first four hours of trading, dealing was briefly paused at least 15 times for lender Sberbank, state-run gas giant Gazprom and retailer Magnit PJSC. Trading in VTB Bank PJSC was suspended last week following sanctions.

The Dow Jones Russia GDR gauge, which tracks 11 of the largest Russian companies listed in London, fell as much as 81% Wednesday, taking a decline since Feb. 16 to 98%.

Depositary receipts for Sberbank have slumped 99% this week, while Gazprom fell 98% and steel producer Severstal PJSC lost almost 100%. Rosneft Oil Co. tumbled 79% and Lukoil PJSC sank 99%.

Europe is carving up Sberbank’s business in the region after sanctions sparked by President Vladimir Putin’s invasion of Ukraine prompted a run on its local deposits. Meanwhile, European energy companies are distancing themselves from Gazprom, with Shell Plc and Italy’s Eni SpA ending joint ventures.

With the Russian central bank taking the unusual step of closing stock trading on the Moscow exchange, the movement in shares of Russian firms listed elsewhere is an indication of how local equities may react to the sanctions once it eventually resumes. The three-day shuttering of stock trading is the longest closure for extraordinary circumstances since October 1998, according to the bourse.

Russia Keeps Stock Market Closed in Longest Pause Since 1998

The exodus out of Russian equities listed abroad may continue, with equity index operator Stoxx planning to drop 61 Russian companies from its indexes on March 18. MSCI is reviewing similar plans.