Macro Update on the Russia-Ukraine Crisis: 3 March 2022

Throughout this crisis, a question which I think has not been given much attention by the media is what will happen to Russian stocks? While I am by no means an expert on these things, I thought I would share my ideas on what is going on mechanically and what I think might happen to the Russian stocks both on the Russian exchanges as well as the foreign exchanges such as the NASDAQ, NYSE, LSE and the Deutsh Borse.

While the Russian exchange has been suspended for a week, mechanically it will likely have difficulty opening as the clearinghouse behind it (based in Luxembourg) has suspended the trading of Russian Assets (both in Rubles and other currencies).

As for the large Russian companies listed on Secondary exchanges, each country has taken a different approach to dealing with the Russian assets listed on their exchange such as OGZPY stock, SPRCY stock and LUKOY stock. However effectively these have all been more or less suspended from trading. That then leads to the question of what will now happen to holders of these stocks? Well it is hard to say basically because the free-market rules that allow this level of international trade are not being adhered to by the West. So until the Russia Ukraine war ends and settles, we won't really know (I ramble a bit trying to discuss how the bank guarantees work for the secondary listings).

Some of the large companies with these secondary exchange listings include Gazprom stock (OGZPY), Sberbank stock (SPRCY) and Lukoil Stock (LUKOY) to name a few.

I am no expert on these matters, but this is just what I know about some of the functions that are at play!

#stocks #RussiaUkraine

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