Ukraine invasion: Rusal investors lose US$6 billion in Hong Kong stock sell-off while aluminium producer deflects all sanctions
- Sanctions by Western governments on Russia and its entities or individuals have not affected any part of Rusal’s business, company says
- Stock hammered in Hong Kong while trading in Moscow is halted, surrendering almost half of the rally in 2021; Rusal’s dollar bonds plunged to 45 cents on the dollar
Since Russia invaded its neighbouring country on February 24, the stock has tumbled 42 per cent while trading on the Moscow Exchange was halted. Yet, the miner said it remains untouched by a barrage of Western sanctions on Russian entities, individuals and its key exports like oil and gas.
Rusal counts Sberbank as one of its two principal bankers, a state-controlled lender that has since been blocked by the US Treasury Department as part of a broader move to prevent Russia from funding and sustaining its military assault on its neighbour. Its former controlling shareholder Oleg Deripaksa has also been sanctioned.
“Even in the absence of levied sanctions, some non-Russian market players may not interact with Russian companies in anticipation of future sanctions,” strategists at BCA Research said in a March 4 report. “Self-sanctions by non-Russian entities, in anticipation of stricter Western sanctions, will prevent valuable Russian metal exports from reaching global markets until suitable freight and financing is arranged.”