It was a black Monday for companies controlled by Russian plutocrat Oleg Deripaska, as shares plummeted in a market reaction to Friday’s announcement from the US of sanctions on 7 Russian oligarchs and the companies they control.
Russian aluminium giant, Rusal, which accounts for 7% of the world’s aluminium production, saw shares plummeting on the Hong Kong stock exchange to close at 50% down with HK$2.34, while mid-session trading in Moscow had its shares down by 23%.
The negative reaction has cost Rusal more than $4.3 billion in market capitalization leading to fears the aluminium giant may default on part of its debt.
A statement from Rusal said the impact of sanctions “may be materially adverse to the business and prospects of the group,” but that it will continue to operate and abide “by all applicable laws and regulations.”
Other Russian enterprises have suffered a similar fate – shares in steelmaker Evraz have dropped more than 15% on the FTSE 100 in London.
Moscow reiterated its support for Russian companies affected by the sanctions, with news agencies quoting deputy prime minister Arkady Dvorkovich as saying, “in the current situation, as their position becomes more difficult, we will offer them this support.”
With the Moscow stock market down 6.5% and the country’s currency the rouble falling 2% to the US dollar, Russia is definitely feeling the brunt of Friday’s announcement by the US.
Photo Credit: (hurd.house.gov)