Russian Bonds, Stocks, Ruble Tumble On Latest US Sanctions
The Russian Ruble slumped 1.6% today, its biggest drop in over 4 months as investors kneejerk-reacted to the US latest round of restricted-funding-access sanctions. The Ruble is back at 2-month lows against the USD. The bonds of several of the sanctioned companies are also breaking down with Rosneft yields up 89bps at 6.22% and Novatek yields surging to 6.44% as even though Fitch confirms these firms can manage their own cash needs through 2015, as one analyst notes, "the lack of ability to raise long-term dollar funding will become a big economic limitation for all of them." The broad Russian stock market is also tumbling, down to 2-month lows (though still notably above the US markets since sanctions began).
Sanctions 3.0 are having their normal short-term negative effect...
as The Ruble is also being sold notably...
We wonder how long before BRICS Bank steps in to provide 'temporary' funding... and just how quickly Putin's "boomerang" will hit if this selling continues.
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