Stocks of Rusal collapse 50% after USA sanctions

Howard TerryApr 12, 2018

Firms controlled by Russian billionaire Oleg Deripaska have seen their shares nose-dive on stock markets in the wake of USA sanctions, according to reports.

Shares in Rusal, an aluminium company controlled by Deripaska, almost halved on the Hong Kong stock exchange on Monday, according to the BBC.

The sanctions imposed on Rusal and its main owner, metals magnate Oleg Deripaska, mark the first time a major worldwide company has been targeted by Washington in its moves to punish Russian Federation for alleged meddling in the 2016 USA election.

Although the supply pipeline of the metal, more than two-fifths of which is sourced in Russian Federation, has not been directly hit by the sanctions, the market has been rattled by the inclusion of Deripaska on the blacklist.

They follow a diplomatic crisis sparked by the poisoning of former spy Sergei Skripal in Salisbury.

The U.S. Treasury on April 6 announced sanctions against seven Russian oligarchs and 12 companies they own or control, saying they were profiting from a Russian state engaged in "malign activities" around the world.

The Kremlin on Monday slammed the latest round of sanctions.

Moody's said it was withdrawing all ratings for Rusal due to its own business reasons.

"In our view, there are no such risks now and certainly no need to take systemic measures, but we will keep track of the situation", Elvira Nabiullina said.

The action targeted Russian oligarchs whose companies have wide-ranging involvement in worldwide capital markets.

Rusal's dollar bonds slumped to record lows, two major customers said they were reviewing their contracts, and the London Metal Exchange distanced itself from the aluminum giant on Tuesday, in the latest aftershocks from USA sanctions.

The company said the sanctions were likely to have a "materially adverse" impact on its business and finances. The Russian ruble has also sold off against the US Dollar and is down 3.5% so far. In addition, the list covers the Renova Group of Vekselberg, Ladoga Management of Shamalov, the Russian Financial Corporation bank (owned by Rosoboronexport, also listed), NPV Engineering, and Rothenberg's Gazprom Bureniye. Shares in Russian steelmaker Evraz were the biggest fallers on the FTSE 100 in London, closing 14.4% lower.

Prices of the metal, vital in the aircraft manufacturing and auto industries, jumped as traders protected themselves against the chance that United Company Rusal - the biggest aluminium maker outside China - will be prevented from supplying the global commodity market.

"We will obviously do what we have to do to ensure that we comply with applicable sanctions", Alf Barrios, Rio Tinto Aluminium's chief executive, said in an interview. "Buyers are scrambling to try to replace where they can, to plug the gap left by not having Russian-origin metal", said Robin Bhar, head of metals research at Societe Generale in London.

The sanctions, the latest U.S. effort to punish Moscow for "malign activity around the globe", also affect 17 senior Russian government officials.

Related Articles:



« Previous article
Next article »


Popular Pages

Don't leave Syria in the hands of Trump alone
His most recent warning on Twitter early Wednesday said Russian Federation threatened to shoot down USA missiles fired at Syria . The Damascus regime and key ally Russian Federation have both rejected any use of toxic substances as "fabrications".

Volkswagen says considering board 'changes', may name new CEO
Volkswagen is controlled by the Piech and Porsche families, which have 52 per cent of voting rights. Its profit margin climbed to 7.4% of sales past year from 6% in 2015, when the crisis hit.

Dwayne Johnson Confirms Planned 2019 Filming Start Date For 'Black Adam'
Johnson's remarks here sound eerily familiar to something he told MTV News nearly a year ago to the day. A new report suggests the production and shooting of DC's Black Adam might probably begin in 2019.

Audi E-tron Vision Gran Turismo Comes to Life for Formula E
Audi chief designer Marc Lichte hints that this vehicle previews what we can expect on future electrified cars from the brand. Stylistically, the Audi e-tron replicates the Vision Gran Turismo racing Audi 90 Quattro IMSA GTO model in 1989.

Nevada struggles to close gender pay gap, study finds
It's the symbolic day that represents the day up to which women have to work in 2018, to make up for the pay their male counterparts earned in 2017.

Federal agents seize documents from President Trump's personal attorney
CBS News' justice department correspondent, Paula Reid, told Inside Edition she was surprised by the outburst. Rosenstein, numerous president's advisers and allies are fearful that the president also intends to fire Mr.

Game of Thrones shot longest battle in show history, report says
The grueling shoot was shot consecutively for nearly two months, and it is the longest shoot in Game Of Thrones history. I just hope that the production is able to keep the characters at the center of the fight this time.

House Speaker Paul Ryan won't seek re-election
Speaker Paul Ryan (r), shakes hands with President Donald Trump Feb. 28 before Trump's address to a joint session of Congress. Ryan suffered a major defeat, however, when Congress rejected a measure he strongly backed to repeal the Affordable Care Act.

U.S. airline in big order for Boeing jets
The aircraft producer reported $4.80 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.91 by $1.89. The ratio turned negative due to BA positioning: 65 sold and 614 reduced. 391 grew positions while 148 funds amassed positions.

Texans announce 2018 preseason opponents
Last year, the Dolphins came back from a 17-0 deficit to defeat the Falcons 20-17 during the regular season. And on top of all of that, the Rams also signed defensive lineman Ndamukong Suh in free agency.