Bad day for the Russian oligarchs: Moscow Stock Exchange loses $75.9 billion in one day
Russia’s invasion of Ukraine is now a reality after weeks of negotiations in which the West has tried – unsuccessfully – to change Russian President Vladimir Putin’s mind. Faced with the military attack, the US, the UK and the European Union respond with sanctions with which they seek to ‘drown’ the Russian economy.
In the spotlight are, for now, the banks and assets of several Russian oligarchs, people very close to the Kremlin and who accumulate large fortunes thanks to the country’s main companies. Waiting for this ‘punishment’ to take shape, the greatest wealth has already suffered the first blow due to the stock market crash of the Moscow Stock Exchange, which in just one day has lost almost $75.9 billion and whose shares are mostly in the hands of the richest men in the country.
The collapse of the Moscow Stock Exchange this Thursday was historic with falls of almost 39.44% for the RTSI index, denominated in dollars, and 33% for the MOEX index, denominated in rubles. Thus, the market capitalization of the former went from $192.5 billion to just over $116.6.
Some latent losses that reduce the assets of the main shareholders. The big companies on the stock market are controlled by businessmen closely linked to the Putin regime. Many of them have made their fortune from privatizations after the dissolution of the Soviet Union, and have seen their value increase with the growth of the companies.
The richest man in Russia, according to the Bloomberg Billionaires Index, is Vladimir Potanin, who in recent hours has reduced his wealth by $600 million, 2% of the total, although he still ‘guards ‘ Nearly 1.8 billion. He is the president of Norilsk Nickel, the world’s largest producer of nickel and which yesterday left 14% of its value on the stock market. In addition, in 2018 he appeared on the so-called ‘Putin List’, a classification published by the US Treasury with the names of 210 Russians linked to the country’s president. The US document included a long list of people, many of them linked to the Russian stock market.
The energy sector has also increased the accounts of company owners in recent years. Russia has important oil and gas companies thanks to the country’s resources. However, despite Europe’s energy dependency, Western retaliation may work against it. Russia also relies on these revenues and the stock market hit was highlighted in the face of expected sanctions. The Lukoil oil company, which lost almost 23% in the last few hours, is in the hands of Vagit Alekperov, who controls 30% of its capital. Precisely Alekperov was deputy minister and responsible for supervising the oil industry during the time of the Soviet Union.
Many of the Russian businessmen have spread their fortune to the rest of Europe and, in fact, several of the Russian listed companies are also listed on the London Stock Exchange. The path has also been reversed and European personalities are part of the boards of Russian companies. However, this diversity could be affected after Putin’s military attack on Ukraine. Thus, for example, Matteo Renzi, former Italian Prime Minister and current senator of Italia Viva, resigned from his position as director of the Russian company Delimobil, the largest car-sharing company in Russia. To this resignation, which the Financial Times collects, is added that of the former Finnish Prime Minister, Esko Aho, who was part of the supervisory board of Sberbank.