Russian Stocks Pulled from Major Indexes
Russian stocks are being yanked from the DJI and S&P 500
before trading next Wednesday
With Russia’s invasion of Ukraine, index powerhouse S&P Dow Jones Indices said Friday that all equities listed and or located in Russia will be removed from its benchmarks, further cutting the country off from the rest of the global economy.
The move will effectively strip Russia of its “emerging market” economic status.
S&P Dow Jones Indices said the elimination, which takes effect before the market opens next Wednesday, also affects Russian American depositary receipts (ADRs).
The company, which manages the Dow Jones Industrial Average and the S&P 500, also announced that Russia will be declassified as an emerging market and put in a separate category.
Russian military assaulted Europe’s largest nuclear power plant in Ukraine early Friday morning, igniting a fire at a nearby training site.
The attack was labelled a war crime by the US embassy in Kyiv.
Trading in three Russian ETFs — Franklin FTSE Russia ETF (FLRU), iShares MSCI Russia ETF (ERUS), and Direxion Daily Russia Bull 2X Shares — was suspended by the NYSE earlier Friday (RUSL). The halts were attributed to “regulatory concerns,” according to the exchange.
Since the geopolitical tensions erupted, exchange-traded funds that monitor Russian markets have been in a spiral. After losing 27.9% on Monday, the iShares MSCI Russia ETF fell 33.4 percent on Tuesday, its worst day since the fund’s launch in 2010.
In the meantime, the VanEck Russia ETF finished February with a loss of 54.9 percent, its worst month ever.
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Mar 08
20220
commentsBy The Minister of Capitalism
In News
Tags Market Commentary oil russia sanctions stock market
Russia Threatens $300/Barrel Oil if The West Cuts Energy Supplies to Russia
In response to sanctions imposed,
Russia threatens that oil could skyrocket to $300/Barrel,
effectively crushing the European economy.
If governments follow through on threats to stop buying energy from Russia, Western countries might face oil prices of over $300 per barrel and the eventual shutdown of the main Russia-Germany gas pipeline, a senior minister said on Monday.
On Monday, oil prices rose to their highest level since 2008 after US Secretary of State Antony Blinken indicated the US and its European partners were considering blocking Russian oil imports.
“It is very evident that rejecting Russian oil would have disastrous effects for the world economy,” Russian Deputy Prime Minister Dmitry Rogozin said.
In a statement shown on state television, Minister Alexander Novak stated.
“The price increase would be unpredictably high. It would cost at least $300 per barrel.”
According to Novak, replacing the volume of oil received from Russia would take more than a year, and Europe would have to pay much higher rates.
“European leaders must be honest in their warnings to people and consumers,” Novak added.
“Go ahead and reject Russian energy supply if you want to. We’re prepared for it. We know where the volumes may be redirected.”
Novak said Russia, which provides 40% of Europe’s gas, was fully complying with its responsibilities, but that it would be absolutely within its rights to react against the European Union after Germany blocked the Nord Stream 2 gas pipeline’s certification last month.
“We have every right to take a matching decision and impose an embargo on gas pumping via the Nord Stream 1 gas pipeline in connection with… the imposing of a restriction on Nord Stream 2,” Novak added.
“We haven’t made such a choice yet,” he remarked. “However, European politicians’ words and charges against Russia drive us in that direction.”
JP Morgan estimates that Russia produces 12% of the world’s total supply of oil. But almost half of what Russia produces goes to Europe, verses only 3% going to the United States.
As for natural gas, Russia produces about 17% of the world supply and about 40% of that goes directly to Europe as well.
If the Russians were to cut off supply in retaliation, it would put all of Europe in an incredibly tough position.
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