As soon as the United States announced a new round of sanctions, the Russian stock market crashed. What is going on? Why did the United States suddenly announce a new round of sanctions? Could it be that this is a murderous attack on Russia, so it deliberately caused the Russian stock market to crash? There was also a reason for the Russian stock market crash, which caused the ruble to plummet.The truth about the Russian stock market crash
The United States announced a new round of sanctions against Russia, and the Russian financial market violently fluctuated, the largest decline in 4 years, and it almost came to Russia Life. The Russian stock market crashed, so which industries in Russia have the greatest impact.
On April 9, the Russian capital market oscillated sharply, and the stock market crash was accompanied by a sharp drop in the ruble. As of 21:26 Beijing time, the Russian RTS index plummeted 11.45%, and the intraday drop reached 11.79%, the largest one-day drop since the index was established in September 1995. At the same time, the Russian ruble depreciated 3.2977% against the dollar.
Many market analysts believe that the Russian capital market shock is related to the previous US announcement that it will sanction a group of Russian individuals and entities. Rusal, companies related to the petrochemical energy industry and other companies in Russia that rely heavily on imports and exports will be the main targets. Because there are too many unknowns, there is a certain panic in the market. The follow-up direction of the market will depend on the response measures taken by Russia.
Rusal's share price suffered a "half cut"
In the face of the sudden plunge in the Russian stock market, Kirill Tremasov, the director of the Moscow-based analysis department of the investment company Loko-Invest, said in an interview with Bloomberg, “We have not seen it for a long time ( Investors have dumped Russian assets on such a large scale. Such a plunge is reminiscent of the tragic situation in 2014 (referring to the Crimean crisis that year led to a sharp drop in oil prices)."
According to Xinhua News Agency, the U.S. Treasury Department announced on April 6th local time that it would impose sanctions on a group of Russian individuals and entities in response to Russia’s "all malicious acts" worldwide. According to senior US government officials, the sanctions included 7 Russian business leaders and 12 companies owned or controlled by them, 17 senior Russian officials, a Russian state-owned arms import and export company and its affiliated banks. According to sanctions, the assets of sanctioned individuals and entities in the United States will be frozen, and U.S. citizens will not be allowed to conduct transactions with them. Non-US citizens may also be sanctioned for dealing with or on their behalf.What are the consequences of the Russian stock market crash?
The US Treasury Secretary Mnuchin issued a statement on the same day that the sanctions were based on an agreement signed by President Trump last year. Sanctions against Russia, Iran, and North Korea, and a "Kremlin report" issued by the U.S. Treasury Department in January this year. The report lists the names and positions of 114 high-ranking Russian government officials, as well as 96 Russian "oligarchs" with net assets of more than $1 billion.
According to CCTV news, according to the information currently disclosed by the US media, the top Russian officials and business leaders who have been sanctioned by the US this time include: Vladimir Kolokolitsev, Russian Minister of Internal Affairs; Nikolai -Patrushev, Secretary of the Security Council of the Russian Federation; Alexei Jiuming, Governor of Tula Region, Russia; Suleiman Klimov, Member of the Council of the Russian Federation (Upper House of Parliament), billionaire; Ole Ge Deripaska, chairman of the world’s largest aluminum producer "Rusal United" (Rusal); Viktor Vekselberg, owner of the Russian Lenova Group; Vladimir Bogdanov , Rosneft executives.
It is worth mentioning that the "Daily Business News" reporter noticed that before the opening of the Russian RTS index, Rusal, which is listed on Hong Kong stocks, had plummeted. It eventually closed down 50.43% that day, and its market value fell by more than 35.5 billion Hong Kong dollars.
"The market does not respondReasonable"
Regarding the US sanctions, the Russian Ministry of Foreign Affairs immediately issued a statement stating that the US has used sanctions to eliminate competitors in overseas markets and has actually turned itself into an enemy of market economy and free and fair competition. The United States has imposed several rounds of sanctions on Russia since 2011. Not only has it failed to achieve any results, it has also harmed the American people who work in American companies that have dealings with the sanctioned Russian companies and caused themselves losses.
Former Federal Reserve Credit Risk Manager Chad Roberts said in an interview with the "Daily Business News" reporter that the new US sanctions against Russia may seriously threaten Russia's already sluggish economy; and in 2014 Kerry After the Mia crisis and the first round of sanctions on Russia, the Russian economy has only just begun to improve slightly. He also pointed out that the market’s response to the latest US sanctions against Russia was unreasonable, but the sanctions did increase investors’ concerns.
William Jackson, a senior emerging market economist at Capital Economics, expressed a different view. He believes that "the sanctions imposed by the United States on Russia have caused turmoil in the Russian market and tightened financial conditions. But at this stage, This will not have a significant impact on Russia’s overall economic growth."
The head of a large private equity department in Shanghai pointed out in an interview with the "Daily Business News" reporter that the impact of the US sanctions depends on the specific measures taken by the Russian government. If the Russian government does not intervene strongly, the situation is not optimistic in the medium and long term. At present, some institutions are profiting by creating panic through topics and short orders. If these institutions eventually succeed, the economy of the short market will recover very slowly.
"Because the reasons for the U.S. sanctions on Russia are not clear, the market is worried that some other large companies may also be included in similar sanctions lists." A fund manager of London asset management company Blackfriars told Bloomberg, " There are too many unknowns, which is why the market panics."