Russian citizens and businesses have been hit by drastic sanctions in response to their invasion of Ukraine last week.

The list of disciplinary measures is coordinated by the United States, United Kingdom, the European Union, and other countries and can grow as the war progresses. As Britain’s Prime Minister Rishi Sunak said, the purpose is to separate Russia from the financial system. This is a financial war that has been fought in many ways, including keeping Russia out of the SWIFT payment system and preventing central banks from operating within the world’s financial infrastructure.

British parliamentarians are expected to vote on a bill that bans major Russian companies from raising money in London and prevents Russia itself from raising money through the sovereign debt problem. According to the government, these include “measures to prevent Russian companies from issuing transferable securities and money market products in the UK.” Some lawmakers are calling for Russian companies to be delisted from the London Stock Exchange.

London is a global center for both foreign and government equity and fixed income financing. Especially in the case of stocks, listed companies rely on the following corporate behavior: Rights issue and stock placement to raise capital for expansion plans.. The City of London is also the global center of buoyancy, EN + (EN + (EN +)ENPL) 2017.

Delisting may be a popular move, but it will be an unprecedented move. More usually, if a company does not meet the listing requirements or is acquired by another company, the exchange itself makes this decision. From a regulatory perspective, the FCA is the “listing regulator” that oversees the actions of the LSE.

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The British government recently Strengthen the authority to intervene in foreign acquisitions in the strategic sectorHowever, delisting is one step beyond this. The law was designed to address “hostile actors” and China and Russia are considered most likely to meet that definition.

First, let’s take a look at the major Russian companies listed on the London Stock Exchange.

The three are directly listed and are the FTSE 100 steel maker Evraz (EVR) And Gold Miner Polymetal (POLY) And Petropavlovsk of the FTSE 250 (POG). The shareholder value of these companies is declining rapidly, and we see a significant decline every day. For example, Evraz and Polymetal have lost more than three-quarters of their value so far this year. FTSE Russell Confirmed that Evraz and Polymetal will leave the FTSE 100 and join the FTSE 250 Petropavlovsk is to leave the FTSE250.

The UK government does not suggest that these listed Russian companies will be subject to sanctions. However, some lawmakers have demanded a freeze on the assets of Roman Abramovich, the owner of the Chelsea Football Club, which holds a significant stake in Evraz. He put the club up for sale this week.

Next, there are Russian companies with stocks that are classified as Global Depository Receipts (GDRs) and American Depositary Receipts (ADRs). These allow foreign investors to purchase foreign companies listed on the home exchange. For example, the British shell (SHEL) If a US investor wants to buy in dollars, it can be purchased as an ADR in New York.

Among these GDRs, VT Bank (VTBR) Was placed under the UK sanctions system and its shares were suspended. Russian state-owned Sberbank (SBER) Was added to the UK sanctions list on Monday and is currently suspended as it lost more than 99% of its value in 2022. The European Central Bank says it expects Sberbank’s European operations to fail. “We will bring a complete asset freeze to all Russian banks in a few days, aiming to coordinate with our allies,” UK Foreign Minister Liz Truss said on Monday. EN + was suspended by the London Stock Exchange on Wednesday. That is, all GDR and ADR stocks are currently suspended.

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This is a fast-moving situation, so our goal is to keep both of these lists up to date. The list of Russian companies includes only those companies that have been added since the start of 2022, as the existing names are already on the list.Morning star is approaching tComments from the London Stock Exchange, Ministry of Finance, Foreign, Commonwealth Development.

UK sanctions net expands to Russian companies

Source link UK sanctions net expands to Russian companies