US Sanctions Cause Richest Russians to Lose $12 Billion in a Day

Marcus Newton
April 10, 2018

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

Aluminum posted the biggest gain in more than six years and palladium jumped amid concerns that supply may be disrupted after the US imposed sanctions against Russian oligarchs including Oleg Deripaska and his United Co.

Aluminum stocks rose as giant Russian producer United Company Rusal warned on Monday that Trump administration sanctions could land the company in technical default of debt obligations.

The share price fell 50 per cent to HK$2.32 yesterday, according to pricing from the Hong Kong Exchanges and Clearing website. Its market value in London has been slashed by $2 billion. The company floated its shares in London in November, raising $1bn (£710m), despite concerns that it could face sanctions related to Deripaska's ties to Putin.

The new sanctions promise to make it much more hard for the companies to do business overseas.

The sanctions are created to stop Mr Deripaska and associated companies from doing business in U.S. dollars and cut him off from any dealings with United States citizens.

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The Kremlin spokesman, Dmitry Peskov, said Moscow was watching events on the markets closely but that an assessment of the impact of the sanctions would take time.

The two companies did not respond to requests for additional comment on Monday. It is up around 7 percent since the sanctions were announced on Friday. The sanctions were initially imposed to punish Russian Federation for actions in Crimea, Ukraine, and Syria, and for its alleged attempts to subvert Western democracies.

The US said it imposed the latest sanctions because of Russian activity in Ukraine, its support of President Bashar al-Assad in Syria's civil war and for subverting Western democracies.

Prime Minister Dmitri Medvedev said Monday that Russian Federation would respond to the sanctions.

The sanctions could also threaten a tentative revival in Russia's economy, which had only just started to recover from those imposed in response to its annexation of Crimea in 2014.

The RTS index, which trades in dollars, fell 9.75 percent, and the MOEX index, which trades in roubles, fell 6.9 percent.

Other reports by MaliBehiribAe

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