Russia’s attack and subsequent invasion has not only wreaked havoc in Ukraine, it has destabilized markets around the world and hit the fortunes of even its closest allies. Tens of billions of euros have been erased from the fortunes of the elite Russia’s billionaire when the country’s stock market and the ruble plummeted after President Vladimir Putin unleashed his troops on Kiev.
Russia’s wealthiest people were already feeling the strain of rising tensions between the nation and Ukraine. But his net worth was made much worse by recent actions. In less than 24 hours, they lost 35,000 million euros.
plummeting. The damage has fallen across all asset classes. The benchmark MOEX Russia index closed down 33% in Moscow, the fifth worst drop in stock market history in local currency terms. It was the first time since the Black Monday crash of 1987 that a drop of that magnitude had hit a market valued at more than €45 billion.
Meanwhile, UBS Group AG triggered margin calls on some wealth management clients that use Russian bonds as collateral for their portfolios after writing down the loan value of some of the country’s debt to zero, Bloomberg reported.
A beaten market. One of the worst security crises in Europe since World War II threatens to deepen the market downturn in the region, but especially in Russia, which has already been hit with US and UK sanctions. A handful of billionaires, including Gennady Timchenko, are also subject to sanctions for their ties to Putin.
“There are a lot of people in the United States and Europe who want to attack them directly,” Chris Miller, co-director of the Russia and Eurasia program at the Fletcher School at Tufts University, explained about Russian billionaires in an interview.
With hands tied. and the mouth closed. Putin convened a few hours ago some of the nation’s business leaders to a meeting in the Kremlin. At least 13 billionaires attended the meeting: Vagit Alekperov, Pyotr Aven, Andrei Bokarev, Andrei Guriev, Mikhail Gutseriev, Suleiman Kerimov, Andrey Melnichenko, Leonid Mikhelson, Alexey Mordashov, Vadim Moshkovich, Vladimir Potanin, Dmitry Pumpyansky and Vladimir Yevtushenkov.
“What is happening is a necessary measure. We are simply left with no possibility of doing the opposite,” he told them. Apparently none of the billionaires have commented, some probably too scared of Putin to speak out against the invasion. But they are not immune. Russia’s roughly 116 billionaires have lost almost €80 billion since February 16, calculates forbes.
Herman Gref of Sberbank – one of the few heads of major state companies and longtime Putin confidants not on US sanctions yet – has worn a blueberry suit for the occasion. He does not look thrilled to be there. pic.twitter.com/TV267xlyxk
— max seddon (@maxseddon) February 24, 2022
fading fortunes. Vagit Alekperov, chairman of Lukoil, experienced the steepest drop in his net worth. It shrunk by almost a third in one day, falling by around €6.2bn to €13bn, according to the Bloomberg Billionaires Index. Shares of the Moscow-based oil producer fell 33% on Thursday.
Alexey Mordashov, chairman of the Severstal steel company, lost €3.2 billion, raising his fortune to €20 billion. Vladimir Potanin, chairman of Norilsk Nickel and currently the richest person in Russia, lost $3 billion. Alekperov and Timchenko have each lost about €10bn this year, or more than 40% of their fortunes.
Driven out. The British government earlier this week also sanctioned three other super-rich Russians, including Putin’s former son-in-law Kirill Shamalov. Following the Russian attacks on Ukraine, he also announced a freeze on Russian bank assets and a ban on Russian citizens holding more than €55,000 in a UK bank account.
Prime Minister Boris Johnson has also pushed Western leaders to go further and kick Russia out of the SWIFT international payments system, one of the main conduits for international finance and banking. Czech President Milos Zeman, once one of the most enthusiastic Putin supporters in Europe, called for Russia to be removed from SWIFT for a “crime against peace”, despite doubts from some European leaders about the economic consequences for Russia. all parties to block Russian business and energy.