Photo by Kanchanara
The current crisis in Ukraine has caused many countries to take measures against Russia, including economic ones. It hit the Russian market hard, resulting in a distressed level.
On Thursday, a Russian-exposed ETF momentarily soared by over 100% in London, indicating that a few investors spotted the latest turmoil levels as a prospectively non-expensive approach for Russian assets. However, the Ukraine-Russia conflict continues to escalate.
Exchange-traded funds (ETFs) are one way to access the Russian market, while Western countries placed harsh economic sanctions on Moscow for their involvement in Ukraine. These funds trade even if liquidity in the underlying assets decreases. However, this makes it hard to determine the exact value.
Schroder CEO Peter Harrison says that his company is currently shut down, and stocks and bonds are “in the realms of utterly uninvestable.”
Schroders has pending sell orders on the Russian market, among other asset handlers.
Although several investors have not nudged Moscow securities, shares in BlackRock’s iShares MSCI Russia ADR/GDR ETF, which records depositary receipts of Russian companies such as Sberbank and Gazprom, concluded with a profit of 21%, following an all-time low on Wednesday. Previously, they had gained more than 100%.
The ETF’s price has fallen by over 80% this year, and volatility is expected to stay high until a potential solution is indicated. However, hope arrives in the form of new peace negotiations on Thursday, which could end these warring relationships between Russia and Ukraine.
A Securequity sales trader, Jawaid Afsar, said, “The bounce reflects both bargain hunting and also potential belief that some resolution may be in sight.”
The iShare ETF has momentarily halted the making of new shares, which aligns with a similar move other exchange-traded funds exposed to Russia did; the London Stock Exchange and Deutsche Boerse, on the other hand, have held trading in numerous depositary receipts.
