Investors reduced their exposure to Russia in the context of the Ukrainian crisis; banks stop the slide
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LONDON — Major investors including hedge fund Man Group and British asset manager abrdn said on Tuesday they were trimming positions in Russia following the country’s invasion of Ukraine.
Their statements came as shares of some European banks stabilized after sharp declines on Monday due to lenders’ exposure to Russia, but the sector remained volatile as Moscow entered the sixth day of its invasion.
British asset manager abrdn has about two billion pounds of client money invested in Russia and Belarus and has trimmed positions, chief executive Stephen Bird said.
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“We won’t be investing in Russia and Belarus for the foreseeable future,” Bird said.
Hedge fund Man Group has reduced its investments in Russia in recent weeks and now has “negligible” exposure to Russia and Ukraine in its portfolio, its chief financial officer Antoine Forterre told Reuters on Tuesday.
The London-based fund first reduced exposure to the region in its discretionary emerging markets fund in December, he said, before the hedge fund’s other strategies began to reduce risk over the course of the year. of the last two weeks.
Shares of Austria’s Raiffeisen Bank International rose 0.3% in early trading, stabilizing after falling 14% on Monday. Shares of Italian UniCredit rose 3.1%, after falling 9.5% on Monday.
The European Central Bank has placed banks with close ties to Russia, such as Raiffeisen and the European branch of Russia’s VTB, under close scrutiny following sweeping Western-imposed financial sanctions that have already pushed a Russian lender over the edge. two sources told Reuters.
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Tuesday’s stock price swings and investor comments came as Russia faced growing isolation over its invasion of Ukraine, with resistance on the ground denying President Vladimir Putin decisive early gains despite heavy shelling and a huge military convoy outside Kiev.
Shares of major banks rose with the European banking sector up 0.5%, after falling 4.5% on Monday.
The London Stock Exchange announced on Tuesday that it would stop trading two global certificates of deposit (GDRs) for VTB Bank after Britain’s financial regulator suspended them in response to the sanctions.
Amid the wild swings in bank stocks, bankers sought to reassure investors and the public, saying they are well capitalized and their footprint in Russia is relatively small.
Deutsche Bank chief executive Christian Sewing told the Bild newspaper that it would be wrong to assume a quick resolution to the crisis in Ukraine following the exclusion of Russian banks from the SWIFT payment system.
“That would be a bad expectation,” Sewing said.
(Additional reporting by Tom Sims and Huw Jones; Writing by Tom Sims; Editing by Miranda Murray, Edmund Blair and Susan Fenton)
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