The world tries to corner Russia in the financial system with sanctions that already have their Domino effect. The world’s largest sovereign wealth fund, Norges Bank – with more than 1.16 billion euros under management-, has been one of the first big players in the market in move token. And he is not alone among the large institutional investors. The largest private pension fund in England has followed in its footsteps, and JP Morgan and Danske have also reacted in some of their funds. They have been joined by BlackRock, one of the main shareholders of the large Russian listed companies.
The Norwegian government has decided to freeze holdings in Russian companies in its pension fund and the goal is to get rid of them completely, Prime Minister Jonas Gahr Store explained on Sunday. Norges Bank IM had about 25 billion kroons (about 2.8 billion dollars or 2.5 billion euros) in Russian companies at the end of the year, according to Bloomberg.
The largest private pension fund in England, Universities Superannuation Scheme, which has £90bn under management among its 500,000 holders, has also announced that it will sell all its Russian holdings. The assets that are linked to the country account for 450 million pounds, according to The Guardianand in recent weeks the fund has already disposed of half of this amount, and is still trying to place the rest of its holding.
“We think there is a clear financial risk in these assets, as well as a moral issue,” said Simon Pilcher, the fund’s director. “Moral is an engine for finance, and if you are an investor and you do not take into account the moral impact of your investments, you are short-term and immoral,” says Pilcher, who acknowledges that it is very difficult to get these assets on the market. .
For its part, JP Morgan AM has suspended the Emerging Europe Equity Fund assuring in a letter to investors on Monday that it would not accept any orders to buy or sell shares in the fund. AND Danish IM he did the same with his Eastern European fund.
BlackRock: “In order to protect the interests of investors in the Blackrock Global Funds-Emerging Europe Fundthe director of the board of directors of BlackRock Global Funds made the decision to suspend the valuation of the fund”
Vanguard O BlackRock are other major holders of shares in the country. Will they follow the same steps? From BlackRock they explained to the Economist on Monday they were monitoring guidelines issued by regulators. And they have already decided to suspend one of their funds, the Emerging Europe Fund. “In order to protect the interests of investors in the Blackrock Global Funds-Emerging Europe Fund, the director of the board of directors of BlackRock Global Funds made the decision to suspend the valuation (and consequently the issues, redemptions and conversions) of all share classes with effect from March 1, 2022 inclusive. This suspension will be maintained until further notice”, explained the firm in a letter to its clients, in which it clarified that the participant, “while the fund is suspended, will not be able to buy, sell or exchange shares, but will be able to receive account statements and updates”.
Many of these large investors hold their holdings through index products and ETFs (exchange traded funds), which track benchmark indices on the Moscow stock exchange or baskets of emerging stocks. In Europe, however, Russia weighs little in general in the industry. Before the armed conflict began, “Russian equities represented only 0.27% of long-term European assets in funds and ETFs, that is, 32.8 billion euros of the 12 trillion euros of total assets,” he points out. James Gard, of Morningstar, according to data from the firm at the end of January.
Behind the big firms
In the capital of the largest Russian companies by market capitalization you can see those well-known names of big managers. Gazprom It is the country’s largest listed company by stock market value, with 60.6 billion euros – at the beginning of the year this figure exceeded 96 billion euros, before the added collapse of the ruble. 49.34% controlled by the Russian State, the following reference shareholders in the gas producer are Vanguard (1.38%), BlackRock (1.21%) and Norges Bank (0.69%), according to the latest data available in Bloomberg. Thus, Norges’ participation would be valued at 418 million euros at market prices.
On Novatekthe second largest gas company in the country and the second largest listed in Moscow, include Vanguard (0.87%), Standard Life Aberdeen (0.28%) and Norges Bank (0.18%).
In the largest Russian oil company, Lukoil, Citigroup has a significant weight, with 31.38%, while Vanguard controls 4.70% and BlackRock, 3.60%. With lower percentages, the large managers are also in the capital of the oil company Rosneft and in the mining Nornickel (see graph).
Gas, coal, aluminum and crude oil rise 10% since the beginning of the invasion
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