Financial screws turned on Russia as insurers retreat, London stocks stalled

The offices of the London Stock Exchange Group are seen in the City of London, Britain December 29, 2017. REUTERS/Toby Melville

LONDON, March 4 (Reuters) – Russia’s global financial isolation deepened on Friday as the London Stock Exchange (LSE) suspended trading in its latest Russian stocks and some insurers withdrew cover for exporters following to Moscow’s invasion of Ukraine.

Banks, investors and insurers have in recent days increased this pressure by abandoning investments in Russia and interrupting the provision of their services.

The LSE said it suspended global certificates of deposit (GDRs), which represent shares in a foreign company, for eight Russian companies, including Magnit and Sistema, after freezing transactions for 28 companies on Thursday. Read more

Later Thursday, the exchange announced that it had also suspended some exchange-traded funds with Russian securities.

The trade shutdowns come as Britain, the European Union and the United States continue to deploy financial sanctions against Russia to prevent its companies from accessing Western markets.

In another turn of the screw in Moscow, commercial credit insurers, which provide a financial safety net for exports and imports, are withdrawing coverage from companies exporting to Ukraine and Russia due to sanctions risks , high claims or missed payments, industry sources said. . Read more

The movement in the global market of nearly $3 trillion will put additional pressure on Russia’s already faltering economy.

“Over the past week, commercial credit insurers will have suspended new risk underwriting for Ukraine and Russia,” said Nick Robson, global head of credit specialties at insurance brokerage Marsh.

European Union officials are also considering limiting Russia’s influence and access to financing at the International Monetary Fund after the invasion, six officials told Reuters. L2N2V71XO

“Washington, for its part, will continue to adopt multilateral sanctions (and) target the wealth of Russian oligarchs as part of a pressure campaign,” Isaac Boltansky, political director at brokerage BTIG, wrote in a note Friday.

INVESTORS OUT

British insurer and asset manager Royal London has become the latest Western investor to announce it will sell its Russian assets as soon as possible, following a flurry of similar announcements in recent days.

“We can’t trade these things anyway, but as soon as we can we obviously intend to give them away,” Royal London chief executive Barry O’Dwyer told Reuters. Read more

The CEO of another major British investment group, Schroders, said on Thursday that Russian stocks and bonds were now “in the realm of non-investment”. Read more

Swiss wealth manager Julius Baer (BAER.S) has halted new business with wealthy Russians, two sources familiar with the bank’s operations told Reuters. Read more

Some investors are piling into Russia-related funds, however, seeing current levels of distress as a potentially cheap entry point for Russian assets. Read more

Deutsche Bank (DBKGn.DE) said it had stress-tested its operations in Russia, where it employs some 1,500 people in a major technology hub, as banks with a significant Russian presence grapple with the ramifications of his growing financial isolation.

Reporting by Carolyn Cohn and Lawrence White, additional reporting by Michelle Price, Tom Sims and Frank Siebelt in Frankfurt, Editing by Alexander Smith, Jonathan Oatis and David Gregorio

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