MOSCOW, April 9 - RIA Novosti, Elena Lykova. The stock market in Russia fell sharply after the US decided to impose new sanctions against the Russian Federation, the greatest damage was done to the securities of Rusal and En +, as well as Sberbank, but other shares on the Moscow Exchange also fell in price.
By the close, the Moscow Exchange index fell by 8.34% to 2090.88 points, the RTS index - by 11.44% to 1094.98 points. The undisputed leader of the fall on Monday on the Moscow Exchange was Rusal's papers - by 16.50 Moscow time, the company's shares had fallen by 26.7%, to 28.3 rubles per share. The company earlier on Monday warned via the Hong Kong stock exchange about a possible technical default on some of its loan obligations due to sanctions. Also, Rusal, according to Bloomberg, asked its customers to suspend payments after the introduction of US sanctions against the company.
The dollar exchange rate increased by 2.49 rubles - up to 60.65 rubles, the euro - by 3.26 rubles - up to 74.70 rubles.
The fall of the Russian currency was not prevented by a sharp increase in oil prices: Brent oil rose to $68.56 per barrel.
Market crash
The Moscow Exchange Index during trading against the backdrop of new US sanctions fell by 9.5%, to 2065.32 points, which is the lowest since the end of October 2017. Against the same background, the RTS index fell by 12.6% to 1081.28 points, the lowest level since the end of August last year. The collapse of the ruble exchange rate put additional pressure on the RTS index.
"The ruble indicator went down to the five-month" bottom "in the area of 2080 points. The entire increase in the first quarter" left "the indicator in less than a day," expert Anna Bodrova from Alpari commented on the fall in rates.
According to Timur Nigmatullin from Otkritie Broker, the imposition of sanctions provoked a "domino effect" and continued to put pressure on the quotes of ruble assets, especially on the shares of companies in one way or another connected with RusAl, whose management admitted the possibility of a technical default.
"Trump's harsh statements became an additional driver for the sale. On his Twitter, he wrote that Russia would pay a "big price" for aiding the Syrian authorities in carrying out a chemical attack," Nigmatullin said.
According to Bodrova, long-term trends on the exchange are broken, and support levels on the emotional market do not matter, and the Moscow Exchange index may remain within 2050-2085 points if the situation on foreign markets does not worsen. However, according to the analyst, taking into account the government's order to develop a mirror response to sanctions, Russian quotes will remain in the "red zone".
As Bodrova notes, the current situation is "a price to pay for carelessness and underestimation of risks." According to her, investors have ignored the expansion of the sanctions list for too long, believing that it does not affect the business climate. “The fact that Hong Kong traders were the first to worry indicates the seriousness of what is happening,” Bodrova said, adding that the overheating of the capital market, which has not experienced a real correction for a long time, also played its role.
The psychological factor that will support the Mosbirzhi index is the level of 2000 points, from which a long-term uptrend begins, originating from the lows of 2014, said Bogdan Zvarych of Freedom Finance. According to him, the bulls will try to take advantage of technical factors and turn the market around. If the Moscow Exchange index falls below 2000 points, the next target for the decline will be the level of 1800 points, Zvarich calculated.
New sanctions
On Friday, Washington imposed sanctions on seven Russian entrepreneurs, 14 companies they control, and 17 officials. Among others, the list includes Secretary of the Security Council Nikolai Patrushev, head of Roskomnadzor Alexander Zharov, director of the National Guard Viktor Zolotov, and Interior Minister Vladimir Kolokoltsev.
In addition, Oleg Deripaska and the En + Group controlled by him, the GAZ group, Basic Element and RusAl, Viktor Vekselberg and the Renova group, as well as Suleiman Kerimov, Kirill Shamalov, the head of Gazprom Alexei Miller, were sanctioned. , head of VTB Andrey Kostin.
The United States called the new measures "a signal to Moscow." The White House later explained that the latest sanctions were not linked to any specific events, but were caused by "the ongoing and increasingly shameless trends in Russia's behavior around the world."
In turn, the Foreign Ministry advised the United States to get rid of illusions and announced a tough response. According to presidential spokesman Dmitry Peskov, these restrictions are blatant from the point of view of legality and are "trampling on everything and everyone." He noted that a thorough analysis is needed in this situation.
This week, the list of the richest people on the planet has changed dramatically - Forbes tracked the losses of Russian oligarchs after the introduction.
Every hour, the "whales" lost millions of dollars, and the whole world was watching. It all started with fluctuations in the exchange rate: since April 9, the assets of the top 50 Russian businessmen in total have fallen in price by more than $11 billion.
Reason for panic
As is known, preliminary economic restrictions did not have any special consequences for the Russian Federation: the economy there was already “limping”, and those close to the Kremlin did not live in poverty. However, now the situation is beneficial to Ukraine, because the West is gradually beginning to fulfill its promises regarding support and opposition to the aggressor at the international level.
Russian economists, on the contrary, made positive forecasts a few days ago: S&P upgraded the country's credit rating to investment grade, but it turned out that America was simply in no hurry to make key decisions. Previously, it was only about personal sanctions or bans for individual companies, while now it has hit the largest stock players and public figures.
No sane foreigner will cooperate at his own risk with firms that are on the "Kremlin list".
List of "victims" and mirror actions of the Kremlin
In addition to Oleg Deripaska and a group of his once very successful companies, the sanctions affected such shareholders as Safmar, Rusal, Mechel, Polyus, Sberbank - not the last on the Russian market. True, only until recently.
For example, the owner of the Renova company, Viktor Vekselberg, rounded out the top five in the loss anti-rating (minus $967 million), although his company is not public. In Russia, he was engaged in the supply of aluminum to the American company Boeing. Probably, the business will have to put an end to it.
The Russian Foreign Ministry can respond to the West, but the problem is that the United States simply will not feel pressure on itself. Especially against the backdrop of the expulsion of diplomats, as more than one country in the world did after the poisoning of former GRU intelligence officer Sergei Skripal and his daughter Yulia.
True, there are branches of subsidiaries of American companies in Russia, but mostly Russians work there. Of course, they can be closed, but this will not change the situation.
Real Consequences
So the Russian ruble fell only in 2014. But now everything depends on the behavior of foreign investors, who own about a third of federal loan bonds (OFZ). If Western business goes out, the rate will definitely fall down. On April 9, the euro rose from 70 to 74 rubles in a day, while the dollar cost more than 60 rubles. On April 10, the situation remained virtually unchanged, but still remains shaky.
Economist Andrey Suzdaltsev told Pravda.Ru how Vladimir Putin will respond to those who "want" the introduction of "all the promised sanctions".
Vladimir Putin said at the Russian Energy Week international forum that "it would be good for Russia if everyone who wants to impose anti-Russian sanctions establishes all possible restrictive measures immediately and as soon as possible." "This would give us a free hand to protect our national interests by such means, which we consider the most effective for us," the president said.
In his opinion, sanctions harm those who impose them, "that is why we have never supported and will not support illegal sanctions that are introduced bypassing the United Nations." Putin stressed that the policy of sanctions pursued by the United States undermines confidence in the dollar as the world's reserve currency, and this is the wrong way. “They actually saw the bough they are sitting on, it’s strange, even surprising,” he remarked. According to the President, this typical mistake any empire.
As he said "Pravda. Ru" Andrey Suzdaltsev, Deputy Dean of the HSE Faculty of World Economy and Politics, our president has always been distinguished by political cunning." According to the expert, Putin "provokes opponents" because "he knows perfectly well that there are people who will not be sanctioned, although they are very susceptible to external influence," and their sanctioning can cause great harm to Russia, noted the expert.
For example, it is possible to ban the sale of Russian energy resources on the foreign market, but the price of oil will immediately jump to $120 per barrel and "it will be an international crisis, they will immediately forget about all the sanctions."
Sanctions, according to the expert, "today are more talk" in the style of Ukraine, which "speaks loudly, but does little": trade with Russia is preserved, railway communication is preserved, Russian investments are growing.
“The fact is that European markets are small. And it seems that Germany and Italy do not have a very large percentage of trade with Russia, but they clearly close a valuable industry that works for Russia, and this is already scrupulous,” Andrey Suzdaltsev explained.
In addition, according to him, they learned how to circumvent sanctions. A striking example is "like Europe, with the help of Alexander Lukashenko, smuggling foodstuffs that are under the embargo to Russia." You can also sanction people, Russian companies and companies working with Russia. But Russian companies are joint-stock companies where there are many Western investors, and the money that Western companies earn goes to competitors. "As you can see, it's a boomerang," Andrey Suzdaltsev remarked.
“Another very important thing is, of course, the policy of import substitution. Yes, sanctions are negative, yes, they are bad, yes, we can’t get loans, we can’t develop our economy because of this, we are limited in loans. But on the other hand, this test for our economy. There is no political decision only positive or only negative. The task of any politician."
Andrey Suzdaltsev believes that all possible options for sanctions have already been analyzed, and finding something effective is "insanely difficult." "The traditional policy towards Russia has come to a natural end, it has simply been exhausted," the economist concluded.
We remind you that the Russian Ministry of Finance was skeptical about sanctions against Russian debt by the United States. As follows from the statement of the Ministry of Finance, such initiatives have been voiced before, but have not been implemented. The department recalled that earlier the US Treasury that the expansion of sanctions and their possible extension to the Russian public debt will cause a negative effect for American investors.
On the other hand, U.S. Assistant Secretary of the Treasury Marshall Billingsley, in a statement to the House Monetary Policy Subcommittee of Representatives, said that "Russia's economy is too large and well integrated into the global economy, the international financial system and worldwide supply chains," therefore to Russia " Sanctions identical to those against Iran and North Korea cannot be applied."
Anti-Russian sanctions were introduced after the escalation of the conflict in the south-east of Ukraine and the holding of a referendum on the status of Crimea. Initially, the United States and the European Union imposed personal sanctions against a number of politicians, banning them from entering their territory and announcing the freezing of their funds (if any) in Western banks.
Gradually, the list of these persons, as well as the types of sanctions and the number of countries that joined them, expanded. Russia responded with its own food counter-sanctions.
Three years later, we can say that everyone has felt the negative consequences of the restrictions - both those who introduced them and those against whom they are directed. “We often repeat like a mantra that the notorious sanctions do not really affect us. They do. And above all, I see a threat in limiting technology transfer,” Vladimir Putin stated last October during the Russia Calling forum. This, by the way, damages not only the Russian economy, but the world economy as a whole, because the Russian economy, of course, is an important sector of the global economy."
At the same time, experts note the positive effect of sanctions on a number of sectors of the economy.
Personal sanctions
Initially, the EU sanctions list included 21 people, the US - 7.
But the lists were constantly expanding and now under sanctions different countries there are 78 federal politicians, officials and military, 29 Crimean and Sevastopol politicians, 16 businessmen and four public figures.
Negative consequences. "The economic and political effect of personal sanctions is negligible. Of course, some may be afraid of falling into such a situation, especially if they connect their future and the future of their children with Europe or the United States through foreign assets. But these are personal stories, the effect is not noticeable across the country," considers Alexei Makarkin, vice president of the Center for Political Technologies.
positive effect. “Individual officials and businessmen can turn their entry into such lists into immunity, additional hardware weight and opportunities. Since he suffered for the national interest, then now you can’t touch him, on the contrary, you need to help,” Makarkin continues. In addition, sanctions contribute to the consolidation and "nationalization" of the elite, which is now increasingly tied to the country, including materially.
Financial sanctions
Negative consequences. The main problem is the ban on lending to Russian banks and companies in Western banks. This has drastically reduced the access of Russian business to "cheap" money. According to PricewaterhouseCoopers, if in 2013 Russian issuers raised $46.4 billion on the Eurobond market alone, in 2015 they raised only about $5 billion.
In European and American banks, it was profitable to refinance without diverting fixed assets to the payment of interest on old loans. As a result, companies could invest them in development. Experts from the Institute for Economic Forecasting (INP) of the Russian Academy of Sciences estimated in 2015 that "the Russian economy is forced to make up for $160-200 billion of missing borrowed resources." That is, this money must either be sought in Asian banks, which cannot be done quickly, or taken from our own working capital. As a result, money that could be spent on business development often goes to pay interest on old loans.
At the same time, the ban on lending to Russian companies also affected European bankers. Experts from the Institute of Economic Forecasting of the Russian Academy of Sciences predicted "the annual losses of European institutions in the amount of $8-10 billion" - we are talking about uncollected interest on unissued loans. A recent study by the Austrian Institute for Economic Research (WIFO), published in Der Standard, confirmed these figures even "overlapping": in 2015 alone, Europeans missed 17 billion euros in benefits.
positive effect. Russian business began to look alternative routes and enter the Asian financial markets, which was often not done before simply because of the habit of taking money from "convenient" Western sources.
For example, in 2015, Gazprom for the first time raised $1.5 billion from a consortium of Chinese banks, and last year agreed with the Bank of China on a loan of 2 billion euros. In early February of this year, US Rusal expressed its intention to place bonds worth 10 billion yuan ($1.5 billion) on the Shanghai Stock Exchange.
Russian companies have proven that they can find strategic investors not only in the US and Europe. An illustrative example is the sale of a 19.5% stake in Rosneft. Many analysts doubted to the last that in conditions when Western investors were forbidden to invest in Rosneft shares, it would find an investor at all. But the shares were bought by the international consortium Glencore and the sovereign wealth fund of Qatar.
Another positive moment: in response to attempts to limit the settlements of a number of banks in the Visa and MasterCard systems, the Mir national payment system was successfully launched in Russia.
Restrictions on the export of equipment and technologies
The United States, the EU and a number of other countries have banned the supply of military and dual-use goods to Russia, any cooperation of their companies with enterprises of the Russian defense industry, the supply of equipment necessary for the development of oil and gas fields on the Arctic shelf and in shale formations (drilling platforms, equipment for horizontal drilling, pumps high pressure etc.).
Negative consequences. The most tangible for the Russian defense industry was the termination of military-technical cooperation with Ukraine.
Deputy Prime Minister Dmitry Rogozin reported that Russia could not complete the construction of a number of ships for the needs of the Navy due to the suspension of supplies of Ukrainian gas turbine units. It is well known that frigates of projects 11356 (a series for Black Sea Fleet) and 22350 (the newest frigate "Admiral Gorshkov") for the Russian Navy. The construction of a number of ships had to be suspended. The same applies to some other types of military equipment.
But the dependence of the defense industry on imported technologies is incommensurably less than in the energy sector. It is on the energy sector that the sanctions will have the most long-term and painful impact, experts at the Institute of Economic Forecasting of the Russian Academy of Sciences say. According to their calculations, a slowdown in the development of new fields, under the most negative scenario, will lead to the fact that "by 2030 the volume of oil produced may be reduced by 15%."
Meanwhile, the Western economy is also suffering greatly from the embargo on the supply of equipment. " If we look at oil drilling and cooperation in this area, because of the sanctions, machines and equipment worth several billion euros remain unsold there," Henrik Hololei, Deputy Secretary General of the European Commission, said in an interview with Postimees.
In addition, if oil production in Russia really declines, this will push prices up and "with the current volumes of oil and gas consumption in the EU, this factor may lead to additional losses of $3 billion per year," the INP RAS experts note.
Thus, the early lifting of sanctions in the energy sector is beneficial to both parties.
positive effect. Problems with imported, and, above all, Ukrainian components have sharply accelerated the implementation of the import substitution program in the military sphere. According to Dmitry Rogozin, within the framework of this program, production is being launched in Russia for 186 items that were previously produced in Ukraine.
According to the Ministry of Defense of the Russian Federation, by the end of 2016, the enterprises of the Russian defense industry have fulfilled the plan for "Ukrainian" import substitution by 70-80%, and this figure will reach 100% in 2018.
Thus, the Rybinsk NPO Saturn will begin deliveries of gas turbine engines for warships in late 2017 - early 2018.
Another example is the engines for helicopters, which were supplied to us by the Zaporozhye plant "Motor-Sich". “These engines were created at the Klimov Design Bureau in St. Petersburg, then the design documentation was transferred to Zaporozhye, and mass production was established there. Now a serial plant has been built near St. Petersburg to produce such engines and, although it cannot yet completely replace Motor- Sich, "the need for engines for our combat helicopters still manages to be compensated," says TASS military observer Viktor Litovkin
It is envisaged to produce in Russia about 300-320 engines per year for Mi-28, Ka-52, Mi-35, Mi-17 and Ka-32 helicopters. 250 of them are intended for the Ministry of Defense of the Russian Federation, the rest - for foreign customers.
Problems with import substitution were also resolved at the Tactical Missiles Corporation (KTRV), the main manufacturer of Russian aircraft missiles.
“For example, there are air-to-air missiles that were designed at the Vympel State Design Bureau, and some components were Ukrainian-made. We created a new missile, its export version is called RVV-MD, on a completely domestic element base,” the head notes. KTRV Boris Obnosov.
He noted that there was a similar problem with the Kh-35E anti-ship missile. Today, a new Kh-35UE missile with an extended range has been created, equipped with a Russian engine manufactured by NPO Saturn.
Food counter-sanctions from Russia
essence of the sanctions. In 2014, Russia imposed an embargo on deliveries to the country for "certain types of agricultural products, raw materials and food, the country of origin of which is the state that has decided to impose economic sanctions against Russia." The list includes meat and dairy products, vegetables, fruits, nuts, etc.
Negative consequences. At first, counter-sanctions contributed to the growth of inflation on food products. As a result, this was one of the factors that, for the first time in many years, double-digit inflation was recorded in the country - 11.4% in 2014, and in 2015 it was 12.9%.
The problem of product quality has become a little more acute. So, in 2015, the head of Rosselkhoznadzor Sergey Dankvert reported that the share of falsified dairy products (using vegetable fats) in Russia was 11%, and among some types of products - up to 50%.
However, Russian sanctions had the main negative effect on European agricultural producers. In 2015 alone, the export of food products from the EU countries to Russia decreased by 29%, European producers lost 2.2 billion euros in profits, and 130,000 jobs were at risk.
positive effect. "Positive effect (from the introduction of counter-sanctions. - Prim TASS), of course, there is,” says Andrey Danilenko, head of the committee on agro-industrial policy of the Delovaya Rossiya association, to TASS. - There are details, nuances, but in general, import substitution worked. Today we are one of the largest exporters of grain, we are largely self-sufficient in meat and milk."
According to the National Meat Association (NMA), Russia's self-sufficiency in poultry meat is currently almost 100%, in pork - 90%, in beef - 65%. The Cabinet of Ministers, in turn, believes that Russia provides itself with milk by 75%. Danilenko notes that "in terms of milk production costs, Russia is more competitive than the EU, the US and South America," but the industry is hampered by the high cost of loans.
To date, the impact of food sanctions on inflation has also been minimized. At the end of 2016, it amounted to only 5.4%.
against our country. They were personally introduced by Donald Trump. Sanctions will affect the ban on supplies from America high technology- electronics, lasers, sensors and other complex equipment. Including for the sphere of oil and gas processing.
Meanwhile, leading US senators have submitted to Congress a bill on a new package of sanctions that could be introduced in 90 days if Russia does not fulfill a number of conditions. The conditions, as our Foreign Ministry has already stated, are unfeasible. New sanctions have already rushed to be called “crushing”, “hellish” and “draconian”. For example, Russian state-owned banks may be left without foreign currency accounts in the United States. Almost no one doubts that in the current situation in the US Congress, the law regarding additional sanctions will be adopted before the end of the year and will begin to be implemented from January 1, 2019.
To the question of technology
The sanctions that have just been introduced are rather demonstrative in nature and are more designed for impressionable investors who should start selling Russian stocks, bonds and flee the ruble, - says Elena Larina, Analyst at the Institute for System-Strategic Analysis. - Serious are only measures related to the further restriction of technological exports to Russia. This can especially affect the aviation industry. The Americans are not limited to banning their own enterprises from delivering to our country. At the same time, they put the question squarely before all exporters. Choose: either American or Russian market.
In addition, the new package of sanctions is aimed at a complete ban on the supply of technology to the oil and gas complex of our economy. And in our gas and oil production, American and German technologies are actively used. There is nothing to replace them in Russia. And it is still unclear how our IT industry will act in this case, since it has a lot of American components. Not only computers, but also network equipment, including routers, Wi-Fi hotspots, video surveillance systems, servers, and more...
However, I believe there will be no ban on the export of all American goods to Russia. In any case, soon.
Problems with banks
A possible ban on operations with state-owned banks of the Russian Federation, envisaged at the second stage, looks much more serious.
- They are afraid that Russia will be completely disconnected from the SWIFT system!
Nothing of the sort is envisaged either in the sanctions just imposed by Trump or in the new sanctions package submitted to Congress. There, the most serious proposal is to introduce a ban on transactions with American currency of the largest state-owned Russian banks, including Sberbank, VTB, VEB and Promsvyazbank. The point is the following. Any bank in the world, including Russian ones, can carry out any dollar transaction only through correspondent accounts of American banks. And the introduction of such a measure will lead to the fact that the largest Russian banks will not be able to conduct any transactions with dollars - both with individuals and with legal entities. In Russian business circles, it is precisely such a ban that is most feared.
It's all about American oil
- It is clear that the version about poisoning of the Skripals Russia is only a formal reason for strengthening sanctions . What is really behind this story?
You have to understand that there are very important mid-term elections in America in November. In principle, Americans are still satisfied with Trump from the point of view of the economy. But the Republican Party is in a bad pre-election business. Republicans - senators and congressmen - in no case want the impeachment of a president of the same party. But they will spread rot against Russia with sanctions along with their Democratic competitors.
- For what?
Trump is a businessman. He makes politics like a business. He came to the presidency thanks to a coalition of Wall Street bankers and oilmen. They formed the core of Trump's elite support. Accordingly, in his policy, he primarily expresses the interests of the US oil and gas complex.
Therefore, perhaps the most important factor in the round of sanctions, in my opinion, is the unprecedented growth in hydrocarbon production in America. Obama, as a representative of the new IT-economy with an ecological outlook, kept an embargo on domestic oil and gas production and categorically prohibited their export.
The first thing Trump did when he came to The White house, - lifted the embargo. And defiantly withdrew from the Paris Climate Protocol, initiated by the same Obama. Fulfilled campaign promises to the oilmen who supported him. The construction of internal oil and gas pipelines and new plants and ports for the export of oil and liquefied gas is already being completed. The main markets are Western Europe, China and partly Japan. Now these markets are fully provided with oil and gas. In order for American fuel to enter these markets, someone needs to be thrown out of there. These "someone" are Iran and Russia.
Severe sanctions are now being introduced against them under various pretexts.
- How do you see the future of Russian-American relations? Will the sanctions pressure end?
Unfortunately no. There is a consensus in the American establishment regarding Russia. The pressure will slowly but steadily build up. This does not at all cancel the summit meetings, Trump's speeches about the desirability of normal and even friendly relations with Russia. In America, the president is not omnipotent. Especially on those issues on which there is a consensus among the elite. Therefore, for the sake of his own political survival, despite all the words, he will actually follow the sanctions course.
- What to do?
Stop saving on education, healthcare, science. Political will is needed to turn our developments (and they are!) into working technologies. And without this, it will be difficult to survive in a tough time of sanctions.
For big political games we can not influence, but on our own savings - completely. Let's find out...