![]() The difficulty is compounded by a lack of liquidity. Pension funds are also trying to work out what to do. JPMorgan Asset Management suspended its JPM Emerging Europe Equity fund on Monday, a source familiar with the matter said. Top asset manager BlackRock Inc (BLK.N) is consulting with regulators, index providers and other market participants "to help ensure our clients can exit their positions in Russian securities" where allowed. Foreign funds held 86% of Russian stock market free float as of end-2021, according to Moscow Exchange data.Ī number of funds have said they want to exit their positions - or help clients sell. That also affected U.S.-based trading of VTB GDRs.įoreign investors had nearly $20 billion invested in Russian Eurobonds and $31 billion in OFZ government bonds. The LSE said it cut off trading in VTB after the Bank of New York Mellon resigned as the depositary for the shares. ![]() London-listed shares in Sberbank erased nearly all their value after the London Stock Exchange suspended trading in the global depository receipts (GDRs) of VTB, another sanctioned Russian bank. EST, versus a 30-day average of just under 3 million shares. In the over-the-counter markets, ADRs of Sberbank were still trading, according to OTC Markets Group, which showed that more than 20 million of the sanctioned Russian bank's ADR shares had been traded by 2 p.m. ![]() "Being able to actually move those immobilized ordinary shares is just really, really difficult," Karolyi said. JPM did not immediately respond to a request for comment, Citi did not immediately provide a comment, and BNY declined comment. Karolyi said the way to offload those securities "would be to work through the depository banks that have issued these receipts," pointing to intermediaries like JPMorgan (JPM.N), Bank of New York Mellon (BK.N) and Citigroup (C.N), to cancel the receipts toward owning the ordinary shares that underlie them. "It’s a real problem for investors to be able to somehow unwind their exposures," said Andrew Karolyi, a professor of finance at Cornell University, who said that Russia in general was a very difficult market to access for global investors, which is why using American depository receipts had been an important vehicle.
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