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Amid talks between the US and Russia, international investors have begun to actively buy up assets related to Russia, despite the fact that hundreds of billions of dollars of Russian assets remain frozen due to US sanctions. According to Bloomberg, investors are finding ways to circumvent the restrictions through alternative markets, such as Hong Kong, Vienna and Budapest, and are also buying the currency of Russia’s key trading partners.
Sharp growth of Russian assets on international exchanges
According to the agency, February saw a significant increase in the value of companies linked to Russia. Rusal’s shares on the Hong Kong Stock Exchange rose by 75 per cent. The share price of the Austrian Raiffeisen bank, which has a subsidiary in Moscow, rose by 35 per cent. The shares of the Hungarian OTP Bank, which continues to operate in Russia, have added 11 per cent since the beginning of the year.
Strong demand is also evident in foreign exchange markets. In Kazakhstan, which is one of Russia’s key trading partners, the national currency, the tenge, strengthened by 4 per cent, one of the largest gains among global currencies this month.
Will sanctions be lifted
Growing interest in Russian assets is driven by expectations that negotiations between the US and Russia could lead to a softening or partial lifting of sanctions. As US President Donald Trump tries to push for a deal to end the war in Ukraine, speculation is rife that investors may be able to resume access to the Russian market.
Grigory Marinichev, a partner at Morgan, Lewis & Bockius, told Bloomberg that hedge funds, family offices and private investors are interested in Russian assets. He noted that they want to be the first to trade, but so far they are only advised to follow the news closely.
Analysts note that it is unclear how quickly the sanctions can be lifted. Some restrictions are enshrined in US law, and their cancellation will require Congressional approval. In addition, the question of European sanctions remains open, and they are likely to remain in place.
