Bottom Line: Three stocks that stand to lose big from the escalating market chaos
1 BP
THE MOST exposed to Russia of the FTSE’s energy majors slumped 2.28 per cent yesterday despite a similar rise in the cost of brent crude. A hotly contested deal in 2012 saw BP take on a 19.75 per cent stake in Russian state-owned oil company Rosneft – whose shares dropped 4.1 per cent in Moscow yesterday – in return for its half of the TNK-BP joint venture. With $4bn wiped off the value of Rosneft in a single day, BP’s stake is now worth around $800m less than it was on Friday. Investors are right to be spooked – Rosneft contributed 35 per cent of BP’s underlying profit last quarter.
2 SHELL
BP’s FTSE 100 peer has huge exposure to both Ukraine and Russia. As well as a huge stake in the Sakhalin-2 project off Russia’s far east coast and a joint drilling project in Siberia with Russia’s Gazprom, it also signed a $10bn shale exploration deal with Ukraine’s government last year to drill in the Yuviska field. That government no longer exists, putting the country’s energy security – and Shell’s drilling plans – in severe doubt.
3 LENTA
IT ONLY listed its depositary receipts in London on Friday, but Russian hypermarket group Lenta plunged 14.5 per cent yesterday – souring the waters for the slew of Russian retail flotations that were expected to follow it, including German peer Metro which is looking to list a stake in its Russian wholesale business. Recently listed stocks can be volatile at the best of times – the last thing Lenta needs is investors spooked by political unrest.