Shares in major London-listed Russian firms plunged this morning after Vladimir Putin launched a full-scale invasion of Ukraine and Boris Johnson threatened to “hobble” Russia with sanctions in retaliation.
A number of major Russian financial and energy giants have used the London Stock Exchange as destinations for ‘secondary listings’ in addition to their primary listing in Moscow, including state-backed oil and gas producers Rosneft and Gazprom, and state-run banks VTB and Sberbank.
London-listed shares in state-owned Russian bank Sberbank, which is expected to be slapped with sanctions by Western, plunged more than 66 per cent today.
Russia’s largest lender looked to shrug off the threat of sanctions and settle investor concerns in a statement today, claiming it was ready for any measures.
“We are prepared for any development of the situation and have worked through scenarios for guaranteeing that our customers funds, assets and interests are protected, and also that our functions are fully operational,” Sberbank said on Thursday.
State-backed lender VTB similarly looked to play down the disruption of sanctions and said its branches, ATMs and online services were functioning normally.
VTB’s London-listed shares fell by more 29 per cent amid a wider rout in the markets.
Meanwhile Gazprom’s London shares fell nearly 29 per cent, while oil giant Rosneft saw its London share price plunge more than 37 per cent.
The London listed firms are a major source of tax revenue for the Russian government, and Downing Street is expected to hit the firms with firm sanctions.
London-listed Russian oil, gas and mining companies paid their government £39bn in taxes in 2020, according to a Guardian analysis of payments to government disclosures.
Boris Johnson said in a speech today: “Today in concert with our allies we will agree a massive package of economic sanctions designed in time to hobble the Russian economy.
“Diplomatically, politically, economically, and eventually, militarily, this hideous and barbaric venture of Vladimir Putin must end in failure.”
Shares in multinational steel giant Evraz, which is headquartered in London but has operations primarily in Russia, also plunged more than 31 per cent this morning as volatility hit the markets.
Evraz, in which Chelasea-owner Roman Abramovich holds a near 29 per cent stake, has now plunged more than 65 per cent in the past month.
Abramovich reportedly saw his net worth plummet more than £500m in a single day this month after an investor exodus from the steel firm.