Financial services continues to consider the repercussions from the Russian invasion of Ukraine.
While nothing matches Ukrainian suffering, some of the warnings are rather stark.
Schroders says that the Ukraine crisis poses a real risk of global food shortages – perhaps an under-appreciated aspect of the invasion, as Investment Week reports.
Felix Odey, Alexander Monk and Mark Lacey say in a note that many investors have been focusing on Russia's role as a key supplier of global oil and gas, but points out that Russia and Ukraine account for approximately 30% of the world's wheat exports.
The FCA has noted ‘significant challenges’ to selling Russian assets as Chancellor Rishi Sunak calls on UK investors to pull funds from the country.
It msy be interesting to see whether Russian investments, business presence and exposure leads to long term losses if the conflict is resolved.
As London Financial News notes many asset managers and pension providers have written down any Russian assets already held to zero, and some have announced that they are intending to divest themselves of such assets when it is practical to do so.
However, the FCA has also reminded firms that they still had to apply its sanctions guidance when they sell their holdings.
BlackRock has marked down $17bn of Russian investments potentially to nothing according to the FT.
It is important to remember that the giant fund manager manages around $3trillion so it may reflect its size as much as particular exposure.
Quilter Investors has barred third-party managers from investing in Russia or Belarus on the firm’s range of sub-advised funds.
That is probably wise as speculation is growing that Russia and Belarus could default on its bonds. The IMF says it no longer views Russian default as an improbable event, according to Bloomberg.
Capital.com looks at many well known Austrian, Dutch, French, Italian and Swiss banks nursing potential losses of several billions.
Austrian bank Raiffeisen International Bank has a very high exposure explained by it being a top ten bank in Russia but that may be one to keep an eye on.
