Russian President Vladimir Putin recently signed a decree that orders the removal of all Russian stocks overseas amid global financial uncertainty due to its invasion of Ukraine, a move that would deal a huge blow to the country's billionaires.
The list of individuals who will be severely affected by the order is Vladimir Potanin, who is considered the richest man in Russia. He and other billionaires will not have to adjust the ownership structure of their specific businesses due to the decree.
Russia's Overseas Stocks
Putin's newest order means that Russian billionaires who have ownership of companies that are listed abroad will not be able to collect foreign-currency dividends from the depository receipts. Also, the decree requires the ceasing of trading of depositary receipts on foreign exchanges in the coming days.
However, the New York Stock Exchange, Nasdaq, London Stock Exchange, and other top international bourses had already frozen Russian stocks. Their decision came after President Putin decided to invade Ukraine over alleged "security issues," as per Yahoo Finance.
Russia's war on Ukraine has had significant impacts on various nations and economies, including the pan-European Stoxx 600 which slid 0.7% by the end of a trade. The insurance sector is leading the losses and energy stocks are eking out some slim gains.
Swiss technology company Temenos gained 7% while at the bottom of the European blue-chip index, in terms of an individual share price movement while Swiss Re fell 7.6%. Investors worldwide are monitoring the situation in Ukraine very closely after the nation's military said on Monday that a long-expected offensive push into the Donbas region began.
According to CNBC, the attacks include intensified assaults in the Slobozhansky and Donetsk operational districts in the northern and eastern parts of the country. The World Bank lowered its global growth forecast for 2022 by nearly a full percentage point from 4.1% to 3.2% because the invasion of Ukraine showed no signs of ending soon.
Global Financial Situation
On Tuesday, Britain said that it planned to revoke the Moscow Stock Exchange's (MOEX) status as a recognized stock exchange in response to the country's invasion of its European neighbor. The move is expected to remove some tax relief for new investors.
Britain and other Western allies are currently looking for new ways to increase pressure on Russia after its unprovoked war on Ukraine. Authorities have collectively targeted wealthy elites and key industries and tried to cut off access to the international financial system.
In a statement, Britain's Financial Secretary to the Treasury, Lucy Frazer, said that revoking Moscow Stock Exchange's recognized status sent a clear message. The official said that there was no case for new investments in Russia.
On Tuesday, British Prime Minister Boris Johnson and United States President Joe Biden are scheduled to hold a call with other world leaders to discuss further sanctions against Russia. Britain grants recognized status to some exchanges, which would allow the securities traded on them to benefit from specific tax relief. While current investments that are done through MOEX will remain unaffected, there is no possibility for new ones to benefit once the status is revoked, Reuters reported.
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