How Trump led the Russian capital market to collapse

We usually do not pay much attention to capital markets in Russia, but the movements of the past few hours seem to be quite interesting, both technically and fundamentally.

Just a few hours ago, Russian companies felt great against a pogrom in the rest of the world. Technically, the Russian benchmark RTSI was moving in a strong upward trend without any signs of ending. If we look objectively at the emerging situation between China and the US, it is likely that Russia would be one of the winners. Well, no, Trump did not allow this to happen. One thing is certain, RTSI collapses. Only for today, the decline was 11.44%, while at the Sell Off-index the index reached -12.04%.

You are probably wondering how Trump influences the Russian markets? The real US president has only a few levers to influence the Russian economy, but today he hit the target right. On Friday, Trump presented an interesting list of sanctions against Russian oligarchs, owners of many of the companies in Russia. 7 Turkish entrepreneurs, 12 companies and 17 high-ranking politicians fall under the firing of Trump. Needless to say, much of the exports of these companies are to the US and Europe.

Let's look at the details.

The most loser is Oleg Deripaska, who today forged $957m. The White House blacklist includes Sulejman Karimov (-$244m), Victor Veskeler (-$41m). Igor Rothenberg and Kiril Shamalov are also honored to be on the list, but at the moment their companies remain stable due to the fact that exports to the US are minimal.

Why did Deripaska lose that amount for only a few hours? The state of the Russian businessman is $6.7 billion, and he owns And Plus, a company that owns the world's top non-ferrous metal producers - Russal and Nornikel. Interestingly, against the backdrop of the scandal, companies that are doing business with Deripaska today are also downsizing. The Russian oligarch supplies much of Aluminum used by Volkswagen, and Glencore, which markets raw materials, will probably have to shut down supplies to the United States. "Rusal" is one of the largest aluminum producers in the world and the company owns mines in Italy, Ireland, Sweden, Nigeria, Guinea and Guyana. A large share of Quinsland Alumina Ltd. - the face of the aluminum industry in the world is also part of Deripaska's company. For its part, Nornikel owns mines in South Africa, Finland and Australia. Here, it is convenient to specify that nickel metal hydride batteries have better times than conventional Li-ion batteries used in electric vehicles.

Deripaska is also regularly detected in the Kremlin. The fact is that the oligarch invests a considerable amount of money in the infrastructure for the Sochi Winter Olympics four years ago. Another interesting fact is that Deripaska is doing business in the early 21st century with Paul Mannorth, Donald Trump, head of the Losta's election campaign in the current story.

Source: Bloomberg Pro Terminal

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