04-03-2014, 05:35 PM (This post was last modified: 04-03-2014, 05:39 PM by orangetea.)
Market Vectors Russia ETF (RSX)
Tuesday, March 4: Russian ETFs plunged yesterday as stocks and bonds in the country declined and the rouble hit a record low against the dollar due to geopolitical tension in Ukraine. The Market Vectors Russia ETF (NYSEArca:RSX) ended the day 6.80 percent lower at $22.76, taking its year-to-date loss to 21.16 percent.
The total market capitalization of all companies in the Russian MICEX stock index has fallen by about $60 billion (₤36 billion) since Friday. Today Russian equities regained some ground after the Interfax news agency reported that president Vladimir Putin had ordered troops “involved in military exercises” to return to their bases. There was no further detail on which troops were being withdrawn or from where.
Russians will not be much affected by freezing of these assets, they are net energy exporter, net arms exporter (technology), they have gold diamond titanium bauxite all sorts of industrial raw materials that the world needs, a fifth of the world's timber is in siberia.
Politicians playing games lah they have to show they hit back somehow.
only US is frozen but other country not freeze and is not like what they tried to do to Iran previously where they tried get global consensus to freeze and stop everything and even then also cannot do it for long because it ping pong back to them later and they felt the pinch.
The Iranians circumvented those sanctions by doing business with the world via india, like that also can, the russians will be much cleverer than the iranians.
trade sanction is not the same as freezing asset. You can work around trade sanction and be careful it doesn't fall into the web but hard to move assets offshore US fast enough.
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward
Putin Not Backing Down on Ukraine Crisis Despite Obama Call
COLLAPSE STORY
Russia's President Vladimir Putin stuck to his position on the escalating crisis in Ukraine, saying Moscow must not ignore calls for help from Russian speakers in that country.
During a one-hour call with President Barack Obama on Thursday, Putin said that Ukraine’s government came to power as the result of an “unconstitutional coup” and was “imposing entirely illegitimate decision onto Crimea and the eastern and southeastern regions of Ukraine,” according to a statement on the Kremlin’s website.
things tend to be cheap for a reason...
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Putin’s Push Shorted in ETF Market as Cheap Get Cheaper
By Halia Pavliva and Julia Leite
March 07, 2014 6:53 PM EST 1 Comments
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Short wagers on Russian stocks are soaring in the exchange-traded funds market after President Vladimir Putin’s incursion into Ukraine sparked the worst weekly selloff since May 2012.
Short bets on the Market Vectors Russia ETF rose 17 percent this week through March 6 to the highest in almost a year while total assets in U.S.-based exchange-traded funds investing in Russian equities increased 17 percent, according to data compiled by Bloomberg. The benchmark Micex Index (INDEXCF) dropped 7.3 percent in the week, the most since Putin cracked down on Moscow protests following his election in May 2012.
The surge in short bets shows investors are bracing for further declines as Putin defies the West’s calls to pull back from Crimea. Russian stocks are the cheapest in emerging markets as Putin’s seizure of companies, jailing of dissidents and support of Syria in recent years has eroded investor confidence in the world’s ninth-biggest economy.
“People buy Russian ETFs to create shares for shorting,” Dave Lutz, the head of ETF trading and strategy at Stifel Nicolaus & Co. in Baltimore said March 7. “The crisis is not over yet. We are waiting to see if President Putin will be satisfied with just Crimea or will he want to annex all of Ukraine. It is very possible that things will get worse before they get better.”
The Micex Index has dropped 11 percent this year, sending valuations to 4.8 times estimated earnings. That’s about a third of the 14-multiple of India’s S&P BSE Sensex Index. (SENSEX) Brazil’s Ibovespa trades at 9 times and China’s Shanghai Composite Index (SHCOMP) is valued at 8 times.
A short sale is one in which stock is borrowed and sold, with the hope of profit by repurchasing the shares later at a lower price.
‘Disastrous Outcome,’
“There could be a disastrous outcome,” said Timothy Ghriskey, chief investment officer at Solaris Asset Management LLC in New York, which manages about $1.5 billion in assets. “It may get worse before it gets better.”
President Barack Obama said the U.S. and its allies will keep raising pressure on Russia to back down in Ukraine and held open the possibility of further sanctions if Putin’s government doesn’t respond.
OAO Gazprom (OGZPY), Russia’s biggest company, may cut gas supplies to Ukraine, after the country’s natural gas debt climbed to almost $2 billion, Chief Executive Officer Alexey Miller said in a March 7 statement. Gazprom halted gas flows to Ukraine in 2006 and 2009 amid disputes over prices and volumes, leading to shortages throughout Europe.
Mikhail Khodorkovsky
Bearish investors have piled into bets against the Market Vectors Russia ETF (RSX), pushing shares borrowed for short sales to 6.7 million on March 6, the most in almost a year and up from 3.3 million at the end of January, according to Markit, a London-based provider of financial information services
The Bloomberg Russia-US Equity Index of the most-traded Russian equities in the U.S. fell 6.5 percent to 82.62 this week. RTS stock-index futures declined 1.3 percent to 113,540 in U.S. hours.
While Putin freed former Yukos Oil Co. owner Mikhail Khodorkovsky in December after 10 years in jail and invested $43 billion in the Sochi Olympic games to showcase the reforms taking place in Russia’s economy, his decision to mobilize the army into the Black Sea peninsula is undermining investor confidence.
Last year, as U.S. officials worked to convince the world that Bashar al-Assad’s regime used chemical weapons in Syria, Russia has made clear it would veto the United Nations resolution authorizing force against the regime. Secretary of State John Kerry warned Russia Feb. 17 to stop supplying weapons to Assad, saying the support was hampering peace talks aimed at ending three years of fighting.
‘So Cheap’
The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund tracking companies from Gazprom OAO (GAZP) to OAO Lukoil, sank 5.5 percent to $23.09 this week. It has slumped 17 percent this year.
“We’ve looked at Russia for a while just because the equity market has looked so cheap,” Sameer Samana, the St. Louis-based international strategist at Wells Fargo Advisors LLC, said by phone on March 3. His firm oversees about $1.4 trillion. “But as often is the case, things tend to be cheap for a reason, and a lot of investors are realizing why Russia was looking as inexpensive as it was. A lot of times, valuation doesn’t discount the political risk until it surfaces.”
March 7 (Bloomberg) -- Bloomberg’s Eric Balchunas and Tom Keene discuss investing in Russia on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)
Warning shots fired to turn monitors back from Crimea
Published: Sunday, 9 Mar 2014 | 1:10 AM ET
Shots were fired in Crimea to warn off an unarmed international team of monitors and at a Ukrainian observation plane, as the standoff between occupying Russian forces and besieged Ukrainian troops intensified.
Russia's seizure of the Black Sea peninsula, which began 10 days ago, has so far been bloodless, but its forces have become increasingly aggressive towards Ukrainian troops, who are trapped in bases and have offered no resistance.
President Vladimir Putin declared a week ago that Russia had the right to invade Ukraine to protect Russian citizens, and his parliament has voted to change the law to make it easier to annex territory inhabited by Russian speakers.
Tempers have grown hotter in the last two days, since the region's pro-Moscow leadership declared it part of Russia and announced a March 16 referendum to confirm it.
The worst face-off with Moscow since the Cold War has left the West scrambling for a response. U.S. Secretary of State John Kerry, speaking to Russia's foreign minister for the fourth day in a row, told Sergei Lavrov that annexing Crimea "would close any available space for diplomacy," a U.S. official said.
President Barack Obama spoke by phone to the leaders of France, Britain and Italy and three ex-Soviet Baltic states that have joined NATO. He assured Latvia, Lithuania and Estonia, which have their own ethnic Russian populations, that the Western military alliance would protect them if necessary.
A spokeswoman for the Organization for Security and Cooperation in Europe said no one was hurt when shots were fired to turn back its mission of more than 40 unarmed observers, who have been invited by Kiev but lack permission from Crimea's pro-Russian authorities to cross the isthmus to the peninsula.
They had been turned back twice before, but this was the first time shots were fired.
Ukraine's border guards said an unarmed observation plane took rifle fire flying 1,000 metres over the regional border.
Hackers targeted Kiev's security council with a denial of service attack designed to cripple its computers, the council said. The national news agency was also hit. Russia used similar cyber tactics during its war against Georgia in 2008.
Crimea's pro-Moscow authorities have ordered all remaining Ukrainian troop detachments in the province to disarm and surrender, but at several locations they have refused to yield.
Moscow denies that the Russian-speaking troops in Crimea are under its command, an assertion Washington dismisses as "Putin's fiction". Although they wear no insignia, the troops drive vehicles with Russian military plates.
A Reuters reporting team filmed a convoy of hundreds of Russian troops in about 50 troop trucks, accompanied by armoured vehicles and ambulances, which pulled into a military base north of Simferopol in broad daylight on Saturday.
'Situation has changed'
The military standoff has remained bloodless, but troops on both sides spoke of increased agitation.
"The situation is changed. Tensions are much higher now. You have to go. You can't film here," said a Russian soldier carrying a heavy machinegun, his face covered except for his eyes, at a Ukrainian navy base in Novoozernoye.
About 100 armed Russians are keeping watch over the Ukrainians at the base, where a Russian ship has been scuttled at the harbour's entrance to keep the Ukrainians from sailing out with three ships of their navy.
"Things are difficult and the atmosphere has got worse. The Russians threaten us when we go and get food supplies and point their guns at us," said Vadim Filipenko, the Ukrainian deputy commander at the base.
A source in Ukraine's defence ministry said it was mobilising some of its military hardware for a planned exercise, Interfax news agency reported.
Ukraine's military, with barely 130,000 troops, would be no match for Russia's. So far Kiev has held back from any action that might provoke a response.
Overnight, Russian troops drove a truck into a missile defence post in Sevastopol, the home of both their Black Sea Fleet and the Ukrainian navy, and took control of it. A Reuters reporting team at the scene said no one was hurt.
Ukraine's border service said Russian troops had also seized a border guard outpost in the east of the peninsula overnight, kicking the Ukrainian officers and their families out of their apartments in the middle of the night.
Polish Foreign Minister Radoslaw Sikorski said on Saturday Poland had evacuated its consulate in Sevastopol due to "continuing disturbances by Russian forces".
The United States has announced sanctions against individuals it accuses of interfering with Ukrainian territorial integrity, although it has yet to publish the list. Washington has threatened wider action to isolate the Russian economy.
The European Union is also considering sanctions, but has so far been more cautious. Any action would be much harder to organise for a 28-nation bloc that takes decisions unanimously, many of whose members depend on Russian natural gas.
Ukraine's ambassador to Russia held a "frank" meeting with a deputy Russian foreign minister, Moscow said, giving no details.
Pro-Moscow Crimea leader Sergei Aksyonov said the referendum on union with Russia - due in a week - would not be stopped. It had been called so quickly to avert "provocation", he said.
'Many hotheads'
"There are many hotheads who are trying to create a destabilized situation in the autonomous republic of Crimea, and because the life and safety of our citizens is the most valuable thing, we have decided to curtail the duration of the referendum and hold it as soon as possible," he told Russian television.
Aksyonov, whose openly separatist Russian Unity party received just four percent of the vote in Crimea's last parliamentary election, declared himself provincial leader 10 days ago after armed Russians seized the parliament building.
Crimean opposition parliamentarians say most lawmakers were barred from the besieged building, both for the vote that installed Aksyonov and another a week later that declared Crimea part of Russia, and the results were falsified. Both votes took place behind closed doors.
Crimea has a narrow ethnic Russian majority, but it is far from clear that most residents want to be ruled from Moscow. When last asked in 1991, they voted narrowly for independence along with the rest of Ukraine. Western countries dismiss the upcoming referendum as illegal and likely to be falsified.
Many in the region do feel deep hostility to Kiev, and since Aksyonov took power supporters of union with Moscow have controlled the streets, waving Russian flags and chanting "Rossiya! Rossiya!"
Nevertheless, many still quietly speak of their alarm at the Russian takeover: "With all these soldiers here, it is like we are living in a zoo," said Tatyana, 41, an ethnic Russian. "Everyone fully understands this is an occupation."
The region's 2 million population includes more than 250,000 indigenous Tatars, who have returned only since the 1980s after being deported en masse to distant Uzbekistan by Stalin. They are fiercely opposed to Russian annexation.
The referendum is "completely illegitimate. It has no legal basis", Crimean Tatar leader Refat Chubarev told Germany's Suddeutsche Zeitung newspaper.
As tempers have hardened, journalists have been beaten by hostile pro-Russian crowds. The Associated Press said armed men had confiscated TV equipment from one of its crews.
In addition to the Russian troops, the province is prowled by roving bands of "self-defence" forces and Cossacks in fur hats armed with whips, bused in from southern Russia.
In Crimea, Russian television and the provincial channel controlled by Aksyonov broadcast wildly exaggerated accounts of "fascists" in control of the streets in Kiev and of plans by Ukraine to ban the Russian language. Ukrainian television and the region's only independent station have been switched off.
Putin launched the operation to seize Crimea within days of Ukraine's pro-Russian President Viktor Yanukovich's flight from the country. Yanukovich was toppled after three months of demonstrations against a decision to spurn a free trade deal with the European Union for closer ties with Russia.
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