The morning after U.S President Barack Obama announced increased sanctions against Russia for what Washington calls inaction in Moscow regarding deescalation of the Ukraine crisis, shares for Rosneft dropped over 5% on the MICEX Moscow Stock Exchange, while Novatek shares tumbled nearly 7%. The sanctions targeted the two companies along with a slew of other important interests in Russia, including Gazprombank and Vneshekonombank.
The Moscow Interbank Currency Exchange (MICEX) index overall fell 2.5% as the market opened, down to 1,437 points. The RTS index fell 3.3% to 1,305 points. Meanwhile, the dollar rose 34 copecks to 34.73 roubles and the Euro rose 57 copecks to 47 roubles.
United States authorities widened sanctions against Russia late in the evening of July 16. Besides energy companies and state banks, the list included several enterprises in Russia’s military-industrial complex such as Uralvagonzavod and the Kalashnikov concern.
Under the new sanctions, Rosneft, Novatek, Gazprombank and Vneshekonombank will be limited in their access to long-term financing; organizations in the United States will be barred from extending credit to these Russian companies for terms exceeding 90 days.
Copyright, Slon, 2014