Rosneft Oil, VTB Bank: Stocks that may get hit by Russia-Ukraine crisis

Highlights

• The US and the European governments may act against Moscow through economic sanctions if Russia-Ukraine intensifies.
• At present, over 30 Russian companies have secondary listings on the LSE.
• In 2020, around £39 billion in taxes was paid by the London-listed Russian companies to their government.

As the Russia-Ukraine’s crisis is intensifying, the US and the European governments may act against Moscow through economic sanctions, as per media reports. According to latest updates, US President Joe Biden will go ahead and discuss the crisis with Russian premier Vladimir Putin in the coming days only if Moscow does not invade Ukraine.

Washington and other Western capitals are against the Russian invasion and have been trying to look for negotiations. Most countries have said that the Putin government is all set for a full-scale strike with its troops waiting at Ukraine's borders.

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The attack will make Russian companies vulnerable to harsh economic restrictions that might be imposed by the Western countries and the US. Among all countries striking back, the UK government has a stronger position as many big state-run and independent Russian companies have secondary listings on the London Stock Exchange (LSE). Recently, foreign secretary Liz Truss said that Russia may face the toughest sanctions regime from the UK ever.

At present, over 30 Russian companies are publicly trading on the LSE. As per S&P Global, the total market value of these companies stands at around £468 billion, and the largest companies based on market capitalisation include PJSC Gazprom, Sberbank, and Rosneft Oil.

These companies play a significant role in the Russian economy and partially finance the Russian state. The London-listed companies belong to key sectors like energy, finance, and mining, and have strategic and economic significance for the country. Thus, the Russian government would potentially have to rethink its move against Ukraine to safeguard its own interests.

In 2020, around £39 billion in taxes was paid by the London-listed Russian companies to their government, as per a Guardian report. Thus, it is apparent that sanctions would hurt Russia.

Here are 5 potentially vulnerable Russian companies, which may be hurt by London’s sanctions.

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Rosneft Oil Company (LON:ROSN)

Moscow-headquartered energy firm Rosneft Oil Company’s focus is on producing and selling petroleum, petroleum products, and natural gas. Rosneft is the leading Russian oil refiner and crude exporter. The market cap of the company stood at £57,862.00 million on 18 February 2022. Rosneft Oil Company’s shares closed at US$6.97, down by 6.27%, on 18 February 2022.

PJSC Gazprom (LON: OGZD)

Headquartered in Saint Petersburg, PJSC Gazprom is among the biggest publicly-trading natural gas firms across the globe. The majority state-owned energy firm is Europe’s and Turkey’s biggest natural gas supplier. The market cap of the company stood at £74,514.20 million on 18 February 2022. Gazprom’s shares closed at US$8.07, down by 5.90%, on 18 February 2022.

JSC VTB Bank (LON:VTBR)

Moscow-headquartered VTB Bank along with its subsidiaries form VTB Group, which offers a variety of financial products and services across the globe. The second-largest bank in Russia operates via more than 20 credit institutions and financial firms worldwide. The market cap of the company stood at £5,424.02 million on 18 February 2022. Its shares closed trading at US$1.08, down by 5.09%, on 18 February 2022.

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Sberbank of Russia (LON:SBER)

Moscow-headquartered state-owned bank Sberbank of Russia offers a wide range of financial products and services worldwide, especially to post-Soviet countries. The ESG-leader is among Russia’s biggest employers and serves over 100 million global clients. The market cap of the company stood at £55,770.25 million on 18 February 2022. Sberbank of Russia’s shares closed at US$12.97, down by 7.85%, on 18 February 2022.

Rosneft Oil, VTB Bank: Stocks that may get hit by Russia-Ukraine crisis

PJSC MMC Norilsk Nickel (LON:MNOD)

Leading Moscow-headquartered mining firm Norilsk Nickel is engaged in mining and smelting of nickel and palladium. The independent mining firm mainly operates near the Yenisei River and focuses on sustainable usage of water while carrying out its operations. The market cap of the company stood at £31,476.34 million on 18 February 2022. Norilsk Nickel’s shares closed at US$27.97, down by 2.41%, on 18 February 2022.

Note: The above content constitutes a very preliminary observation or view based on industry trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.