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Wednesday, 2 March 2022

Russia’s war rocks the markets as corporates continue to scramble for exits

Foreign-listed Russian equities plummeted yesterday as the Moscow Exchange remained closed for the second consecutive day, an indication of the impact that sanctions on Russia’s financial institutions will have on its bourse, Bloomberg reports. Depositary receipts for state-run gas giant Gazprom fell 71% by close in London after Shell said it would exit its joint ventures with the firm, while the nation’s biggest lender, Sberbank, lost 80%. London-listed Russian exchange-traded fund iShares MSCI Russia also fell 33% to hit a fresh record low.

Russia looks to block the exits: The country will impose a temporary ban on foreigners looking to sell Russian assets to make sure they “take a considered decision,” Prime Minister Mikhail Mishustin said yesterday during a government meeting, Reuters reported.

SWIFT is examining which Russian entities to remove from its system under Western sanctions, according to a press release. “We are engaging with these authorities to understand which entities will be subject to these new measures and will disconnect them once we receive legal instruction to do so,” the Belgian-based payment system said.

And more companies say “Dasvidaniya” to their Russia-linked business: KPMG is cutting ties with several Russian individuals targeted by Western sanctions, which includes “ending some of our client relationships in the UK and globally,” KMPG UK CEO Jonathan Holt announced on LinkedIn.

Automobile manufacturers are also jumping on the bandwagon, with Daimler Truck Holding AG announcing it will suspend business in Russia until further notice. Volvo is suspending the sale of its cars in Russia, while Harley-Davidson Inc and General Motors are also suspending shipments to the country.

Total Energies only committed to halting capex spending on new projects in Russia, according to a statement, stopping short of a wider withdrawal of the likes of Shell, BP, and Equinor.

Visa and Mastercard have blocked several Russian financial institutions from their payments network in compliance with the imposed sanctions, they said in separate statements. Both payment card firms will also donate USD 2 mn each in humanitarian aid to Ukraine, they said.


Saudi Arabia’s largest retail pharmacy chain, Al Nahdi Medical, looks poised for the biggest Saudi IPO since Aramco’s USD 30 bn listing in 2019, with demand running high for its shares hours after it opened the books to investors, Bloomberg reports. The company is looking to raise as much as USD 1.36 bn in the IPO.

Brookfield goes ahead with acquisition of FAB’s payment arm: Canadian asset management firm Brookfield has greenlit the purchase of a 60% stake in Magnati, First Abu Dhabi Bank’s (FAB) payment arm, in a transaction that values the firm at up to USD 1.15 bn, Reuters reports. The bank will retain the remaining 40% stake in Magnati, using the proceeds from the sale to support its “growth and transformation plans,” which include regional expansion. This comes a few weeks after FAB made an offer to buy a majority stake in Egypt’s financial services giant EFG Hermes.




+1.2% (YTD: -5.6%)



Buy 15.66

Sell 15.76



Buy 15.66

Sell 15.76


Interest rates CBE

8.25% deposit

9.25% lending




+0.7% (YTD: +12.3%)




+2.2% (YTD: +12.2%)




+1.3% (YTD: +6.3%)


S&P 500


-1.6% (YTD: -9.7%)


FTSE 100


-1.7% (YTD: -0.7%)


Brent crude

USD 104.97



Natural gas (Nymex)

USD 4.64




USD 1,944




USD 44,151

+1.4% (as of midnight)


The EGX30 rose 1.2% at yesterday’s close on turnover of EGP 1 bn (0.3% below the 90-day average). Foreign investors were net sellers. The index is down 5.6% YTD.

In the green: Eastern Company (+7.8%), Heliopolis Housing (+5.9%) and Rameda (+5.6%).

In the red: CIRA (-0.7%), Abu Qir Fertilizers (-0.5%) and CIB (-0.2%).

Asian markets are mixed in early trading this morning, while futures suggest that major US and European benchmarks will open in the green (implying that the dip-buyers are out in force after global markets tumbled yesterday.)

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