Business insiders and advisers also questioned what practical steps Russian businesses could take at this stage to protect their assets and investments.
“Things have moved incredibly fast over the last month. There isn’t much that people with wealth can do at this moment to protect themselves against a possible invasion — it is a bit too late for that,” said the investment banker. “Russian assets are not in high demand, the ruble is crashing and any liquid assets are already being transferred abroad.”
Outsiders with connections to the Russian elite also suggested the country’s richest are hurting at the sight of a looming, self-induced economic crisis, but unwilling to say so publicly.
“I used to know well several CEOs of these companies,” former U.S. Ambassador to Russia Michael McFaul wrote on Twitter on Tuesday, in response to the stock market slide. “I am pretty sure I can predict their private views of these senseless war preparations, let alone war. Their views expressed in public, of course, will be different.”
The U.S. has proposed a draft sanctions package to be introduced if Russia takes aggressive military action against Ukraine. It would require President Joe Biden to sanction at least three of Russia’s leading banks by cutting them off from the global financial system, possibly block U.S. dollar transactions and give him the power to sanction basically any leading Russian business figure as desired.
Calm exterior
But there are islands of calm amid the market storm. Rostislav Ordovsky-Tanaevsky Blanco, one of the country’s largest restaurateurs, told The Moscow Times he expects the war talk to die down. “The West is starting to listen — there is hope that things will end in some balancing act.”
Russian corporates have, on the whole, taken the talk of a possible invasion cautiously, said Tom Blackwell, CEO of EM Communications, a corporate advisory firm that represents a host of Russia’s largest companies.
“There’s a huge difference in the mood between the people looking at Russia from the outside and the people here,” he said in an interview.
“There’s certainly been volatility in the stock market. But other than that, I’m not sure there are concrete examples of businesses hurting, having to do things or being overly impacted by this at the moment.”
Some Russian businesses have taken steps to prop up their plunging share prices amid the market rout.
State-owned Sberbank, Russia’s largest bank, will embark on a 50-billion ruble ($640 million) share buyback scheme — an announcement which offered only short-lived respite to the bank’s battered share price, down 21% since the start of the year. Discount retailer Fix Price also announced a smaller buyback program Monday, while privately owned energy giants Novatek and Lukoil have also upped existing share buyback programs in recent days.
“I’m sure there are a lot of companies feeling that they’re undervalued,” said Blackwell. “I wouldn’t be surprised if you see a development of the buyback trend in the short-term.”
Foreign investors and firms in the capital are also presenting a steady exterior.
“I wouldn’t define the mood as panic. It’s business as usual — because business has gotten accustomed to this situation over the years,” said one representative of a business association, who also requested anonymity citing the “politically sensitive situation.”
Businesses in Russia have been through several rounds of war and sanctions scares since 2014, when Moscow annexed Crimea and started backing separatist forces in eastern Ukraine. Foreign investment collapsed in the aftermath, and experts say it may never reach pre-Crimea levels again. That has had a hardening effect on the firms that remained — only those with the highest appetites for risk — which could be behind some of the public displays of calmness at the moment.
Source:themoscowtimes.com/2022/01/25