Investors betting on Russian return to Western markets
The US and its allies have slapped numerous rounds of sanctions on Moscow since the escalation of the Ukraine conflict in 2022. Russia has been cut off from Western investments and its largest stock exchange has been sanctioned.
In recent weeks, traders at a London brokerage have been seeking to buy Russian securities, an asset largely avoided over the past three years, Bloomberg reported. Their focus has been on buying dollar-denominated bonds issued by Russian energy giant Gazprom.
Investors are speculating that heavily discounted Russian securities could surge in value if Ukraine-related sanctions imposed on Moscow are lifted, the outlet stated.
Investors 'understand that as soon as there's a thaw, these discounts will collapse,' Iskander Lutsko, Dubai-based head of research and portfolio management at Istar Capital, told Bloomberg.
Money managers report that sales teams are assessing interest in staking on the ruble through non-deliverable forwards (NDFs), a financial derivative that allows investors to bet on a currency's future value without actual exchange. By not involving physical Russian assets or individuals, they remain outside the scope of current sanctions.
Major US investment banks Goldman Sachs and JPMorgan Chase have reportedly been brokering ruble-linked derivative contracts to meet growing investor interest in Russian-related assets.
'There's an aggressive search for securities of Russian issuers around the world,' Evgeny Kogan, a Moscow-based investment banker, told Bloomberg. 'Investors in general are asking how quickly they can enter the Russian market.'
According to the report, Russia's potential reintegration into the Western financial system could unlock hundreds of billions of dollars.
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