Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Rusal shares plunge over 40 percent on U.S. sanctions

Published 04/09/2018, 01:03 AM
© Reuters. FILE PHOTO: Aluminium ingots are seen stored at foundry shop of Rusal Krasnoyarsk aluminium smelter in Krasnoyarsk
HK50
-
GAZA
-
RUAL
-

HONG KONG (Reuters) - Shares of Russian aluminum giant United Company Rusal Plc (HK:0486) plunged as much as 41.8 percent on Monday as investors bailed on the stock after it was included in a new list of U.S. sanctions targeting Russian companies and their owners.

Shares in Rusal, one of the world's largest aluminum producers, fell to HK$2.70 in late morning trade, its lowest since October 2016. That compared with 1.76 percent rise in the benchmark Hang Seng index (HSI).

"Investors were rushing to square their position or doing what they need to do with their exposure to the stock and to those shares which are sanction and trade war sensitive," said Steven Leung, a sales director at UOB Kay Hian.

Washington imposed sanctions on Friday on seven Russian oligarchs, including Rusal's former President Oleg Deripaska, 12 companies they own or control, as well as 17 senior Russian government officials. The Russian individuals and companies were targeted for profiting from a Russian state engaged in "malign activities" around the world.

Rusal's shares (MM:RUAL) dropped 16 percent on the Moscow Exchange on Friday.

The company on Friday said that it regretted its inclusion on the new U.S. sanctions list, adding that its advisors were studying the situation.

"The company's initial assessment is that it is highly likely that the impact may be materially adverse to the business and prospects of the group," the company said in a filing to the Hong Kong bourse on Monday. It said further evaluations were being carried out to assess the impact of the sanctions.

Rusal assesses that the sanctions may result in technical defaults in relation to certain credit obligations of the group, and the company is evaluating the impact of such technical defaults on its financial position. (https://

A Hong Kong-based equity sales director said on Monday the stock prices are under pressure because the sanctions require investors subject to U.S. jurisdiction to ditch the stocks within a month.

The U.S. Treasury Department said investors have until May 7 "to divest or transfer debt, equity, or other holdings" in EN+, Rusal and Russian vehicle maker GAZ (MM:GAZA).

© Reuters. FILE PHOTO: Aluminium ingots are seen stored at foundry shop of Rusal Krasnoyarsk aluminium smelter in Krasnoyarsk

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.