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    • Russia-linked stocks jump in neighboring markets since Trump victory
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    Russia-linked stocks jump in neighboring markets since Trump victory

    Umito Posted on

    Tugce Ozsoy and Veronika Gulyas
    | Bloomberg

    Stocks exposed to Russia rebounded from Turkey to Eastern Europe as Donald Trump’s election victory prompted investors to position themselves in favor of a resolution to the war in Ukraine, despite the enormous obstacles which remain.

    Companies around the world have been forced to cut business ties and divest assets after the United States and its European allies deployed sanctions in response to Russia’s full-scale invasion of Ukraine in 2022. Western companies that have maintained significant activities there have also seen their valuations decline. under pressure.

    Trump’s election promise to end the war quickly faces the challenge of reconciling Russia’s war goals with Ukraine’s struggle to keep its territory intact. Still, investors found some comfort in Ukrainian President Volodymyr Zelenskiy’s willingness to repair relations with the Republican leader after his victory.

    Shares of Vienna-based Raiffeisen Bank International AG jumped 10% on Wednesday. Hungary’s OTP Bank Nyrt., which also has operations in Russia, hit consecutive record highs over the past two sessions, ahead of its quarterly results release on Friday.

    Turkish companies with operations in Russia, including construction firm Enka Insaat and beer maker Anadolu Efes, also surged.

    “Some investors want to take early positions, even with the prospect of settlement,” said Adnan El-Araby, fund manager at Barings Emerging EMEA Opportunities. “A possible settlement is unlikely to occur before the first half of 2025, and any easing of sanctions would take even longer. »

    Europe’s emerging markets, particularly banks, would be the biggest beneficiaries of a potential decline in risk premia resulting from such a process, El-Araby said.

    Russian businesses are not yet expecting any relief, according to several people interviewed, including raw materials tycoons as well as government officials and state-owned companies.

    Trump’s victory is unlikely to lead to a rapid improvement in economic relations with Russia, said Alexander Shokhin, president of the Russian Union of Industrialists and Entrepreneurs, the largest economic lobby group, according to Interfax.

    Ukrainian bonds

    During his previous term, Trump imposed several rounds of sanctions, including against aluminum producer Rusal and the Nord Stream 2 natural gas project. The Foreign Ministry in Moscow said Wednesday that he had “not no illusions” on the issue and that the American political elite is anti-Russian “regardless of party affiliation.”

    Still, the rise in Eastern European stocks could be attributed to bets on a de-escalation of the conflict, said Gabor Bukta, an analyst at Concorde Securities in Budapest. Another stock benefiting from the trading is London-listed Wizz Air Holdings Plc, which is headquartered in Hungary and serves Russia and Ukraine, Bukta said.

    In fixed income, Ukrainian sovereign dollar bonds were among the best performers in emerging markets for a second straight day on Thursday.

    Umito
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