Spark in sanction discussions undermine Russian stocks

MOSCOW, Jul 12 (PRIME) – The Russian stocks eased on Friday after the U.S. House of Representatives proposed to amend the country’s defense budget prohibiting all deals with the Russian sovereign debt, analysts said.

The MOEX Russia Index fell 0.43% to 2,777.58 and the RTS decreased 0.79% to 1,387.87.

“The Russian market found a reason for a slight downward correction. The House of Representatives of the Congress approved an amendment to the defense budget for the 2020 financial year, encompassing restrictions on Russia’s sovereign debt due to Moscow’s alleged interference with the U.S. electoral process,” Yaroslav Kabakov, director for strategies at investment company Finam, said.

Sergei Suverov, senior analyst at BCS Premier, said that the amendment was a very concerning step forward to new sanctions, as experts previously thought the U.S. might block only operations with new Russian debt, not old securities as well.

“Nevertheless, probability that the amendment will fail to pass in the Senate controlled by the republicans is high. In addition to that, Russia has not given any reasons for introduction of new sanctions lately. Still, shares of Sberbank are falling today by more than 1%, which shows that foreigners account for the major part of sales,” he said.

Sberbank lost 1.77% to 237.02 rubles.

Suverov also said that the reaction of the stock market players was not as severe as could have been, as oil prices grew simultaneously with the tensions between the U.S. and Iran, helping the national market and the ruble to restrain losses.

Alexander Osin, head of department for operations at the Russian stock market at investment company Freedom Finance, said that ALROSA was one of the loss leaders falling 3.66% to 79.50 rubles. The company denied acquisition of a license for a mine the Marange diamond fields in Zimbabwe contradicting earlier reports by Zimbabwean state media, Osin said.

Below are the MOEX Russia Index’ five most active stocks on Friday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-1.77	237.02	11.344
Gazprom	-0.69	245.50	5.312
VTB	0.00	0.044	2.895
Lukoil	-0.13	5236.00	2.672
ALROSA	-3.66	79.50	1.667

(62.9944 rubles – U.S. $1)

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