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Moscow blocks foreigners from ditching assets

3 minute read

Moscow has imposed a temporary ban on foreigners attempting to ditch assets.

Foreign investors have been barred from selling Russian assets following an announcement from the prime minister on Tuesday.

According to reports by Russian state news agencies TASS and RIA, Prime Minister Mikhail Mishustin implemented the temporary ban to allow foreign entrepreneurs to make guided, economic decisions and not ones based on “political pressure”.

“In order to give business a chance to make a considered decision, a presidential order was prepared to impose temporary curbs on exit from Russian assets,” the PM said.

Western nations have continued to impose sanctions on Russia following its invasion of Ukraine last Thursday.

Since then, a swathe of foreign companies has moved to sell or limit their business involvement with Russia. Among them, the Australian sovereign wealth fund and the NSW government.

The Future Fund confirmed on Monday it will wind down the $200 million it has invested in companies listed on the Russian stock exchange.

According to The Sydney Morning Herald, the $15 billion NSW Generations Fund is believed to hold $75 million in Russian debt and equities.

In a statement issued on Monday by NSW Treasurer Matt Kean, he said it was important “for liberal democracies to stand with Ukraine and stand up for our values”.

“The NSW government intends to sell its holdings of Russian assets in its investment funds,” Mr Kean said.

Commenting on Russia’s latest kickback, AMP’s Shane Oliver said exiting Russia is difficult, period.

A foreigner looking to sell the Russian asset or exposure to the asset would have to find some way to transfer ownership of the asset to a willing buyer all the while outside of Russia. It’s possible but it would be a more complicated sale process and probably occur at very depressed prices,” Mr Oliver told InvestorDaily.

“There will be a loss in value as lots of investors globally are trying to do the same thing at the same time. But investors would be seeing it as more a legal (given the sanctions) and/or ethical issue rather than an investment decision,” he explained.

The Russian central bank was forced to hike its key interest rate to 20 per cent on Monday, following a record drop in the rouble to an all-time low.

Maja Garaca Djurdjevic

Maja Garaca Djurdjevic

Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.