The Russian ruble has been volatile in the past few years, and it seems that the sanctions from the United States and European Union just make this volatility even worse. In this article I will show you how to profit from the fall of Russia’s currency.
In a short release on its website, the exchange said: “Moscow Exchange has suspended trading on all of its markets until further notice.” Russian Central bank tapped its $600 billion-plus war chest to prop up the ruble and regulators banned short selling on the stock market
The MOEX index plunged as much as 45%
The MOEX index plunged as much as 45% in early trading on Monday. The Russian ruble fell to a record low against the US dollar, falling below the level of 65 rubles to the dollar for the first time since 1999. These sharp declines are due to the fact that many investors are worried that a global trade war will make it harder for Russian companies to export their goods abroad. This is another sign of how fragile the markets really are, as investors need to be careful not to let fear dictate their strategy.
Volatile markets and international reaction
The Russian ruble has been very volatile this year, and that’s what makes it a great opportunity to profit in a volatile market. The currency has seen some of its lowest points just this week, but that means there could be a nice rebound coming soon. If you’re looking for an easy way to make money in the stock market, this is one of the best options right now.
The UK and allies will impose sanctions to cripple the Russian economy following Vladimir Putin’s “barbaric” assault on Ukraine.
Boris Johnson promised a “massive” package of economic measures in tandem with the US and European Union after the Russian president finally launched the invasion which had been feared for weeks.
Short Sberbank (SBRCY) — Russia’s largest lender
This was one of the best-performing stocks in Russia last year, the company is not only struggling with sanctions imposed by Western governments, but also has had a difficult time raising capital on international markets.
Short Rosneft (MCX: ROSN) – East Siberian Oil and Gas Company
Rosneft is a Russian oil company that was the subject of international sanctions and a shareholder dispute. While the stock price has remained relatively stable, the country’s recent foreign policy moves and internal affairs have impacted sentiment for the company. Shorting Rosneft is a risky proposition but may be worth it in markets where investors are still feeling optimistic about Russia.
Short Gazprom (GZPFY) – giant gas company behind the Nord Stream 2 pipeline
Gazprom is one of the largest gas companies in Russia with a market cap of $102 billion. The company’s share price has fallen dramatically since it announced its plan to build a natural gas pipeline from Russia to Germany. This has put pressure on the company, leading many analysts and investors to believe that Gazprom shares will continue their downward trend. A short sale of GZPFY would be a speculative play, but if the market remains volatile, it might be a good idea to invest in this Russian stock.
Short RTS index – “Russia Trading System” of the 50 Russian stocks traded on the Moscow Exchange
The Russian Trading System index tracks the performance of 50 stocks listed on Moscow Exchange. It is a free index and invests in medium to large capitalization companies mainly located in Russia. The index has a market capitalization of $130,8 billion and has risen by 2% over the last year. Russia is not considered a high-growth market. The country has had a stagnant economy and experienced many difficulties over the last five years. The Russian Trading System index includes 50 stocks traded on the Moscow Exchange and reflects the performance of the Russian equity market in general.
Russian banks and oil companies
The Russian stock market is not too different from the rest of the world. It is volatile, and shares can rise or fall in a matter of weeks.
The main difference is that the banking system is largely inefficient due to state-level interference. This means that a company could be profitable, but still default because banks refuse to lend money for loans which are needed for payroll and other day-to-day expenses. Some of the best businesses to invest in are those based on natural resources like Russian oil companies and banks.
Russian banks and oil companies were among the hardest hit in volatile trading, with shares in Sberbank (SBRCY) — Russia’s largest lender — losing 43% of their value. Rosneft, in which BP (BP) owns a 19.75% stake, also shed 43%. BP shares dropped 4.6% in London. Gazprom (GZPFY), the giant gas company behind the Nord Stream 2 pipeline, was down 35%.
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