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Investors hang hopes on Russian return to Western markets
(MENAFN) Investors are quietly speculating that US President Donald Trump’s recent efforts to negotiate a peace deal in the Ukraine conflict may lead to Russia’s reintegration into Western financial markets, Bloomberg reported on Thursday.
Since the escalation of the Ukraine conflict in 2022, the US and its allies have imposed numerous rounds of sanctions on Russia, cutting it off from Western investments and sanctioning its largest stock exchange. However, in recent weeks, traders at a London brokerage have started showing interest in purchasing Russian securities, particularly focusing on dollar-denominated bonds issued by Russian energy company Gazprom, which had been largely avoided for the past three years.
The speculation centers on the belief that Russian securities, currently heavily discounted, could dramatically increase in value if the sanctions imposed over the Ukraine conflict are lifted. Iskander Lutsko, head of research at Istar Capital in Dubai, told Bloomberg that investors expect these discounts to "collapse" as soon as there is a thaw in relations.
Investment managers are also exploring interest in betting on the ruble through non-deliverable forwards (NDFs), a financial derivative that allows investors to wager on a currency’s future value without involving physical Russian assets, thus avoiding sanctions.
Large US investment banks like Goldman Sachs and JPMorgan Chase are reportedly facilitating ruble-linked derivative contracts in response to rising investor interest in Russian assets. Evgeny Kogan, an investment banker based in Moscow, confirmed to Bloomberg that there is an “aggressive search for securities of Russian issuers,” with investors eager to determine how soon they can enter the Russian market.
The potential reintegration of Russia into the Western financial system could unlock hundreds of billions of dollars in investments, according to the report.
Since the escalation of the Ukraine conflict in 2022, the US and its allies have imposed numerous rounds of sanctions on Russia, cutting it off from Western investments and sanctioning its largest stock exchange. However, in recent weeks, traders at a London brokerage have started showing interest in purchasing Russian securities, particularly focusing on dollar-denominated bonds issued by Russian energy company Gazprom, which had been largely avoided for the past three years.
The speculation centers on the belief that Russian securities, currently heavily discounted, could dramatically increase in value if the sanctions imposed over the Ukraine conflict are lifted. Iskander Lutsko, head of research at Istar Capital in Dubai, told Bloomberg that investors expect these discounts to "collapse" as soon as there is a thaw in relations.
Investment managers are also exploring interest in betting on the ruble through non-deliverable forwards (NDFs), a financial derivative that allows investors to wager on a currency’s future value without involving physical Russian assets, thus avoiding sanctions.
Large US investment banks like Goldman Sachs and JPMorgan Chase are reportedly facilitating ruble-linked derivative contracts in response to rising investor interest in Russian assets. Evgeny Kogan, an investment banker based in Moscow, confirmed to Bloomberg that there is an “aggressive search for securities of Russian issuers,” with investors eager to determine how soon they can enter the Russian market.
The potential reintegration of Russia into the Western financial system could unlock hundreds of billions of dollars in investments, according to the report.
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