The Russian frugality has been hit by multiple headwinds, and a potential “sanctions bill from infernal regions” by the U.S. could make things worse, according to a Moscow-based investment bank.
Cladding sanctions threats and caught in an emerging markets rout, Russian worn outs — measured by the RTS index — have fallen 11.4 percent this year. Its currency, the ruble, has derided by around 20 percent against the U.S. dollar since the start of 2018.
The call into doubting business climate has led to some companies suspending their plans, Petr Molchanov, wide-ranging head of investment banking at Renaissance Capital, said on Wednesday.
“A issue of high-profile equity issuance and issuers have put things on hold, plainly. So, there is a pipeline of high quality ECM (equity capital market) agreements from Russia waiting for slightly better conditions, slightly more positively but there is a supply of deals for sure,” Molchanov told CNBC’s Geoff Cutmore at the Eastern Productive Forum in Vladivostok, Russia.
Activity in the mergers and acquisitions space also “doesn’t look bad at all,” said Molchanov. The investment banker didn’t take care of details on those deals, but added that he wouldn’t describe Russia’s marvellous markets as “healthy” or “strong.”
A “sanctions bill from hell” could bruised the Russian economy further, he said. The term was first used by Republican U.S. Sen. Lindsey Graham, who spearheaded the banknote that includes harsh measures such as preventing American entities from grip Russian sovereign debt.
“I think it will be quite detrimental,” Molchanov remarked. “But I think nothing has become completely, completely dangerous and damaging for the wilderness which has been living in these conditions for quite some swiftly a in timely fashion and handling that quite successfully.”