21829
World’s Top Financial Firms Exit Russia
World Economy

World’s Top Financial Firms Exit Russia

From Franklin Templeton Investments to BNP Paribas SA, global financial firms that once pushed to expand in Russia are pulling out as prolonged sanctions deepen the country’s first recession since 2009.
Franklin Templeton, which oversees almost $900 billion of assets, is liquidating its fund for the region, while French bank BNP Paribas exited its local fund-management venture and German reinsurer Munich Re closed its Moscow office, Bloomberg reported.
An 18% slide in the ruble from this year’s May high, the extension of sanctions linked to the Ukraine conflict and oil trading near a three-month low have compounded Russia’s economic contraction. The dollar-denominated RTS Index has slumped 18% from this year’s peak, prompting some portfolio investors to also exit Russian holdings.
“There’s no light at the end of the tunnel,” Simon Fentham-Fletcher, chief investment officer at Freedom Asset Management, said by phone.
BNP Paribas sold its stake in TKB BNP Paribas Investment Partners for an undisclosed sum to a Russian businessman, six years after acquiring it as part of its takeover of Fortis. The St. Petersburg-based company had $3 billion under management in April, according to its website.
Frederic Lemonde-San, a BNP Paribas spokesman in Paris, declined to comment on the Russian sale. The lender, which has a consumer-finance venture with state-run OAO Sberbank, has been in Russia since 1974 and is also involved in corporate and investment banking as well as insurance and car leasing.
Munich Re, the world’s biggest reinsurer, said it will service Russian clients from Munich, according to a statement on July 9.
Capital International, whose parent manages about $1 trillion, sold its stake in Europlan, which leases cars, after holding the investment for a decade. The board of the Franklin Templeton Russia and Eastern European fund agreed last week to liquidate investments worth about $58 million.
“The constraints that we suffer from as a result of these limitations” on investing that have been imposed through sanctions played a role in the fund’s closing, Mark Mobius, chairman of the Templeton Emerging Markets Group, said by phone.
The European Bank of Reconstruction and Development, set up in 1991 to help countries in the former Soviet Union become market economies, is also scaling back. The bank sold its stake in utility Enel Russia and cut its holding in hypermarket chain Lenta Ltd.
The EBRD halted financing in Russia a year ago, following President Vladimir Putin’s annexation of Crimea from Ukraine. Its Russian portfolio has shrunk to €6.3 billion ($6.9 billion) from €6.8 billion at the start of the year, according to Wallis.

Short URL : http://goo.gl/2xsKr7

You can also read ...

China Challenges US Solar Panel Duties
China says it is challenging a US tariff hike on solar panels...
In a retaliatory move, President Recep Tayyip Erdogan’s government on Wednesday announced higher tariffs on some US imports, namely on passenger cars (120%) and leaf tobacco (60%).
Turkey has raised tariffs on some US imports, including...
World trade volume growth peaked in January at almost 5.7% year-on-year but nearly halved to less than 3% by May.
Cyclical indicators point to slower and more uneven growth in...
Moody’s Predicts Slower Fiscal Progress in S. Africa
South Africa’s fiscal consolidation will be slower than the...
Nigeria CPI Drops to 11.14 Percent
Nigeria’s National Bureau of Statistics says the consumer...
File picture of Kim Jong-un (L) and Moon Jae-in at the truce village  of Panmunjom, South Korea.
South Korea President Moon Jae-in on Wednesday offered a bold...
Surging Inflation Mars Philippines Growth
The Philippine economy in 2018 is a story that can be summed...
Transport tickets and fuel have driven up costs for consumers.
Inflation in the UK climbed in the month of the July, as had...

Trending

Googleplus