Wealthy Russians are reallocating capital toward crypto and foreign property, leaving markets bare and raising questions about the future viability of Russia’s financial system.
The wealthiest people in Russia are actively reconfiguring their investment portfolios: preference is given to cryptocurrency, real estate abroad, and private investment funds. These changes are taking place against a backdrop of a deteriorating outlook for the country’s future economic trajectory.
According to the Ukrainian Foreign Intelligence Service, the state of the Russian stock market indicates a prolonged decline: quotes continue to fall, and the trend of moving assets out of the country signals growing uncertainty about the future of the financial project called “Russia”.
This is evidenced by the state of the stock market in the Russian Federation, which has been confidently sliding down for the 19th week in a row. The desire to get rid of Russian securities and move assets out of the country eloquently speaks of only one thing: people are losing faith in the future of the financial project called “Russia”.
– Ukrainian Foreign Intelligence Service
Financial Dynamics and Key Findings
According to the Ukrainian Foreign Intelligence Service, as of mid-July, the shares of leading Russian companies had significantly fallen in price:
- Gazprom – over 21%
- VTB – over 21%
- Nornickel – 24%
- Aeroflot – 27%
- MTS – 28%
Russia’s largest gold producer, Polyus, lost more than 53% of its value in two weeks.
Since the beginning of April this year, according to analysts’ estimates, the Russian stock market has lost about 30% of its value and has fallen back to 2016 levels. Such a situation has not been observed throughout the entire period of statistics, dating back to 1997
– Ukrainian Foreign Intelligence Service
These calculations vividly illustrate the toxicity of contemporary Russian securities.
If an investor in early 2006 had invested one thousand U.S. dollars in Apple shares, today they would have earned more than $130,000 in profit. The same investment in Gazprom shares, by contrast, would have resulted in a loss of over $600. Not surprisingly, the Russian Finance Ministry has halted the placement of federal loan bonds three times in the past month
– Ukrainian Foreign Intelligence Service
The Foreign Intelligence Service also noted that investor proposals were so unattractive to the issuer that it effectively pulled out of trading, leaving funds not raised.
The publications of the Foreign Intelligence Service also mention the state of small business in the context of overall economic pressure.
According to the Foreign Intelligence Service, this dynamic indicates increasing toxicity of Russian assets and capital outflows abroad, which could affect the investment climate in the region in the coming years.