Investors closed shield against Russia
International asset managers are trying to reduce their investments in markets that are affected and may be affected by the crisis in the Ukraine; this is especially Russia and Eastern Europe markets. But some markets and benefit from the crisis, for example, the palladium price has reached a 13-year high
Exchange rates in Central and Eastern Europe, including the Hungarian forint and Polish zloty fell to a one-year low against the dollar. Investors are leaving the economies of those countries that are least protected from the consequences of anti-Russian sanctions. Quotes European shares also fell.
European countries and the United States in late July introduced extensive sanctions against some Russian and banks, arguing that Moscow supports the rebels in the east of Ukraine. Russia in response banned food imports from countries that support sanctions.
The escalation of the conflict between Russia and the West adds uncertainty in the markets, where already indicated uneven growth and changes in the policy of the Federal Reserve. With the increased volatility in the markets, investors are forced to clean up their portfolios, adapting them to the period of uncertainty. While a drop in prices does not attract hunters for low prices, and it suggests that investors are waiting for the new challenges in the future.
Hardest hit by the withdrawal of investors in Eastern Europe, sending a significant portion of its exports to Russia. This month, as of August 11 to investors withdrew $ 234 million from the retail companies in the region, although in July to put $ 33 million, and in June of $ 891 million, as evidenced by data EPFR Global. PLN from July 1 fell to 3%, and the Hungarian forint and Czech crown 4%.
However, some buy the assets, which, in their opinion, will rise in price in the event the conflict with Russia. Russia is one of the world’s largest producer of palladium, nickel and aluminum, and it has the second largest oil exporter. While the sanctions do not prevent the export of commodities. But some investors worry that future restrictions could harm the export of raw materials, or that Russia itself in response to stop the export.
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