MOSCOW, October 29, Nadezhda Sarapina. In the West, the funds of not only large businessmen, but also ordinary citizens were frozen. Holders of securities of foreign companies and mutual funds suffered, regardless of the amount of investment. Dividends continue to accrue, but they cannot be received. How to sell shares. And depositories continue to look for a way to appropriate Russians’ money.
Save and multiply
According to opinion polls, every third person in the country invests. The most popular instrument is shares, 62%. 33% had bonds, 29% invested in foreign currency, 23 in mutual funds (MUIF), 15 in precious metals, 12 in cryptocurrency, nine in business.
Brokerage services are widely available. Banks provide customers with alternatives to traditional savings accounts. Many specialized applications have also appeared for selecting individual packages, buying and selling papers remotely.
In addition, the entry threshold has been significantly reduced. “If previously the minimum was several hundred thousand rubles, now you can invest up to a thousand, especially in mutual funds. As for shares, it’s enough to buy one,” says Alexander Razuvaev, a member of the supervisory board of the guild of financial analysts and risk managers.
Toxic asset
Some preferred to keep their savings in securities of Western companies, mainly the largest corporations that make up the Dow Jones index: Coca-Cola, General Electric, Intel, IBM, McDonald's, Microsoft, Nike, Disney and others. Now these funds are frozen. “The Central Bank has repeatedly warned that investments in enterprises from unfriendly countries could turn out to be toxic, and this is what happened,” recalls Razuvaev.
“The seized assets cannot be sold, dividends do not come, some, for example, Head Hunter depositary receipts withdrawn from the American stock exchange, have simply been reset to zero. The rest can only be observed, they are absolutely illiquid,” explains investment advisor Yulia Kuznetsova.
There are isolated payments made by court decision, but the main ones are not available, and the prospects for unblocking are very vague. As for dividends, they come occasionally — for pre-sanction periods. Razuvaev notes that even on securities purchased from Russian financial institutions, interest is not paid. Those who bought through countries such as Kazakhstan or Azerbaijan found themselves in a privileged position.
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Cold War
However, interest continues to accrue. Depositories Euroclear and Clearstream are recording huge profits, but have no plans to return anything yet. On the contrary, the head of the European Commission, Ursula von der Leyen, has repeatedly said that Europe’s goal is the confiscation of Russian assets in favor of Ukraine. Of course, this is very difficult from a legal point of view. The EU has still not found a legal justification for the appropriation of other people's funds. In addition, they fear the loss of investment attractiveness and retaliatory measures.
Nikita Moiseev, a professor at the Department of Mathematical Methods in Economics at the Plekhanov Russian University of Economics, points to the recent initiative of the Central Bank to exchange frozen assets for Western ones. The problem is the disproportion: there are many times fewer foreigners. In any case, this situation will drag on for months, or even years, the expert is sure.
The financial market offers services for buying back “dead weight”, but at a discount of about 80%. The expectation is that in the end everything will return to normal, but the risks are very high.
«This should serve as a lesson to investors. You should be smarter in choosing assets and keep capital for the most part in the jurisdiction of the state where you have citizenship and a brokerage account,” Moiseev emphasizes. In addition, there are many alternatives in Russia.
Analysts advise paying attention to companies with a stable cash flow, for example, Mosenergo — Moscow always consumes a lot of electricity. Or in the cellular communications segment — you can’t live without it now either. Enterprises that are highly dependent on the business cycle, such as metallurgy, as well as shares from new sectors, are considered risky. You can consider investment gold and silver coins — these are more profitable than bullion. Sberbank has lots from three thousand to nine million rubles. “Sometimes the value grows by hundreds of percent per year. The main thing is to study the issue, but here everything is much simpler than with shares,” notes Razuvaev. Mutual funds in the same Sberbank start from 100 rubles with degrees of risk from minimal to high, and profits reach 80% or more. So people with low and average incomes have plenty to choose from, in addition to deposits with low returns.