Analysis-DIY investors eye quick buck in ‘uninvestable’ Russia -Breaking
Carolyn Cohn and Iain Withers
LONDON, (Reuters) – While Russia has become a major investor in the West over recent weeks, a handful of small investors are seeing if they can get a good deal on Russia and are ignoring any ethical concerns.
While many Brits are donating money to charities in support of Ukraine’s invasion by Russia, some are trying to make a profit on social media and are offering “buy the dip” tips.
Reddit investor on March 4: “For me, it’s a once in a lifetime opportunity to purchase,” stated Evraz stockholder about Russia-focused steel and mining company Evraz.
Six days later Evraz’s London listed shares were suspended. This was after Roman Abramovich, the UK’s largest shareholder, had been sanctioned. Investors who placed a bet on the stock would have their money frozen.
Retail investors have found Russia-focused investments to be popular despite their risks.
Russia, which called its actions “special operations”, launched missiles against an airport in Lviv on Friday. This is a place where thousands of refugees are seeking safety far away from the Ukrainian battlefields.
While major investors consider Russia uninvestable, DIY investors who took stock-picking up during the panic in the pandemic have not been deterred.
A number of Russia-focused London stocks, including Evraz by Abramovich and Polymetal the gold and silver producer Polymetal, were recently listed on London’s stock exchanges. According to Reuters’ review of their websites, they have risen into the highest-bought stocks table at several large investment platforms in Britain.
Evraz stock fell 67% just before it was suspended, while Polymetal’s share price has dropped more than 15% since the Russian invasion on February 24, 2014.
Although it’s playing with fire and appears mad to me. Some people like to place aggressive bets. Holly Mackay is the founder of Boring Money and its chief executive officer.
Financial Conduct Authority is the regulator of markets and told Reuters they were monitoring the situation.
The regulator stated that investors should be cautious when investing in businesses susceptible to the Russian invasion.
Customers on the AJ Bell interactive investor (iii) ranked Evraz among the five top-seller stocks. Hargreaves Before stock was suspended, Lansdown (LON) platforms.
The stock had also been the most buy-to sell ratio on Freetrade. These four stocks are primarily for retail investors who do not trade on a professional platform.
In its sanctions, the UK claimed that Evraz had helped to destabilize Ukraine financially and could have provided steel for Russian tanks. Evraz refutes the allegations.
AJ Bell claimed that Evraz shares would continue to be in customer portfolios, at the same price as it was suspended. ii however stated that shares were being held pending further information.
Polymetal also ranked among the 10 top-most bought stocks across all platforms last week, according to Reuters. It was also on AJ Bell’s top ten list.
The UK has not placed sanctions on the company and shares of it are trading as normal, though Russell removed them from their indexes Monday because many brokers had refused to trade their shares.
Polymetal has eight silver and gold mines in Russia, and the majority of its revenue comes from Russia. It has called for peaceful resolution to the crisis in Ukraine.
“MAKE YOUR OWN DECISIONS”
In the last few years, retailers have grown to be a larger force in the markets as more platforms provide commission-free trading. Additionally, stock-pickers have become louder on social media.
Online investment platforms in Britain are growing at a rapid pace, and new investors tend to be younger and first-timers.
Mackay stated that the platforms could need to offer more warnings or ethics filters, as well as other investors who have participated in the Ukraine crisis. However, she advised against being too restrictive.
In the past, regulators have warned about risks for retail investors. This was especially after the suspension by British property funds of 2016 and 2020 COVID-19 lockdowns, as well as the suspension and subsequent collapse Neil Woodford’s flagship investment fund.
Hargreaves Lansdown said that AJ Bell and Hargreaves Lansdown primarily offered a platform where customers could make investment decisions based on their ethical beliefs.
Hargreaves-Lansdown spokeswoman said “our job is to provide information so clients can make informed decisions.” Hargreaves Lansdown added that they were “horrified” by the human tragedy and are working closely with regulators.
Freetrade claimed it is closely monitoring the situation, communicating with regulators and regularly communicating with customers about the dangers of investing in Russian stocks.
Abrdn purchased ii in December. The company said that Russia-linked transactions were not typical of investors. They also added that it was working to create ethical filters for assets.
A spokesperson for the ii stated that “there will always be those who choose to lean heavily on extreme volatility.” It has been that way for a long time, and it is not something we can change.