By Gavin Lumsden, Nicole Piper, Citywire Investment Trust Insider, 01 Mar, 2022:
Battered JPMorgan Russian (JRS) shares have sunk another 23% after index provider MSCI declared Russia was ‘uninvestable’ and a second director resigned from the board of the single-country fund.
Ashley Dunster, a former Capital Group fund manager in the US who had been a non-executive director since 2019, has stood down with immediate effect, company chair Gill Nott said today.
His departure follows the resignation of Tamara Sakovksa, a former Goldman Sachs private equity specialist, last Thursday when Russia invaded Ukraine. This provoked unprecedented Western sanctions that have led to the suspension of open-ended funds at JPMorgan and other groups, such as Liontrust, with exposure to the country.
The 80p slide in JRS, the UK’s only listed Russia fund, left the stock at a six-year low of 269p and reduced its market value to around £105m. It came as Moscow’s stock exchange was shut for another day while its central bank sought to temporarily restrict foreign investors from selling local assets.
The shares plunged 29% yesterday as the rouble and London-listed Russian energy and banking stocks, such as Gazprom, Rosneft and Sberbank, all held by JRS, slumped in response to Russia being shut out of the global financial system and excluded from international sporting events…
The turmoil around the trust deepened this week after an executive at MSCI said removing Russian listings from indices was a ‘natural next step’ following global sanctions against the country…
Last Thursday, in response to the invasion of Ukraine, MSCI froze positions of Russian securities in its benchmarks, meaning it will not implement changes it otherwise would have…
Marten & Co analyst and Citywire columnist James Carthew said: ‘It seems reasonable to assume that the damage Russia has brought on its economy would not be fixed easily. Sberbank, one of the most commonly held Russian stocks ahead of the war, looks unlikely to survive it, for example. Exclusion from emerging market indices, if it comes, might be a long-term thing.’
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