Jpmorgan Russian Securit... Share Discussion Threads

[fabius1] 07/4/2022 20:52

Mattjos - Interesting. Thanks.

[mattjos] 07/4/2022 19:21

I've travelled for the purpose of business in Russia and sold our products there & we have still have demand from Russia for our products, albeit currently having to stop direct sales there but, from experience, the demand will simply find ways to buy from us (& many others) via indirect means. There are many third parties and middlemen out there who will act as the necessary conduits, without hesitation.

After the Crimea sanctions, it was not possible to buy French cheese in Russian supermarkets (& other such products) but …. in very short order, shelves were soon full once again with French cheese which was now labelled as product of A N Other country.
Around that time I was in Israel and noticed fields of fruit left unharvested and rotting. When I asked, I was told the main market had been Russia and much of that year's harvest could not be switched elsewhere in time but, other products which ripened / completed a few weeks layer all found its way to Russia easily enough.

Sanctions only have a very limited shelf-life .. business adapts & does so endlessly in the most inventive and creative of ways. Where's the demand, supply will match it.

There is much more support in Russia for Putin's action in Ukraine than the Western mainstream media will ever reveal on the likes of the BBC or other such biased newsfeeds.

[loganair] 07/4/2022 18:09

A friend of mine was just showing me round his local supermarket in Russia via What's app - shelves now have plenty of sugar on them.

[loganair] 07/4/2022 17:33

The MOEX Russia Index closed 0.9% higher at 2,635, lifted by banking stocks as investors continued to weigh on sweeping sanctions and Russia’s risk of sovereign default.

Sberbank shares closed 4.1% higher, partially recovering from yesterday's 8% slide as the prime target of US sanctions. Gains in the sector came despite Finance Minister Siluanov announcing the Kremlin will propose to abandon the payment of share dividends by state-owned banks for 2021.

[loganair] 07/4/2022 17:16

Russian coal and oil paid for in yuan is about to start flowing into China, Bloomberg reported on Thursday.

Several Chinese firms used local currency to buy Russian coal in March. Both steel-making and power-plant coal are being paid for in renminbi. These deals are traditionally made in dollars. Chinese buyers are interested in importing more Russian supplies.

Traders said that Russian crude sellers have also offered Chinese buyers the flexibility to pay in yuan. The first cargoes of the ESPO grade bought with Chinese currency will be delivered to independent refiners in May, people familiar with the purchases told Bloomberg.

[loganair] 07/4/2022 17:05

With in two years, Russia will have doubled its gas exports to China as Russia are putting interconnectors into pipelines that now solely can pipe gas to Europe to be able to sent this gas to China.

India is steaming mad that it is being told by the West, the UK and USA to buy less oil from Russia which they are buying at a discount. With India saying they are a country with hundreds of millions of poor people and the West is expecting them to buy expensive oil from the United States while rich Europe keeps buying billions worth of gas and oil from Russia.

[gbjbaanb] 07/4/2022 16:55

I notice today 2 news articles that shed a lot of light onthe situation.

1. The USA has voted unanimously to degrade Russia's trade status.

2. India has announced its intention to "stabilise" its trade with Russia (this is basically a PR way of saying more trade).

Now I'm sure the USA is happy to hurry is own trade for its own reasons, possibly its been believing the hype from a media that's been proven to be out of control) but it also shows that it'll make no difference to Russia, which has sold more oil to India since the invasion than it did in the whole of 2021. Russia will be OK with China and India as buddies, the west seems determined to "cut their noses off to spite their face". Any sensible foreign policy would be in negotiation with Russia over Ukraine, but a great reset in world trade is desired instead. 😀

[loganair] 07/4/2022 16:49

As we speak, currently there are at least 115 domestic flights airborne in Russia.

I have not read Zerohedge for over two years and I do not read their ilk.

[tigerbythetail] 07/4/2022 16:35

Loganair!
No spare parts (except for cannibalisation of existing fleet). No maintenance on the jet engines. (And remember how companies like Rolls Royce sell their engines - you pay by the flying hour for a package that includes that crucial maintenance).
So all planes grounded (or crashed) inside 3-6 months.
Russian internal civil aviation is finished (unless the war comes to a very quick end and on terms satisfactory to the West). Not only Aeroflot; all other Russian airlines as well. That's not some outlier opinion. It's consensus.
And so on for each industry.
You read far too much of the drivel they publish on Zerohedge and their ilk. (And, God, if any poor soul had taken their investment "advice" over the last months, they'd be down 90% or more!)

[loganair] 07/4/2022 16:21

As Russia is the largest country in the world, before sanctions circa 80% of flights by Russian airlines were domestic, with in Russia and there is still a large number of domestic flights today, talking about domestic flights of 8 plus hours.

Just look around the Moscow airports, still chock-a-block full of flights at the moment.

[glavey] 07/4/2022 16:14

Logan, Perhaps your friends aren't telling you the whole truth...

[amaretto1] 07/4/2022 15:25

Dilusional !!Keep watching Sky

[loganair] 07/4/2022 15:03

Tiger - I've been in and out of Russia since it was the Soviet Union in the 1980's and lived there for several years around 10 years ago and was still popping over to Russia until covid came a long and I still have many friends in Russia.

None of my friends are in despair, except for a couple of weeks when the rouble crashed and none of them think their lives are being destroyed.

The likes of Aeroflot are not dead entities, they have reregistered their aircraft onto the Russian register and are starting to open up some of their international routes again. Aeroflot are able to still buy their fuel cheaply as Russia produces it unlike in the West where many airlines are now needing to put an extra fuel duty onto the price of their tickets.

I am not hearing that mass unemployment is unfolding.

Yes, they are or were stock piling sugar in the same way in the UK stock piling toilet paper. Like with the toilet paper, the being able to buy sugar is now easing.

And it's nothing like 1991 to 1995 all over again, nothing like it at all.

[square root] 07/4/2022 12:43

Tbtt, I was undecided whether to buy more shares here or not. After reading your post, I've decided to buy more.

[galeforce1] 07/4/2022 12:30

Tiger - that’s a useful summary of the potential risks with JRS, and it’s a good idea to remind investors of these.
Personally I think the case for holding is stronger than the case for closing, but it’s always good to see both sides or the argument.

[loganair] 07/4/2022 12:14

Sanctions do not have much of a negative impact on Russia, they have a negative impact on the poor and middle class of the West, specifically Europe. Even with the current sanctions in place Russia is forecast to sell a record amount of oil and gas, $320bln worth.

The virtual signalling West feels good because they are doing something.

The virtual signalling West is all about lowering the standard of living to increase the level of good feeling.

[miti 1000] 07/4/2022 12:07

Spot on post.

[tigerbythetail] 07/4/2022 11:35

The big picture you are missing:
1. Russia is talking about nationalising / seizing assets held in Russia by "unfriendly countries" (as well as about forcing ADRs/GDRs to be exchanged for shares on the Moscow exchange). If that came to pass the bulk of JRS's assets are worthless.
2. The official "exchange rate" of the rouble is now completely artificial as convertibility is so limited. It is nothing more than a figure made up by Russia's Central Bank, not a number derived from true price discovery. Black market money changing is back in Russia - enough that the government is announcing draconian measures to clamp down on it. The black market rate (which is of course much nearer any "true rate" is currently around 165 roubles to the dollar - less than half the official rate.
3. The Russian economy is being absolutely hammered by the West's sanctions, and also a consequent mass brain drain of the company's best specialists. To give a general idea, new car sales are down over 60% in March, following a smaller decline in February. People just want out.
4. At any moment JP Morgan may decide to wind up the trust as part of its planned exit from Russia. Given Jamie Dimon's public pronouncements (he wants stronger sanctions) and the bank's other actions, this simply must be on the cards.
5. On the other side of the ledger, the trust does have some cash and Kazakh shares which are still tradeable. These are worth roughly 50p per share. So that puts some kind of a floor under the share price.
So, on balance, I don't think a share price of 110p represents good value (aside from the moral question). The war is clearly not coming to an end anytime soon, and may go on for years.
So I'd make this one a strong sell at its current price.

[soleman1] 07/4/2022 10:24

Possibly, failing to see the bigger picture. In hindsight there was good money to be made trading this but I know how angry I would be if I missed the big re-rate.

[diku] 07/4/2022 10:00

Punters locked in from last week rise?...

[soleman1] 07/4/2022 09:59

Yes given the moex asset prices and rub conversion this should be 550-600p now. Of course we expect a drop when foreign holders can sell Russian assets but there's quite a vacuum to fill. My guess is investors are thinking this will last years and so will sanctions, personally I think it will be over before month end and sanctions lifted as part of the deal.

[loganair] 07/4/2022 09:58

The MOEX Russia Index rose 0.8% to around 2,632 on Thursday after falling for two consecutive sessions, as local stocks shrugged off a new round of sweeping western sanctions as the government pledged to support Russian companies by buying their stocks with money channeled from the rainy-day National Wealth Fund.

The US announced Wednesday fresh sanctions targeting Russian banks and elites, while banning Americans from investing in Russia. The new sanctions hit Sberbank, which holds one-third of Russia’s total banking assets, and Alfabank, the country’s fourth largest financial institution. However, energy transactions were exempted from the latest measures.

Bank stocks bounced back from yesterday’s losses, with gains from Sberbank (3.3%), VTB (2.9%) and Credbk of Moscow (1%). Energy and other commodity firms were also trading in positive territory. Elsewhere, Rusgrain Holding shares outperformed with an 18% surge.

[loganair] 07/4/2022 09:52

Even after all the sanctions being placed on Russia, Bloomberg are reporting that 2022 will be a record year for energy earnings for Russia, forecasting over $320bln worth.


International sanctions on Vladimir Putin’s regime sank it to a record low of 121.5 rubles per dollar, triggering memories of the battering it took during the 1998 Russian financial crisis.

Things looked dire enough that U.S. President Joe Biden said the ruble had been reduced to “rubble.”;

Now, though, it sure hasn’t. The ruble has surged all the way back to where it was before Putin invaded Ukraine, extending its recent rally to trade as strong as 74.2625 per dollar in early Moscow trade on Thursday.

In Russia’s post-Soviet history, the ruble-dollar exchange rate has arguably been the economic indicator Russians care most about. The rapid ruble recovery gives Putin a major victory back in Russia, where many people fixate on the currency’s ups and downs, even as his military gets bogged down in Ukraine and outrage mounts across the globe over atrocities it’s committed.

It’s hard to ignore the lifeline other nations are tossing Putin by purchasing his country’s oil and gas. Doing so gives Russia a current-account surplus -- economics jargon for exporting more than you import, which tends to lift a the country’s currency -- and undermines the attempt to pummel Russia with sanctions.