By Umair Tariq. Originally published at ValueWalk.
While 66% of British investors report a drop in portfolio value amid the war, only 52% of Russian investors have lost money on their country’s stock market and 56% have earned on the fall of the ruble.
Russian Investors Experience Less Losses Than Their British Counterparts
London, April 6, 2022 — Russian investors have experienced less financial loss than their British counterparts since the start of the war in Ukraine, revealed a survey released today by uk.Investing.com.
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In a survey of 1,204 British respondents, 66% reported that their investments have lost value since the start of the Russia-Ukraine war. A separate survey of 1,478 Russian investors, however, found that only 52% have lost money following the crash of the Russian stock market in late February — and 56% have earned on the fall of the ruble.
How is this possible with the Russian economy in free fall? Fifty-five percent of Russian investors hold the majority of their assets in foreign stocks and currencies and 1 in 5 only invest in Western-based stocks. However, while fewer, those losses experienced by Russian investors have been far greater than those by British investors, with 43% losing more than 30% of their portfolio as opposed to just 10% of British investors suffering the same loss.
“While the Russian stock market plunged in value since the invasion began in late February, ironically, it is foreign investors who own the majority of shares that are available to trade on the Moscow Exchange, rather than Russian retail investors,” said Jesse Cohen, senior analyst at uk.Investing.com.
Almost half of British investors have made changes to the portfolio during the war, including 18% who added investments in gold and 16% who added investments in oil, according to the survey. About 1 in 10 investors are seeking opportunities with Russian-based stocks that are listed on UK indexes, and more than 20% would consider buying Russian ETFs at this time. In the survey of Russian respondents, nearly 50% of investors said they are looking out for opportunities to buy shares of Russian companies at low and attractive prices.
“Despite the negative impact of harsh Western sanctions on Russia’s economy, long-term buying opportunities are starting to emerge as a result of the historic collapse in stocks of leading Russian companies, most notably energy and commodity producers, such as Gazprom, Lukoil, and Rusal,” Cohen continued.
In both the UK and Russia, the Ukraine war has only added to the perception of cryptocurrency as a risky investment. Among British investors, 58% believe cryptocurrency remains “very risky” and 9% consider it “riskier based on the conflict.” Sixty-one percent of Russian investors also feel that there are too many risks associated with cryptocurrency. That said, nearly 30% of UK investors said they could understand how cryptocurrencies might be an attractive alternative for investors in distressed markets.
“Essentially, there have always been worries that rogue states could use cryptocurrencies to evade sanctions and move billions of dollars around the world in secret,” said Cohen. “The Russia-Ukraine war has done little to change that perception.”
Understandably, Russian investors are maintaining a relatively pessimistic attitude about the stock market in their country, with 60% anticipating a complete decline followed by a long and slow recovery. Even of those who hold a positive outlook on the Russian economy, 62% believe a recovery of the Russian market will take three to five years or longer after the lifting of sanctions.
British investors are more optimistic about their stock indices, with 57% expecting either a rapid recovery followed by rapid growth or flat, range-bound trading for the years ahead.
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