European stocks with business exposure to Russia have lost more than $100 billion in market value since the war risks surged. Still, with the impact of sanctions on Moscow remaining uncertain, few are ready to snap them up just yet.
Peter Garnry, head of equity strategy at Saxo Bank AS, says that “Nobody knows where this ends and we are in a maximum uncertainty environment that requires a rethinking for most investors.”
The affected equities are varied, from gold miner Polymetal International Plc to tire maker Nokian Renkaat Oyj and Austria’s Raiffeisen Bank International, the selloff of European companies with Russian exposure has been severe. Some stocks have lost three-quarters of their value since February 18, when concerns over a Russian invasion of Ukraine began to take hold. Popular names such as Renault SA and Wizz Air Holdings Plc have also fallen more than 20%.
In that time, a total of $100 billion has been wiped off the value of the 22 Stoxx Europe 600 companies that get more than 5% of their sales from Russia. The London Stock Exchange said Thursday it has suspended trading in dozens of depositary receipts for Russian companies “in connection with events in Ukraine, in light of market conditions, and in order to maintain orderly markets.”
The impact on European equities from the Ukraine war doesn’t end there. Oil giants BP Plc and Shell Plc have said they will walk away from Russia, reversing three decades of investment following the collapse of the Soviet Union in 1991. Daimler Truck Holding AG, one of the world’s top commercial vehicle makers, said it will stop its business activities there until further notice and may review ties with local joint venture partner Kamaz PJSC.
The European sector that’s been most affected in the selloff is banks. The Stoxx 600 Banks Index has dropped nearly 20% since a peak on February 10, flirting with bear market territory. Within that, Raiffeisen has been the worst performer by far, losing about half its market value.