Shares of the giant aluminium producer owned by Russian billionaire Oleg Deripaska plunged 50 per cent in Hong Kong yesterday as U.S. sanctions cast doubt on the future of the firm's banking and trading relationships.
Julius Baer analyst Carsten Menke said "This is a further hit to Russian aluminium exports to the US They come after the tariffs (US President Donald) Trump introduced in March".
The US Treasury on Friday included Rusal and seven other Deripaska-linked firms in a list of 12 Russian companies hit with sanctions that it said were meant to punish the country for actions in Crimea, Ukraine and Syria, and attempting to subvert Western democracies.
A Hong Kong-based equity sales director said on Monday the stock prices are under pressure because the sanctions require investors subject to US jurisdiction to ditch the stocks within a month. Its market value in London has been slashed by $2 billion.
EN+, another company owned by Deripaska, plunged 25 percent on the London bourse, the BBC reported.
The new sanctions promise to make it much more hard for the companies to do business overseas.
The company said the sanctions were likely to have a "materially adverse" impact on its business and finances.
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The two companies did not respond to requests for additional comment on Monday.
Jasper Lawler, head of research at London Capital Group, added: "The sanctions make it nearly impossible for these Russian firms and their billionaire owners to transact in United States dollars, the main currency used in worldwide trade and the standard denomination for commodities".
The US said however that Friday's action was taken under a law passed to punish Russian Federation for its alleged bid to interfere in the 2016 US presidential vote, as well as its intervention in conflicts in Syria and Ukraine.
The US said it imposed the latest sanctions because of Russian activity in Ukraine, its support of President Bashar al-Assad in Syria's civil war and for subverting Western democracies.
"We take great care with our leading companies", Russia's deputy prime minister, Arkady Dvorkovich said, according to the AFP.
The sanctions were weighing on broader markets in Russian Federation.
The RTS index, which trades in dollars, fell 9.75 percent, and the MOEX index, which trades in roubles, fell 6.9 percent. "If end-users make products that sell to the United States, they might not want to buy Russian aluminium".