Exiting Russian / Ukranian positions, possibility of invasion not priced in

I’ve decided to sell up on most of my Russian / Ukranian stocks.

HYDR, FXPO, SIBN, RSTI, GLTR.

I am holding on to FEES (Russian Electricity grid Yield 8.5%+, P/E <4 and P/B<0.3 (I can take the pain on this), and GAZP as 50% dividend payout news announced today implies *potentially* a very high yield.

I am increasingly concerned there will be an invasion/incursion in Ukraine. This build-up seems long/ sustained for a ‘training exercise’. If they go home without doing anything Putin will look weak.

I also note last year their western district held intensive training exercises as well.

He will be especially wary of talk of Ukraine joining Nato, in Russian terms this is equivalent to Canada joining the Warsaw pact – something that can’t be allowed to happen!

To me, military action is not in the RUB/USD exchange rate and is not in the price of stocks. So until the mists clear I will get out and await clarity. There are not likely to be any major positive catalysts soon, so at worst I miss a few % of gain over the next month or two whilst managing my risk. I may even be able to snatch a quick, small benefit from this, though its really being done for risk minimisation.

Hard to know how to call it – I initially thought of this as western scaremongering. This happens, we got many alarmist headlines when Russia started sending bombers towards UK airspace. What was never said was that NATO never stopped testing Russia’s air reaction (but this gets no press).

8 thoughts on “Exiting Russian / Ukranian positions, possibility of invasion not priced in”

    1. Interesting, Next step would be to look at Egyptian co’s. Not a country I know anything about, but dictatorships can be good for investing….

    1. I wasn’t planning on it. Working on a big new investment right now. Q1 was 5% up, now 17% YTD. Might do a Q2 one now you ask, havent traded much since Q4 to be honest.

  1. Hi, I live in Ukraine and I don’t really understand why you are afraid of an invasion, maybe you should come to Kiev and walk around the city to talk with the locals. not that I would bet my last money on it, but I see the invasion option is extremely incredible

    1. I’m afraid I don’t agree with you at all. I am not particularly interested in the view of locals in Kiev – far more important to consider the views of locals in Moscow. Lots of Russians consider Ukraine an integral part of Russia and there is history to back it up. The Russian’s didn’t leave their weapons in place for no reason and I dont believe the Ukranians will/can effectively resist. Ukraine has also behaved unwisely – cutting off the water to Crimea for example and stealing Russian gas. Maybe you don’t see it this way, and I hope it doesn’t happen but I see it as highly likely as Russia recovers it’s strength.

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