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London Markets: Russian-listed stocks tumble in London, while BP plunges on Rosneft exit

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Russian stocks that managed to trade on Monday — from London — were taking heavy hits as sanctions intensified against the nation over the ongoing attacks on Ukraine.

The Russian central bank, which doubled interest rates to 20% to stem the slumping ruble, said the stock market would not open on Monday, and it would announce Tuesday whether the exchange would reopen.

In volatile trading, the ruble
USDRUB,
+17.87%

was last down 16% against the dollar, off its lows that saw a drop of around 30% earlier.

Sberbank’s secondary London listing
RU:SBER
SBER,
-69.70%

slumped 70%. The European Central Bank said Monday that an Austria-based subsidiary of the state-owned Russian bank would likely to fail as depositors have bailed over the war in Ukraine, the European Central Bank said Monday.

Among the many others with secondary listings in London plunged, including discount store chain Fix Price Group 
FIXP,
-78.35%
,
whose shares slid 80% and Magnitogorsk Iron & Steel Works
MMK,
-68.08%

 down 68%. Natural-gas producer Novatek
NVTK,
-66.43%

slumped 66% and chemical-holdings group PhosAgro
PHOR,
-58.14%

stock tumbled 57%.

On the FTSE 100, shares of Russian steelmaker Evraz
EVR,
-27.36%

and precious metal miner Polymetal International
POLY,
-49.56%

sank 46% and 27% respectively. The FTSE
UKX,
-1.34%

itself was down over 1% to 7,399, with banks and major oil companies among the biggest decliners.

HSBC shares
HSBC,
-6.13%

HSBA,
-5.86%

shares fell nearly 5%.

BP stock
BP,
-6.96%

BP,
-5.93%

slid 6% after the energy giant said it would exit its stake in Rosneft, a state-controlled Russian oil-and-gas company. BP will take two noncash charges in the first quarter to reflect the change, including an $11 billion for foreign exchange losses that have accumulated since 2013.

Shares of Shell
SHELL,
-2.26%

SHEL,
-2.47%

fell around 2%. Losses for the energy giants came as Brent prices
BRN00,
+3.89%

came close to $100 a barrel.

Read: Oil prices surge on new Russia sanctions, while U.S. and others eye further release from strategic reserves

“We’ve highlighted on numerous occasions that the Rosneft stake is out of sync with BP’s longer term strategic direction. However, walking away at this time is obviously not ideal from a shareholder value perspective,” said a team of RBC analysts led by Biraj Borkhatariam in a note to clients.

“Monetizing the stake for fair value looked difficult even in more ‘normal’ times, and now, to us, it looks extremely challenging. That said, the exit from this stake ultimately removes one of the concerns with the long term investment case,” said the analysts.

The potential loss of Rosneft dividends is “compensated by a $5-6/bbl change in oil prices, which we’ve already seen in recent days,” said the analysts. But they still expect significant free cash flow in coming years for BP, and are sticking to an outperform rating.

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