Russian share index down 3pc

March 22, 2014 - 6:57:05 am
A man walks past the head office of Bank Rossiya in St Petersburg yesterday. Visa Inc and MasterCard Inc have stopped providing services for payment transactions for clients at Rossiya.

MOSCOW/BRUSSELS: Russian shares fell sharply yesterday as investors took fright at tougher than expected US sanctions against President Vladimir Putin’s inner circle over Moscow’s seizure of Crimea from Ukraine.

The United States added 20 names to its sanctions blacklist, including Kremlin banker Yuri Kovalchuk and his Bank Rossiya, oil and commodities trader Gennady Timchenko and the brothers Arkady and Boris Rotenberg, who are linked to big contracts on gas pipelines and the Sochi Olympics, as well as Putin’s chief of staff and his deputy, the head of military intelligence and a railways chief.

In one immediate consequence, US credit card companies Visa and MasterCard stopped providing services for payment transactions with Russia’s SMP bank, owned by the Rotenberg brothers, the bank said.

President Barack Obama said Washington was also considering sanctions against key economic sectors including financial services, oil and gas, metals and mining and the defence industry, if Russia made military moves into eastern and southern Ukraine.

Though the MICEX share index lurched about three percent lower when trade opened, Putin mocked Obama’s announcement of the visa bans and asset freezes on the money men and security officials who accompanied his rise from the mayor’s office in Saint Petersburg in the 1990s.

Prime Minister Dmitry Medvedev, however, made clear that Russia would step up financial pressure on Ukraine. He said the former Soviet republic should repay Moscow $11bn under a gas supply contact that should be scrapped because it no longer applied.

Reuters

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