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We have tried to drive home the seriousness of what is going on in Ukraine at the moment, where hundreds of thousands are fleeing their Russian-targeted homes as hundreds of thousands of others valiantly defend their country against the overwhelming force of the world’s largest nuclear power. If none of that has convinced you, however, dear reader, we must inform you that shit is getting really real now:

Businesses in Europe withdrew equity-capital-markets deals totaling $634.31 million in February, up from $140.4 million in February 2021, according to Dealogic, a data provider. The lion’s share of those transactions—about $608 million—were pulled last week, during which companies raised only $61.94 million in equity deals. Russia started invading its neighbor last Thursday, Feb. 24.

In the U.S., companies pulled equity-capital-markets transactions valued at $1.17 billion in February, up from the $350 million in deals that were withdrawn a year before, Dealogic said…. “Looking at what’s getting done, my market is relatively closed,” said Josh Weismer, who heads the equity-capital-markets business at Mizuho Americas.

From the relatively closed, we move to the completely closed.

Russian authorities will keep the Moscow stock market largely closed for a fifth straight day, as they continue to shield local shares from potentially severe selling pressure.

“The FTSE Russell index business has removed Russian listings from its indices, the London Stock Exchange has suspended trading in (27) Russian listed securities,” London Stock Exchange CEO David Schwimmer told CNBC on Thursday…. Russia’s London-listed stocks had lost almost all of their value by the time the suspension was announced on Thursday. Sberbank was down 99.72% year-to-date to trade for around a single penny on Wednesday, while Gazprom was down 93.71%, Lukoil 99.2%, Polyus 95.58%, Rosneft 92.52% and EN+ 20.51%.

And it’s not just Russian stocks falling as fast as the reputation of the Russian Army.

One of Belarus’s bonds, a $600 million dollar-denominated note due 2027, changed hands at 14 cents on the dollar on Thursday, according to Tradeweb, down from around 87 cents on the dollar before the invasion…. “In Europe, no institutional investor will touch Belarus with a stick,” [Abrdn fund manager Victor] Szabo said.

No, but they will touch Russian ones at the right price.

“The dollar stuff is trading but at very distressed levels. Its sellers are wanting to get rid of it at any price, and there are some buyers willing to pick it up at these levels,” said Viktor Szabo, an emerging-market fund manager at Abrdn…. Wall Street banks have resumed trading of some Russian corporate bonds but are demanding trades settle a day faster than usual, said Phil Torres, an emerging-markets portfolio manager at Aegon Asset Management. “The dealers are trying to protect themselves in case there’s another event they’re not anticipating.”

Goldman Sachs Group Inc. and JPMorgan Chase & Co. have been purchasing beaten-down company bonds tied to Russia in recent days, as hedge funds that specialize in buying cheap credit look to load up on the assets, according to people with knowledge of the private transactions.

Which may be about the best that can be said for the prospects of the Russian economy at the moment.

Russia had been working to “sanction proof” itself in recent years by further paring down its financial ties to the West, including reducing its dependence on the U.S. dollar and other common reserve currencies…. But the disaster now rippling through the nation’s banks, markets and streets is evidence that autonomy is a myth in a modern globalized world…. Russia’s vulnerability to financial sanctions may be a sign that its policy of economic isolation — notably its limiting of trade ties — has backfired, Mr. Posen of the Peterson Institute said. Had Russia been more integrated in the broader trade system, inducing a financial crisis by applying sanctions would have been more costly to its Western trading partners, making this form of punishment a less attractive diplomatic tool.

And the Chinese, eternally friendly as they might be, aren’t quite prepared to help against the totality of the onslaught.

The first problem is that Chinese financial institutions have been less keen on the idea of banking Russian clients than their political leaders are…. “Chinese financial institutions are taking these sanctions seriously and being very careful about understanding what the risks are,” said Chen Zhu, a Hong Kong-based partner at Morrison & Foerster LLP. Due to the broad Western actions, “there’s now less room for Chinese companies and financial institutions to be doing business with Russian counterparts,” he said…. China’s Cross-Border Interbank Payment System, or CIPS, has been touted as a potential workaround as Russian banks get ejected from Swift. But analysts and lawyers say it isn’t fit for this purpose, at least yet.

Companies Scrap IPOs Amid Russian Invasion of Ukraine [WSJ]
Russia Holds Off Again on Reopening Stock Market [WSJ]
London-listed Russian stocks are collapsing, with trading now suspended [CNBC]
Belarus Sovereign Bonds Collapse Following U.S., EU Sanctions [WSJ]
Some Russian Bond Trading Defrosts as Investors Hunt for Deals [WSJ]
Wall Street Is Pouncing on Russia’s Cheap Corporate Debt [Bloomberg]
Russia Tried to Isolate Itself, but Financial Ties Called Its Bluff [NYT]
Why China’s Banks Won’t Come to Russia’s Rescue [WSJ]

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