Shares in Russian companies plummet on United States sanction fears

Will Rusal default on some liabilities due to new sanctions

Shares of United Company Rusal Plc fell 40 percent in Hong Kong on Monday after it was included in the new list.

In total, 12 companies had sanctions imposed for profiting from a Russian state engaged in "malign activities".

The fall represented a loss of more than 3.5 billion euros ($4.3 billion) for the company, which is headed by billionaire Oleg Deripaska, and which accounts for some seven percent of the world's aluminium production. "The situation is pretty egregious from the point of view of legality, it tramples on all kinds of norms, and so a thorough analysis is necessary", he said.

It was noted that Oleg Deripaska, a Russian oligarch, lost the most. Other magnates hit by sanctions include Alexei Miller, director of state-owned energy giant Gazprom.

The company earlier said that it regretted its inclusion on the new USA sanctions list, adding that its advisors were studying the situation, Reuters reported.

"Rusal will probably have to be bailed out by Russian state banks", wrote analysts at TS Lombard.

The Kremlin spokesman, Dmitry Peskov, said Moscow was watching events on the markets closely but that an assessment of the impact of the sanctions would take time. The Russian ruble dropped 3% against the U.S. dollar and the euro.




Evraz, the steel company controlled by the Chelsea football club owner Roman Abramovich, was the biggest faller in the FTSE 100, dropping nearly 15%.

The sanctions also hit Norilsk Nickel, whose shares were down 16 percent. It said further evaluations were being carried out to assess the impact of the sanctions.

"US investors have to sell their interests in Rusal and En+ among others by 7 May".

As Russia's currency and capital markets dipped on delayed response to Friday's U.S. sanctions against a handful of Kremlin-friendly billionaires, one vital metal used across the globe in aircraft manufacturing and the auto industries is soaring today.

The sanctions, the latest USA effort to punish Moscow for "malign activity around the globe", also affect 17 senior Russian government officials.

On Friday Russia's foreign ministry said there would be a "tough response" to the sanctions.

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