Regardless of sanctions or even a prolonged guerrilla war, Russia supplies Europe and the world with a lot of stuff they have to have.
Russia’s invasion of Ukraine has roiled markets around the world, few more so than its own.
Shares of the VanEck Vectors Russia ETF (RSX) – Get VanEck Russia ETF Report fell as much as 27%, to $13.77 Thursday in the wake of Vladimir Putin’s decision to launch a full-scale military invasion of Ukraine.
The ETF is off about 40% since the middle of February and is trading at levels not seen since the onset of the coronavirus pandemic two years ago.
Vladimir Putin’s long-telegraphed move has sent oil and gold prices surging, cryptocurrencies tumbling and U.S. markets on a roller coaster.
But if the adage to buy when there’s blood in the streets holds true, then Russia appears to be a tempting, albeit cynical opportunity.
Getty
Here’s the Case
The military outcome of the Ukraine conflict seems to be in little doubt.
Russian forces are squeezing the country from three sides and are driving to capture Kyiv, the political capital, and Odessa, the most important city economically.
Odessa is the only major port left to Ukraine following Russia’s annexation of Crimea in 2014, and is the logistical choke point for grain and other exports.
While the Biden administration and European leaders are talking about imposing sanctions, the threat doesn’t appear to trouble Putin much.
That’s largely because Europe is so completely dependent upon Russia for its energy needs. Not surprisingly, Gazprom is the single largest holding in the VanEck Russia ETF.
Beyond that, Russia and Ukraine are key sources of raw materials used in computer chip production— things like neon gas used in the lasers that etch patterns onto chips, for instance.
In addition, a substantial portion of the world’s platinum and nickel comes out of Russia — think catalytic converters and stainless steel inputs. No surprise, metals producers are also high on the list of VanEck Russia holdings.
Russia and Ukraine also account for a big chunk of the world’s wheat exports as well as basic steel products used in construction.
So, separate and apart from one’s feelings for democracy, justice and truth, putting something into a Russian ETF could potentially offer a chance for some short-term gains at the very least.
Help May or May Not Be On the Way
More than $360,000 in bitcoin has been donated to the Ukrainian army in the last day, industry publication Bitcoin Magazine reports.
But how it is being donated, where it is being deposited and how it will ultimately help the besieged Eastern European nation in its conflict with Russia remains unclear.
But the clarion call to help the Ukrainian war effort has been immediately clouded by imitators, with TheStreet unable to verify the the credentials of several major operations ostensibly collecting money on the country’s behalf.
