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Russia’s wealthiest people were already feeling the squeeze from the escalating tension between their nation and Ukraine.
It got much worse for their net worth after Russian President Vladimir Putin’s decision to invade Ukraine. In less than 24 hours, they lost $39 billion — more than they had lost up to that point this year.
The damage was across asset classes. Russia’s benchmark MOEX Russia Index closed 33 per cent lower in Moscow, the fifth-worst plunge in stock market history in local currency terms.
It marked the first time since 1987’s Black Monday crash that a decline of that magnitude hit a market worth more than $50bn.
Meanwhile, the UBS Group triggered margin calls on some wealth management clients that use Russian bonds as collateral for their portfolios after cutting the lending value of some debt from the country to zero. The Swiss wealth manager says it caters to half of the world’s billionaires.
A handful of billionaires, including Gennady Timchenko, are also subject to penalties for their ties to Mr Putin, although there are calls to widen the list of potential targets.
“There are a lot of people in the US and Europe who want to hit them directly,” Chris Miller, co-director of the Russia and Eurasia programme at Tufts University’s Fletcher School, said of Russian billionaires. “I don’t think there’s any good news in the sanctions for them.”
Lukoil chairman Vagit Alekperov suffered the sharpest decline, with his net worth slashed by about a third in a day, falling by about $6.2bn to $13bn, according to the Bloomberg Billionaires Index.
Shares of the Moscow-based oil producer slumped by about 33 per cent on Thursday.
Alexey Mordashov, chairman of steel maker Severstal, lost $4.2bn, bringing his fortune to $23bn.
Vladimir Potanin, president of Norilsk Nickel and currently Russia’s richest person, lost $3bn.