A court ruling of AFK Sistema, payout restrictions, from OAO Bashneft unit pushed RTS Index of Russia to arrive to a bear market. Russia’s dollar-denominated RTS Index had a 2.6 % drop while the benchmark Micex Index also went down at 1.8%.
Vladimir Evtushenkov, the person who controls Sistema, was placed under house arrest because of money laundering led to a major drop of stocks by 25%. The detention of the billionaire is looked at as the main reason why the stock lost too much, that’s 65%.
It has been a few days ago when the payout restriction on Sistema’s stake in Bashneft and according to the court ruling, the dividend payments will continue to be put in an escrow account until the result of the investigation comes out.
In London, the shares of Sistema went 29% lower while the preferred stock of Bashneft lost almost 6% by the close in Moscow. Early yesterday, trading has stopped for Sistema for half an hour on the Moscow Exchange. This is after the stocks went significantly low by 20% in just around ten minutes.
The declines in Russian RTS Index extended after the news of the unrest in Hong Kong. This lead to the falling of U.S. stocks which sparked the concerned of Federal Reserve for American spending figures.
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