MOSCOW: Billions of dollars in cash is at risk of being trapped, stock funds are bleeding, and capital controls are choking off money flows. Russia has all the hallmarks of an uninvestable market.

       Russia-focused equity funds have tumbled 23% on average in the past week, with one Lyxor Asset Management exchange-traded fund cratering as much as 65%, according to data compiled by Bloomberg. Almost US$13bil (RM55bil) of the Russian stocks owned by United States and Europe-based funds is now in sanctioned companies, Bloomberg Intelligence estimates, while Russia itself has banned brokers from selling securities held by foreigners.

       Russian bonds have also plummeted, with yields on some of the nation’s biggest dollar debt doubling this month. Trading the ruble has become a Herculean task with brokers stepping back from dealing with the currency.

       The blizzard of sanctions placed on the country in response to President Vladimir Putin’s invasion of Ukraine is causing money managers to fear that the financial damage will last for years.

       Index providers are also reassessing the country’s accessibility with MSCI Inc seeking feedback on whether to remove Russia from its stock and bond indexes.

       “The calamity of Russia’s war in Ukraine has put an end to international financial investing in Russia,” said Christopher Granville, managing director for Europe, the Middle East and Africa and global political research at TS Lombard in London.

       The decision to block brokers from executing foreign investors’ sell orders was “the final blow,” he said.

       In fixed income, BlackRock Inc, Capital Group Companies and Legal & General Group Plc are the top holders of Russia’s dollar debt and investors have about US$250bil (RM1 trillion) tied up in bonds issued by Russian companies, according to data compiled by Bloomberg.

       Foreign investors hold as much as US$86bil (RM360bil) of Russian equities, the Financial Times reported, citing data from the Moscow Exchange. The website of the exchange isn’t accessible currently.

       US-listed VanEck Russia ETF, among the largest passive funds with exposure to Russia and the iShares MSCI Russia Capped ETF both slumped close to 30% on Monday alone. — Bloomberg