Ukraine stock market soars while Russian market drops
Ukrainian stocks are soaring this month while those in Russia plunge, deepening the divergence since the crisis between the neighboring countries began late last year.This is an interesting dynamic considering how Ukraine has lost territory. What it suggest is that the Russians will be dealing not only with sanctions but with new territory that will require an investment in time and money. It is still a surprising result at this point.
The UX Index of stocks traded in Kiev has surged 9.2 percent, the most among 93 stock gauges after Dubai’s benchmark, as the former Soviet republic prepares to receive the first installment of a $17 billion bailout from the International Monetary Fund. Moscow’s dollar-denominated RTS Index (RTSI$) has slumped 5.9 percent, the third-worst performance, amid concern that sanctions against Russia will push the country into recession.
“We’re yet to see the full impact of sanctions on the Russian economy while growth is already slowing,” Dmytro Tarabakin, a Kiev-based managing director at Dragon Capital Ltd., said by phone yesterday. “Ukraine’s economy is in bad shape, but there are signs it’s heading in the right direction.”