Russian stocks traded in New York fell the most in two weeks as President Barack Obama imposed financial sanctions on a wider swath of Russian officials, including billionaires close to President Vladimir Putin.
Russia’s incursion into Crimea has made Goldman Sachs Group Inc.’s job of improving the country’s image with overseas investors tricky. The bank’s own analysts reduced their growth forecast for Russia yesterday, saying the crisis will prompt companies to delay investment.
Bank Rossii poured dollars into the currency market, with traders estimating sales of about $10 billion, and raised interest rates after the threat of Western sanctions against Russia sent the ruble to a record low.
Russia’s credit risk is lower than markets are pricing in because the world’s biggest energy exporter has strong earnings from oil sales and a low debt burden in its favor, according to Goldman Sachs Group Inc.
Russian stocks rose to the highest level this year as Goldman Sachs Group Inc. said equities are its “preferred asset” in the nation, offsetting concern China’s slowing growth may crimp commodity demand.
Russia’s plans to spend $15 billion of its oil wealth buying Ukrainian bonds is a risky bet that is “becoming a concern of investors,” according to Clemens Grafe, Goldman Sachs Group Inc.’s chief economist in Russia.