DIY investors eye quick buck in uninvestable Russia. While the West’s major investors have fled Russia in recent weeks, Just one small group of armchair investors sees a deal and is disregarding any ethical concerns.
At a time when many people in the United Kingdom, are donating money to charity to help with relief operations in Ukraine. Meanwhile, others are attempting to benefit. And are providing recommendations on social media on how to ‘buy the dip.’
“For me, it’s a once-in-a-lifetime opportunity to purchase.” Started by one investor on the Reddit website on March 4. With regards to stock in Russia-focused steel and mining giant Evraz.
And then six days later, Evraz’s London-listed shares were halted when its largest stakeholder, Roman Abramovich, was sanctioned by the United Kingdom. Which meant that investors who bet on the stock had their money frozen.
Despite the hazards, Russia-focused investments have proven attractive among ordinary investors. Despite the war’s high human toll.
Russia describes its operations as a “special operation,” launching missiles on Friday at an airfield in Lviv. In a city where hundreds of thousands of people are seeking safety distance from Ukraine’s battlefields.
Major investors have labeled Russia “uninvestable.” But many do-it-yourself investors who began stock-picking during the pandemic’s “stocks” trading craze have not been discouraged.
According to a check on Reuter’s websites. London-listed stocks of Russia-focused firms. Including Abramovich’s Evraz – gold and silver producer Polymetal. Have lately jumped into the most-bought stocks lists at many of Britain’s top investing platforms.
And prior to its suspension, Evraz shares fell by 67 percent. While Polymetal has fallen by more than 85 percent. Since Russia’s invasion began on February 24.
“It’s insane to me to be playing with fire. Yet other individuals prefer to place bold bets.” “And that will never change.” Said Holly Mackay, the creator, and CEO of the personal finance website Boring Money.
The Financial Conduct Authority is the market regulator. Says to Reuters that it was keeping an eye on the issue.
“Investors should exercise caution. When investing in enterprises that may be affected by the Russian incursion,” the regulator said.
But then, prior to the stock’s suspension. Evraz was one of the top five most-bought equities. By consumers on the AJ Bell, interactive investor, and Hargreaves Lansdown platforms last week.
Furthermore, it had the greatest buy-to-sell ratio on the Free Trade platform. All four are geared toward individual investors. In other words, non-professionals trade stocks using internet platforms.
Even so, in its sanctions. The United Kingdom, claims that Evraz helped offer financial assistance to destabilize Ukraine. And may have provided steel used in the manufacturing of Russian tanks. In spite of that, Evraz disputed the allegations.
In addition, AJ Bell stated that Evraz assets will stay in customer portfolios at the halted price. It furthermore, stated that shares would be retained until more information was available.
Adding to that, Polymetal was also one of the top ten most purchased stocks. Last week, across all platforms, examined by Reuters and topped AJ Bell’s list.
The firm is not subject to U.K. sanctions, and its shares are still traded. However, FTSE Russell removed it from indexes on Monday after numerous brokers declined to trade its shares.
Polymetal, a leading precious metals mining group. Which owns eight gold and silver mines in Russia. That generates the majority of its revenue there, has described the situation in Ukraine as “horrifying and tragic.” And has advocated for a peaceful conclusion.
‘THEY MUST MAKE THEIR OWN DECISIONS.’
Retail investors have been a more powerful market force in recent years. As more platforms have introduced commission-free trading and stock pickers have gotten more outspoken on social media.
Online platforms are the fastest-growing segment, of the consumer investing business in the United Kingdom. With newcomers being considerably younger or first-time investors.
According to Mackay, the platforms may need to consider offering additional ethical filters. As more established investors did during the Ukraine crisis. But she cautioned against being overly rigid. Nonetheless, regulators have previously warned of dangers to retail investors. Notably in the aftermath of the Brexit vote in 2016 and COVID-19 lockdowns in 2020. However, as well as the suspension and eventual collapse of investor Neil Woodford’s flagship fund in 2019.
According to Hargreaves Lansdown and AJ Bell. They primarily provide a platform for clients to make their own financial decisions. And while keeping their ethical convictions in mind.
“Our responsibility is to assist informed customers. For them to make their own decisions.” Said Hargreaves Lansdown’s spokeswoman. Adding that the business was “horrified by this human tragedy” and was working with authorities.
Freetrade stated that it was monitoring the situation. And then, consulting with regulators. Plus contact consumers on a regular basis to educate them on the hazards of investing in Russian-linked equities.
Overview: DIY investors eye quick buck in ‘uninvestable’ Russia
Interactive investor, purchased by investment firm Aberdeen in December. Stated that the Russia-related trades were not reflective of a normal investor. And that it was working on ethical asset filters that were not Russia-specific.
“There will always be people who want to rely on excessive volatility,” remarked an Interactive investor representative. “This has always been the situation, and we are not here to pass judgment.”