Global investors are losing confidence in securities conected to companies and countries in conflict zones – Reuters

Global investors are losing confidence in securities associated with company stocks in geopolitical hotspots, following moscow's decision to delist russian depositary receipts from foreign exchanges in response to Western sanctions due to the war in Ukraine.

This is reported by Reuters.

According to the publication, moscow's actions have deprived many foreign investors of the ability to trade russian securities, including depositary receipts. Investors are concerned about the future actions of other governments that may try to reduce foreign influence on their leading companies.

Depositary receipts (DRs) are certificates issued by a bank representing shares of a foreign company traded on a local stock exchange. DRs mitigate currency and liquidity risks for buyers, who view them as one of the most reliable means of investing in companies in countries ranging from Brazil to China.

However, events in russia have prompted many investors to write off the value of depositary receipts of russian companies to zero, considering their inability to trade them. Investors and analysts are now wondering whether future geopolitical tensions could provoke a similar reaction from other governments, and whether these risks are accurately reflected in current prices.

Background. Mind previously reported that the kremlin intended to nationalise Yandex, but fears it might cause a 'brain drain' abroad.