Ruble is dead
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H2O defends big Russian rouble bet as it expects short war
H2O Asset Management has defended an outsized bet on the Russian rouble that has left its investors with substantial losses, telling them it does not expect Vladimir Putin’s invasion of Ukraine to develop into a lengthy conflict.
The wager on the rouble marks out H2O, a former star of the European asset management industry that has lurched from crisis to crisis in recent years, from many investors who have cut their exposure to Russia since Putin sent troops into Ukraine two weeks ago.
Its flagship Multibonds is now down 40 per cent from the middle of February, having lost 9.5 per cent in a single day on Monday, as the rouble continued to slide against the dollar. ln a video address to investors on Tuesday, H2O’s chief investment officer Vincent Chailley said that the firm had no plans to exit its bet because it expects the currency to rebound, according to people who watched the film. Chailley said that H2O’s “central scenario” is a “negotiation [between Russia and Ukraine] that will start in the coming weeks”. “Putin knows and said very consistently what he wants to achieve,” he added, before explaining that H2O would adjust the portfolio if there was a further “escalation” in the conflict. H2O confirmed Chailley’s remarks but declined to comment further.
Multibonds had exposure to the Russian rouble through derivatives that were equivalent to over 48 per cent of its €1.9bn in assets on January 31, just weeks before Russian tanks crossed the border into Ukraine. The group’s determination to stick with its rouble bet comes as Russia’s invasion entered a 14th day, marked by bombardment of Ukrainian cities. Bill Burns, the CIA director, told Congress on Tuesday that Putin would probably “double down” on his push into Ukraine.
H2O Asset Management has defended an outsized bet on the Russian rouble that has left its investors with substantial losses, telling them it does not expect Vladimir Putin’s invasion of Ukraine to develop into a lengthy conflict.
The wager on the rouble marks out H2O, a former star of the European asset management industry that has lurched from crisis to crisis in recent years, from many investors who have cut their exposure to Russia since Putin sent troops into Ukraine two weeks ago.
Its flagship Multibonds is now down 40 per cent from the middle of February, having lost 9.5 per cent in a single day on Monday, as the rouble continued to slide against the dollar. ln a video address to investors on Tuesday, H2O’s chief investment officer Vincent Chailley said that the firm had no plans to exit its bet because it expects the currency to rebound, according to people who watched the film. Chailley said that H2O’s “central scenario” is a “negotiation [between Russia and Ukraine] that will start in the coming weeks”. “Putin knows and said very consistently what he wants to achieve,” he added, before explaining that H2O would adjust the portfolio if there was a further “escalation” in the conflict. H2O confirmed Chailley’s remarks but declined to comment further.
Multibonds had exposure to the Russian rouble through derivatives that were equivalent to over 48 per cent of its €1.9bn in assets on January 31, just weeks before Russian tanks crossed the border into Ukraine. The group’s determination to stick with its rouble bet comes as Russia’s invasion entered a 14th day, marked by bombardment of Ukrainian cities. Bill Burns, the CIA director, told Congress on Tuesday that Putin would probably “double down” on his push into Ukraine.
Poor H20..
The rubble will not rebound. No resultful negotiations will happen. The war will end only in case of Russian total political collapse.
The rubble will not rebound. No resultful negotiations will happen. The war will end only in case of Russian total political collapse.
A BlackRock hedge fund suffered big losses for its clients in February after the fund increased its wager on Russian stocks just before the country invaded Ukraine, according to a Bloomberg report.
The BlackRock Emerging Frontiers Fund lost more than 10% in value last month, said the report, which cited people with knowledge of the matter and an investor document seen by Bloomberg.
The plunge stung even more for the hedge fund given that its Russian stock bet was already a loser in January, before it increased its exposure to the country.
The hedge fund's bet on Russia stocks accounted for about 9% of its total gross assets, and the positions have since been written down to zero.
The fund, which managed $960 million at the end of January, was down about 7% so far this year, according to the report. Insider reached out for comment from BlackRock but did not receive a response in time for publication of this article.
Driving the thesis behind the hedge fund's bullishness on Russian stocks was the idea that they were undervalued relative to other global stock markets, that the ruble was undervalued, that Russian bonds had posted solid returns, and that the country had a large current account surplus.
"We traveled to Russia at the end of January to assess the situation on the ground given our large net long position there. We believe the risk/reward of being long Russian equities is favorable relative to the risk we see of conflict," the hedge fund told clients in a letter before the country invaded Ukraine.
And even after Vladimir Putin launched attacks against Ukraine, the hedge fund's head, Sam Vecht, told investors he increased its bet on Russian stocks even further, likely seeing extreme value in the already beaten-down shares.
The BlackRock Emerging Frontiers Fund lost more than 10% in value last month, said the report, which cited people with knowledge of the matter and an investor document seen by Bloomberg.
The plunge stung even more for the hedge fund given that its Russian stock bet was already a loser in January, before it increased its exposure to the country.
The hedge fund's bet on Russia stocks accounted for about 9% of its total gross assets, and the positions have since been written down to zero.
The fund, which managed $960 million at the end of January, was down about 7% so far this year, according to the report. Insider reached out for comment from BlackRock but did not receive a response in time for publication of this article.
Driving the thesis behind the hedge fund's bullishness on Russian stocks was the idea that they were undervalued relative to other global stock markets, that the ruble was undervalued, that Russian bonds had posted solid returns, and that the country had a large current account surplus.
"We traveled to Russia at the end of January to assess the situation on the ground given our large net long position there. We believe the risk/reward of being long Russian equities is favorable relative to the risk we see of conflict," the hedge fund told clients in a letter before the country invaded Ukraine.
And even after Vladimir Putin launched attacks against Ukraine, the hedge fund's head, Sam Vecht, told investors he increased its bet on Russian stocks even further, likely seeing extreme value in the already beaten-down shares.
Very few things the west said about the situation in Russia came true so far.
All actions taken like sanctions and arming Ukraine, definetely made the situation worse for everyone but the lord of wars: politicians and arm dealers.
Ukraine is the battle ground between Russia and USA/UK.
Europe in general has been, since the end of ww2:
Revolutions and coupe first, followed by terrorists attacks (political murders and bombing), to hacking and bio warfare, all brought to you by our allies and foes, with help of domestic secret service and far right extremism.
If God exists (which I doubt unfortunately) most politicians, lords or war and people with blood on their hands should rot in hell for eternity.
All actions taken like sanctions and arming Ukraine, definetely made the situation worse for everyone but the lord of wars: politicians and arm dealers.
Ukraine is the battle ground between Russia and USA/UK.
Europe in general has been, since the end of ww2:
Revolutions and coupe first, followed by terrorists attacks (political murders and bombing), to hacking and bio warfare, all brought to you by our allies and foes, with help of domestic secret service and far right extremism.
If God exists (which I doubt unfortunately) most politicians, lords or war and people with blood on their hands should rot in hell for eternity.
what a BS is said above...!
1. It is a war started by Russia against Ukraine - a sovereign country. Not a RU/USUK conflict... Ukrainians are fighting not British or US soldiers...
2. The only good and fast way of this - is to help Ukraine win this war as fast as it should be. Or Putin and his russians will kill another thousands of people as they did in Ichkeria, Georgia, Syria and Ukraine.
I do not know what country you, cesfx live in. But next time when Russia or something similar will attack your country - you can surrender and die from repression, follow your logic, stay on the course...
1. It is a war started by Russia against Ukraine - a sovereign country. Not a RU/USUK conflict... Ukrainians are fighting not British or US soldiers...
2. The only good and fast way of this - is to help Ukraine win this war as fast as it should be. Or Putin and his russians will kill another thousands of people as they did in Ichkeria, Georgia, Syria and Ukraine.
I do not know what country you, cesfx live in. But next time when Russia or something similar will attack your country - you can surrender and die from repression, follow your logic, stay on the course...
Ruble did not rose. Russian central bank just froze all market operations and is declaring a better course. But nobody in the world now can sell rubles for the "official" rate. And the real market rate is something around 150-170 rubles per 1 usd
Another one thinking Ukraine can or will win this war...
Are Ukrainian fighting with those molotov we saw on tv, or they are using western weapon, money and training?
If they fought without the western support, they would probably be done by now.
I think eventually Ukraine will concede, at least Donbass. They will redraw the map, and a lot of blood from both sides will be spelled in the name of national security (from Russia) and sovereignty (from Ukraine).
To answer you last doubt, politically I don't care much about the country I live in or the one I am from.
It would be sad to see it destroyed and to see people dying, as it is sad to see this tragedy in Ukraine.
If I am not happy with one country, I move out. If mine gets attacked, I will be a refugee somewhere else. But I would not fight like a puppet for someone else gain, on my skin. This is not 1700 or 1938.
I am glad I am not Ukrainian with a president who bans men from choosing to fight or fly, or Russian, with a president who murders, lies and send kids to kill, or from the USA where even school kids murder each other like it's an ordinary day and wars are ordinary business.