Effects of financial meltdown on the Russian market

The main concern for the Russians is the declining price or oil and the value of the ruble

“Black Monday” for the ruble and the Dow Jones

Cheap oil and the weakening of the Chinese economy has caused panic on global markets

«Черный понедельник» для рубля и Dow Jones.

Photo: NEWS/Pavel Baranov

Izvestia,

24 August, 2015

Via Yandex Translate

August 24th will go down in the history of the world exchanges as "black Monday." In the morning it became clear that trouble is inevitable. Amid falling oil prices (the cost of the futures on Brent crude oil with delivery in October 2015 on today's trading on the stock exchange ICE in London fell by 2.62 per cent, to $44,27 per barrel is the lowest price since 2009) plummeted Asian indices. Chinese CSI300 — by 7.25%, the Shanghai Composite index of Shanghai stock exchange 7.4%, the ChiNext index — to 7.67 per cent. Index Hong Kong stock exchange in the first minutes after the opening fell by 4.2%. The collapse could not prevent even the attempt of the Chinese government to stabilize the situation with the help of investments from the pension Fund. On the Tokyo stock exchange Topix index fell by 3.86%, the Nikkei fell by 3.21%. The index of the Taiwan stock exchange in Taipei hit of 7.46%.

The Russian market is expected to have a sharp weakening of the ruble and a sharp decrease in quotations of the RTS and MICEX indexes. At the auction at the Moscow exchange, the dollar rose to 71,32 ruble and Euro for the first time since December 2014 has exceeded the value of 83 rubles. At closing, the MICEX index fell 1.9%, while the RTS index tumbled of 4.16%. The official dollar exchange rate reached its historical high — 70,75 of the ruble. The Euro tomorrow amounted 81,15 ruble — just a day, it rose by 4.5 rubles, a penny from a "record".

European stock markets ended the trading session, falling to minimum values over the past few years. British FTSE 100 has decreased by 5.8% to 5831,59 point — the worst result since 2012. The pan-European FTSEurofirst 300 index fell by 7.2%, German DAX — by 4.9%, the French CAC40 — 5.6%. Capitalization of companies included in the pan-European FTSEurofirst 300 index, one day lost more than €400 billion.....

24 августа войдет в историю мировых бирж как «черный понедельник». Уже утром стало понятно, что беды не миновать. На фоне дешевеющей нефти (стоимость фьючерса на нефть марки Brent с поставкой в октябре 2015 года на сегодняшних торгах на бирже ICE в Лондоне упала на 2,62%, до $44,27 за баррель — это самая низкая цена с 2009 года) резко упали азиатские индексы. Китайский CSI300 — на 7,25%, индекс Shanghai Composite Шанхайской фондовой биржи — на 7,4%, индекс ChiNext — на 7,67%. Индекс Гонконгской фондовой биржи в первые минуты после открытия понизился на 4,2%. Обвалу не смогла воспрепятствовать даже попытка китайского правительства стабилизировать ситуацию при помощи инвестиций из пенсионного фонда. На Токийской фондовой бирже индекс Topix понизился на 3,86%, индекс Nikkei упал на 3,21%. Индекс Тайваньской фондовой биржи в Тайбэе обрушился на 7,46%.

Российский рынок ожидаемо отреагировал резким ослаблением рубля и резким снижением котировок индексов РТС и ММВБ. На торгах на Московской бирже доллар поднялся до 71,32 рубля, а евро впервые с декабря 2014 года превысил значение в 83 рубля. По итогам дня индекс ММВБ упал на 1,9%, а индекс РТС обвалился на 4,16%. Официальный курс доллара обновил исторический максимум — 70,75 рубля. Курс евро на завтра составил 81,15 рубля — всего за день он вырос на 4,5 рубля, немного не дотянув до «рекорда».

Европейские фондовые рынки завершили торги, упав до минимальных значений за последние несколько лет. Британский FTSE 100 сократился на 5,8%, до 5831,59 пункта — худший результат с 2012 года. Общеевропейский индекс FTSEurofirst 300 обрушился на 7,2%, немецкий DAX — на 4,9%, французский CAC40 — на 5,6%. Капитализация компаний, входящих в панъевропейский индекс FTSEurofirst 300, за один день потеряла более €400 млрд.

‘Oilageddon’ is Nearing as Oil Producers Scramble for Last bits of Market

Sputnik News,

24 August, 2015

Amid dramatically falling global oil prices that dipped below $40 a barrel on Monday, oil producing states already started to fight over the oil market, trying to sell as much oil as possible further aggravating the situation, Muhammad As-Sayyad, the former head of Bahrain’s National Oil and Gas Authority (NOGA), told Sputnik in an interview.

The current drop in energy prices started last fall due to the oversupply of oil. Normally, when these kinds of situations occur, OPEC interferes and cuts global oil production. However, this isn't the case this time around — OPEC, led by Saudi Arabia, refused to decrease production, leading to a record amount of oil being pumped out of refineries despite the steady and ongoing decrease in prices.

This resulted in a free-for-all situation in which oil-producing nations refuse to sacrifice their own share of production for the sake of increasing global prices. And now, as prices keep falling, it has led to the struggle over the oil market and potential customers, as oil producers try to sell as much oil as they can, As-Sayyad explained.

The situation is expected to get worse considering that Iran, which has been recently freed from sanctions and thus has an extra quota of 4 million barrels a day, is looking to flood the oil market with more crude. There certainly are potential customers willing to buy Iranian oil and that would lead to an even further decrease in prices, the former head of NOGA told Sputnik.

Oil producing nations will be hit hardest by the current situation. Budgets of the Persian Gulf countries, for example, depend 80 percent on oil revenues (on average). Following the current drop in prices, it's clear that the future budget of these countries will suffer dramatically. They will either have to increase their non-oil revenues or significantly reduce their spending. Harsh austerity policies are expected to happen, As-Sayyad said.

Oil could fall to $25 per barrel by the end of the year

Нефть может упасть до $25 за баррель к концу года

Photo: NEWS

Founder and chief investment officer specializing in oil investment Fund Andurand Capital Pierre Anduran told "Izvestia" that sees the potential for reducing oil at the end of 2015 to $25-30 per barrel. It threatens the Russian currency falling below the level of 100 rubles per dollar.