Following the crash of Malaysia Airlines Flight MH17, believed to be downed by a surface-to-air missile, in territory controlled by pro-Russian separatists last week, both the U.S. and the EU are weighing sweeping new sanctions against Russia. The proposals include a potential ban on all Europeans purchasing any new debt or stock from the country’s largest banks, but not on Russian sovereign debt, according to a Financial Times report.
Some investors have already taken concerns over sanctions to heart. Nomura closed out its positions in the local bond market and Russian credit, with some losses expected, the bank said in a note earlier this week.
“We now expect the story to shift to sovereign risk from stagflation and disinflation as investors assess whether they should be invested in Russia at all,” Nomura said.
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