By our North American Correspondent.
ONE.
Sabre Corp. on Thursday said it terminated a global distribution agreement with Russia’s Aeroflot, crippling the country’s largest airline’s ability to sell seats.
The Texas-based airline software giant provides ticket distribution and reservation services for carriers around the world. Sabre’s decision to end the distribution agreement means Aeroflot’s flights won’t show up on online travel agencies or other third-party sites.
Sabre competitor Amadeus IT Group followed suit in suspending Aeroflot fares from its distribution platforms.
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“We will not sign any new contracts in Russia and we continue to evaluate our existing portfolio of work in Russia in parallel,” the Madrid-based company said in a statement. “At the same time, we continue to assess and evaluate the potential impact of international sanctions imposed on Russia and any counter-measures by Russia.”
Aeroflot didn’t immediately comment.
It is the latest measure that has isolated Russia’s airlines since the country invaded Ukraine last week.
Boeing, General Electric and other aerospace manufacturers have suspended parts distribution and service agreements with Russia as countries, led by the U.S. and European nations, impose sanctions in protest of Russia’s invasion. The U.S. and Europe have cut Russia’s access to their airspace.
“Sabre has been monitoring the evolving situation in Ukraine with increasing concern,” Sean Menke, Sabre’s CEO, said in a statement. “We are taking a stand against this military conflict. We are complying, and will continue to comply, with sanctions imposed against Russia.”
Sabre has a separate agreement with Aeroflot that allows the airline to book passengers on the SabreSonic platform on the airline’s website.
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“The Company will continue to monitor the ongoing situation and will evaluate whether additional actions would be appropriate, taking into account legal considerations and any counter measures that could be implemented in response,” Sabre said.
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TWO.
RUSSIAN STOCK EXCHANGE PLUMMETS.
The viral moment comes as Russian markets have now been closed for four straight days after the country’s invasion of Ukraine. This represents its longest stock market pause since 1998, according to Bloomberg.
On Wednesday, Equity index provider MSCI Inc. called Russia’s equity markets “uninvestable” as the U.S. and other western countries impose harsh sanctions against the country.
“The reclassification decision will be implemented in one step across all MSCI Indexes, including standard, custom and derived indexes, at a price that is effectively zero and as of the close of March 9,” MSCI said in the statement.
Large Russian companies like Gazprom RU:SIBN, Lukoil RU:LKOH and Sberbank RU:SBER, are now penny stocks as Russian companies collapse in London.
*Sberbank, which had assets of over $500 billion during parts of 2021, ~~~has a current stock price of $0.05~~ on the London~ stock Exchange LSEG, +9.64%.*
The ruble’s USDRUB, -0.46% value has also plummeted in recent weeks.
On Thursday, the Russian Stock Market Index dropped to new lows, wiping out more than $150 billion in value, after President Vladimir Putin ordered a “demilitarization” operation in Ukraine and targets were attacked across the country. The benchmark MOEX Russia Index is down about 50% from its October record high, making it the worst-performing stock market in the world this year, along with the dollar-denominated RTS. The invasion sparked a global search for safe havens, with investors fleeing equities all over the world.
Depositary receipts of the nation’s biggest lender, Sberbank of Russia PJSC, slumped 93% in London on Wednesday, while the state-run gas giant Gazprom PJSC fell 97%. Rosneft Oil Co. tumbled 70% and Lukoil PJSC declined 98%.
The largest U.S.-listed exchange-traded fund tracking Russian equities, VanEck Russia ETF, slumped 19% in U.S. premarket trading today, while Lyxor MSCI Russia UCITS ETF erased earlier gains to trade 0.3% lower in Paris.
As much as half of Russia’s international reserves may have been frozen abroad as punishment for Putin’s invasion of Ukraine. In response, the central bank has introduced capital controls and banned foreigners from selling securities locally, effectively shutting the exits for investors. European Union ambassadors have also agreed to exclude seven Russian banks from the SWIFT financial-messaging system.
Index Deliberations
The closure also comes as global index compilers deliberate how to treat the country’s equities as sanctions reverberate across Russia’s financial markets.
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MSCI Inc. is seeking feedback from market participants on the appropriate treatment, and a reclassification could trigger an exodus of $32 billion. The S&P Dow Jones said separately that no equity securities listed in or domiciled in Russia will be added to its benchmarks.
Meanwhile, the MVIS Russia Index, the gauge tracked by VanEck Russia ETF, is being frozen at its current state and new shares in the iShares MSCI Russia ETF will be “temporarily suspended” until further notice.
Read
Russia Keeps Stock Trading Shut in Nation’s Longest Closure
- Stocks trading to remain shut in Moscow until at least March
The Russian stock market will be closed to trading until at least next Wednesday, marking a record in the country’s modern history, in a continuing bid to stave off the impact of global sanctions for domestic investors.
The Moscow Exchange said on Friday that trading across all markets will be shut March 5, 7 and 8. Since the Moscow Exchange’s equity trading was last open a week ago, Russian stocks listed in London erased more than 90% of their value before getting suspended, global index providers announced plans to remove the nation’s shares from their indexes and European companies with business exposure to the country lost more than $100 billion in market value.
Additional inputs by Deepak Bora.