Factbox: European stocks at risk if Russia invades Ukraine
18/02/2022 21:08
By Joice Alves
LONDON, Feb 18 (Reuters) - Russia-exposed European stocks
have been under pressure for weeks amid fears Russia could
invade Ukraine and the stand-off has triggered volatility across
the European stock market.
After Russian-backed separatists in breakaway regions in
eastern Ukraine announced an evacuation of residents on Friday,
Germany's main stock index .GDAXI , the most sensitive to a
potential conflict in Ukraine, fell more than 1% and headed
towards a four-month low hit earlier this week. urn:newsml:reuters.com:*:nL1N2US0M8
The United States has said Russia could invade Ukraine at
any time and might create a surprise pretext for an attack, and
reaffirmed a pledge to defend "every inch" of NATO territory.
urn:newsml:reuters.com:*:nL8N2UO06X urn:newsml:reuters.com:*:nL1N2UP0I6
Investors are monitoring shares most at risk from potential
sanctions against Russia, including banks, oil, mining, consumer
and construction material, companies with exposure to Russia and
Ukraine.
Citi analysts said their basket of European companies with
Russian exposure has underperformed during periods of heightened
tensions, as in 2014 and 2018, following Western sanctions
against Russia.
The investment bank's list of almost 40 European stocks with
exposure to Russia and Ukraine includes beverage companies
Carlsberg and Coca Cola, which made 13% and 15% of their sales
in Russia, Nivea maker Beiersdorf BEIG.DE and France's food
giant Danone DANO.PA , with around 6% of their sales in Russia.
European stocks with exposure to Ukraine include
London-listed iron pellet producer Ferrexpo FXPO.L with its
entire operation based in the country, Citi said.
According to Jefferies analysts, France's video gaming
company Ubisoft UBIP.PA has 4% of its workforce in Ukraine,
while Sweden-based healthcare and diagnostic services provider
Medicover MCOVb.ST made 8.5% of its sales in the country.
European banks with local branches in Russia are the most
exposed to risk resulting from potential sanctions in the event
of any further escalation, JP Morgan said.
Austria's Raiffeisen Bank International RBIV.VI derived
39% of its estimated net profit last year from its Russian
subsidiary, while Hungary's OTP, UniCredit CRDI.MI and Societe
Generale SOGN.PA made between 6% and 7% of theirs in Russia
last year, JPMorgan numbers showed.
As Russia supplies 35% of Europe’s gas demand, the tensions
in Ukraine have increased the risks of energy disruptions in
Europe, Goldman Sachs analysts said.
"We would expect the German DAX and MDAX (the mid cap index)
.MDAXI to be more vulnerable than other country indices,
mainly due to the reliance of their companies on energy for
their production," they said.
They expect oil and gas companies to outperform on headlines
of further escalation and rising European gas prices, citing
Total TTEF.PA and Equinor EQNR.OL as the main beneficiaries.
Note: The graphic above is Citi's full list, reprinted with
permission of Citi Research and not to be reproduced.
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Citi's basket of Russia-exposed companies https://tmsnrt.rs/34fgoYo
Select European stocks with Russia exposure https://tmsnrt.rs/3BuBNsU
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(Reporting by Joice Alves
Editing by Chizu Nomiyama)
((Joice.Alves@thomsonreuters.com; +442075422345; Reuters
Messaging: joice.alves.reuters.com@reuters.net))