EU sanctions against Russia are good opportunities for local businesses

It is official now, the EU approved a prolongation of its sanctions against Russia through January, 2016

It was not a big surprise given that the sanctions are linked to the Minsk agreements which are to be implemented until December, 2015. A lot has been said in the media about the losers of this situation, so we would like to highlight a few winners. These are mainly businesses that have a chance to gain market share vacated by their European and American peers. Import substitution is the buzzword in Moscow these days. Companies that produce meat, fruit and other food have a unique opportunity to grow their operations as imports are restricted by Russia’s so called anti-sanctions. Investments in capacity expansion make more sense especially if you know that your competitors are kept away not just for six months but for a long period of time. Similarly, local producers of oil field equipment have a chance to try to develop their analogues of formerly imported products, now that the sanctions are here to stay for an extended period. The outlook for local banks is mixed, but on the positive side, the strongest of them get a chance to obtain new customers by refinancing their foreign loans. As always, there is a flip side to every coin.

Pavel Laberko – Head of Russian Equities – Union Bancaire Privée UBP