BlueBay: Commentary on rising Russia-Ukraine tensions

February 24, 2022

Tim Ash, Senior Emerging Market Sovereign Strategist at BlueBay Asset Management, has provided the below comment regarding the escalation of events overnight between Russia and Ukraine.

"We took the warnings in November from Western governments seriously as to risks of a Russian attack on Ukraine and reduced exposure across all our funds. We still see the situation as incredibly worrying and uncertain. We expect major Western sanctions on Russia which will continue to weigh on its asset performance. Sanctions will increase borrowing costs, subdue investment and growth and crimp living standards."

"The outlook for Ukraine is highly uncertain. If a new regime is imposed on Kyiv from Moscow that administration is also likely to face crippling sanctions and it will make its assets almost uninvestible. Contagion risk are significant to Emerging Europe and Turkey in particular. Higher energy prices will risk stagflation globally and energy importers globally are likely to suffer disproportionately."