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Russia's rich see more than $230b wiped out in five months
(China Daily)
Updated: 2008-10-11 08:52 Russian billionaires from aluminum magnate Oleg Deripaska to soccer-club owner Roman Abramovich lost more than $230 billion in five months during the nation's worst financial crisis since the 1998 default on its debt. The combined wealth of Forbes magazine's 25 richest Russians tumbled 62 percent between May 19 and Oct 6, based on the equity value of traded companies and analysts' estimates of closely held assets they own. The loss is four times larger than the fortune of the world's wealthiest man, Warren Buffett. Moscow's benchmark Micex stock index declined 61 percent since its peak in May. The global credit seizure, war with Georgia and falling commodity prices led foreign investors to pull $74 billion out of Russia since the early August, according to BNP Paribas SA. While Russia's 1998 default and devaluation of the ruble eradicated savings for most of the population, this year's losses are wiping out its richest citizens' fortunes. United Co Rusal's Deripaska, 40, the richest Russian on the list, lost more than $16 billion and in the past week ceded stakes in Hochtief AG and Magna International Inc. Chelsea FC owner and Evraz Group SA shareholder Abramovich, 41, lost $20 billion, based on assets excluding property and cash. The biggest loser has been Vladimir Lisin, 52, an avid hunter and head of Russia's Shooting Club, whose 85 percent stake in OAO Novolipetsk Steel lost $22 billion in value in the period. "They should take us all off the Forbes list," said Alexander Lebedev, ranked 39th by the magazine in May with $3.1 billion of wealth. Mikhail Prokhorov, 43, sold his 25 percent stake in OAO GMK Norilsk Nickel to Deripaska's Rusal for an undisclosed amount in April, just before nickel prices began to slump. The value of that stake plummeted from $13 billion on April 24 to $3.38 billion on Oct 6. Prokhorov received $7 billion in cash as part of the Norilsk transaction, the Kommersant and Vedomosti newspapers reported then, citing unidentified people familiar with the deal. "Crisis time is a peak for opportunities," Prokhorov said. "An absolute peak." Russia's Micex and RTS stock exchanges delayed the opening of trading on Friday on the orders of the market regulator. It was unclear when trading would start, a spokesman for Micex said. The RTS will not resume stock trading until "further notice", the bourse wrote in an e-mailed statement. "You can now buy the free float of the entire Russian energy sector with the market cap of Coca-Cola, and still have change to buy all the Russian banks," Merrill Lynch & Co emerging markets equity strategist Michael Hartnett said in a note to clients on Friday. The unprecedented loss of wealth may set the stage for a new round of asset redistribution, said Pavel Teplukhin, president of Troika Dialog Asset Management in Moscow. Agencies |
