The week in investor relations: Russian stocks ‘uninvestable’ and SEC investigates climate risks
– MSCI will drop ‘uninvestable’ Russian companies from its emerging markets indices following the heavy sanctions placed on Russia’s economy, according to the Financial Times (pay wall). The decision came on Wednesday after a consultation with investors, stock exchanges and other market participants. In Russia, the central bank suspended stock and derivatives trading this week.
– Reuters reported that Shell will exit all its Russian operations, including a major liquefied natural gas (LNG) plant, becoming the latest major western energy company to quit the country following Russia’s invasion of Ukraine. Shell said in a statement it will quit the Sakhalin 2 LNG plant in which it holds a 27.5 percent stake, and which is 50 percent owned and operated by Russian gas company Gazprom.
– The Wall Street Journal (pay wall) reported that Apple, Ford Motor Co and Dell Technologies joined the roster of companies retreating from Russia, while other businesses warned of further supply disruptions following the country’s invasion of Ukraine. ExxonMobil said it was halting operations at a multibillion-dollar oil and gas project in Russia and would make no further investments in the country following its attack on Ukraine.
– Investors focused on ESG issues should not buy Russian assets, the head of asset manager abrdn said in an interview with the FT. ‘This is a good test for asset managers because they all say they are ESG investors, and frankly I don’t know how you could say you’re an ESG investor and stick with a country that invades its neighbor,’ CEO Stephen Bird told the newspaper. ‘This is where the rubber hits the road.’
– The WSJ reported that FINRA halted trading in the over-the-counter (OTC) market for several US-listed shares of Russian companies. The halt means traders can no longer place bets on the stock in the OTC market, in which banks often take the other side of trades. FINRA says on its site that it may halt trading if ‘an extraordinary event has occurred or is ongoing that has had a material effect on the market for the OTC stock or may cause major disruption to the marketplace or significant uncertainty in the settlement and clearance process.’
– The SEC is seeking more details from companies about their climate risks as it gets ready to propose new disclosure requirements on the topic, according to the WSJ. Many companies already share details on climate risks, but investors often find it hard to make comparisons. The agency last year sent at least 43 letters to US public companies on the matter, compared with none the previous four years, according to data from research firm Audit Analytics.
– CNBC reported BlackRock as saying that this proxy season it will make ‘pass-through’ voting – or what it calls ‘voting choice’ – available to shareholders representing roughly 40 percent of its $4.8 tn in index equity assets. ‘Our view is that the choices we make available to clients should also extend to proxy voting. We believe clients should, where possible, have more choices as to how they participate in voting their index holdings,’ BlackRock said.