Uzbek Investors Withdraw 30% of Assets from Russian Brokerage Accounts Amid Sanctions Concerns
Uzbek Investors Reduce Assets in Russian Brokerage Accounts
According to a report by Kommersant citing data from the Central Bank of Russia, Uzbek investors have significantly decreased their assets held in Russian brokerage accounts. This reduction has been driven by concerns over secondary sanctions and limited availability of foreign currency trading.
As of the second quarter of 2023, the total number of non-resident accounts with Russian brokers grew by 2%, reaching nearly 30,500. However, assets in these accounts fell by 9.6%, totaling 1.77 trillion rubles ($18.4 billion). The increase in the number of accounts was mainly due to individual investors, while the decline in assets primarily affected corporate accounts.
The decline in assets, especially from Uzbekistan, is largely attributed to the June sanctions imposed by the U.S. against the Moscow Exchange, the National Clearing Center, and the National Settlement Depository. Legal expert Gleb Boyko from the law firm Nektorov, Saveliev & Partners explained that the sanctions have deterred foreign investors from holding Russian assets, prompting them to move their investments elsewhere.
Uzbek investors reduced their assets with Russian brokers by 30%, bringing the total down to 59.7 billion rubles ($621.4 million). Similar declines were also observed among investors from Kazakhstan, Azerbaijan, and various offshore jurisdictions like the British Virgin Islands, Panama, and Belize.
It was further reported by Kommersant that the withdrawn funds have been redirected to more favorable financial jurisdictions. These include internal Russian offshore zones, which experienced a 30% increase in inflows, as well as Hong Kong (+9%) and the Cayman Islands (+18%).
In June, the U.S. Department of the Treasury placed the Moscow Exchange on its Specially Designated Nationals (SDN) list, accusing the trading platform of supporting the Russian military through investments in sovereign debt, corporations, and defense enterprises. This move has evidently impacted Uzbek investors and others, leading to a shift in their investment strategies.
