Page 11 - bne Magazine Apri20

bne April 2020 Companies & Markets I 11
Russia 2020 stocks by sector weekly performance YTD returns %
believe the flow momentum should start stabilising in the coming weeks, with huge ongoing volatility in prices, but we reiterate our negative short-term call for now.”
Bond funds were also hit, but not as badly, thanks to Russia’s rock solid fundamentals. Russia-dedicated bond funds lost $20mn in the same period to March 18, which was twice the $10mn they had lost a week earlier. The combined bond funds saw c$760mn of outflows in the last week vs the $380mn that left the previous week.
“The week for EM bond funds was unprecedented in terms of absolute outflows – GEM bond funds lost $12.3bn of investor money, c3% of assets,” says Smolyaninov. “In relative terms, it was the third worst week in history, trailing only two weeks in October 2008 (outflows of 3-4% of AUM) when Lehman collapsed and triggered a global flight to liquidity. Effectively, the combined flows figure for Russian bonds was also a record negative... We see more outflows ahead and remain tactically negative on bonds too.”
Russian banker Tinkov of TCS Group posts GBP20mn in bail, fights extradition to US on tax fraud charges
bne IntelliNews
Court hearings for Oleg Tinkov, the founder and main shareholder of the TCS Group, will take place in London in February-April 2020 after the billionaire posted GBP20mn as bail.
Tinkov is charged with underreporting his income at the time when he gave up his US passport and the US Internal Revenue Service initiated the case as those that give up their citizenship have to pay an “exit tax” based on the net worth at the time, the bank announced.
As reported by bne IntelliNews, TCS operates Russia’s only pure online bank Tinkoff and its capitalisation topped $5bn in London last month. The bank’s investment case is seen as solid, as it has transformed from credit card monoliner into an ecosystem of financial and lifestyle services.
Currently TCS is the only banking stock to have weathered the sell off at the end of February on the back of fears of
a coronavirus pandemic to have made a small return YTD. Tinkov has a 40% economic stake in TCS and is reportedly under scrutiny for potential tax issues, including false tax returns and under-reporting his 2013 income, when he gave up his passport.
Reportedly Tinkov paid GBP20mn in bail to avoid arrest and is fighting extradition to the US and also faces an airport ban.
“The lack of details on the potential tax issues provides
a wide range of outcomes, including the potential forced sale of Tinkov’s shares,” BCS Global Markets commented on March 2, seeing this scenario, however, as only a minor negative.
TCS' main shareholder is under scrutiny after the group most recently announced investing in the fintech project launched in Europe by two of its managers, the first inter- national expansion of TCS, potentially competing with such fintech providers as Monzo, Revolut and N26.
www.bne.eu