😔Companies brace for impact from Russia sanctions

ECONOMY
Companies brace for impact from Russia sanctions

What’s going on?
The UK, US and EU are all preparing to implement even heavier sanctions on Russia after Russian forces invaded Ukraine by land, air and sea in the biggest offensive in Europe since the Second World War. 

Stock markets around the world – already jittery from the prospect of a conflict - fell sharply. The FTSE 100 suffered its worst day since June 2020, falling 3.9%, the German Dax index fell 4% and the Russian stock market plummeted 35%. 

Why is this important?

One day after the UK government unveiled a first wave of sanctions targeting a handful of Russian banks and billionaires, it’s upped the ante by announcing wider measures that will hit even more Russian banks, companies and wealthy people.

Large multinational corporations with operations are bracing themselves for the impact of sanctions:

Oil: BP and Shell all have significant investments in Russia that could be threatened by sanctions on Russia’s energy market.

Banks: JP Morgan, Deutsche Bank and Citigroup, which do business in Russia, would have to cut ties with local lenders if broad financial sanctions happen. Cross-border payments could be frozen, which might mean lost profits.

Beer: Danish brewer Carlsberg is Ukraine’s biggest beer seller, while Russia accounts for 10% of its sales. It has breweries in both countries and said it’s working on contingency plans in case sanctions disrupt beer-making.

Zooming out

CONSUMER
Yo! Sushi owner eyes London listing

The owners of fast-casual restaurant chain Yo! Sushi are gearing up for an initial public offering (IPO) on the London Stock Exchange later this year, according to reports from Sky.

Snowfox Group has lined up three investment banks for a listing as soon as next month and is hoping to achieve a valuation of £750m. The group has become a major international player in the Japanese food wholesale sector, selling more than 60m trays of sushi annually and supplying retailers such as Tesco and Asda in the UK.

Founded 25 years ago Yo! Sushi, known for its sushi conveyor belt, has 65 outlets across the world with most in the UK, During 2020 it was forced to slash the number of sites and jobs to cope with lockdown restrictions.

But 2022 could be a tough year to land an IPO. The ongoing volatility in the stock market will make investors nervous about parting with their cash given the uncertainty created by the Russia/Ukraine crisis.