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Market Commentary | The week that was

Updated: Jul 13, 2022

Global markets have focused on the invasion of Russia into the Ukraine causing global uncertainty in most financial markets. The price of oil leaped to over $100, as Russia’s invasion of Ukraine disrupts global energy supply.

Meanwhile, BP Plc moved to dump its shares in oil giant Rosneft PJSC, taking a financial hit of as much as $25 billion by joining the campaign to isolate Russia’s economy. ”The surprise move from the British company is the latest sign of how far Western powers are willing to go to punish President Vladimir Putin for his invasion of Ukraine. BP has been in Russia for three decades and just weeks ago was staunchly defending its presence there,” reported Moneyweb (27 Feb 2022).

The conflict between Russia and the Ukraine will also have an impact on the global food chain as these two countries combined account for roughly 30% of the world’s wheat exports, 80% of sunflower oil exports and 20% of maize exports.

On Thursday last week, the Russian stock market index declined by 33% in Roubles, and 41% measured in US Dollar. The impact on the South African Stock market has been felt through increased short-term volatility, on the same day the JSE All Share sold off 1.7%. Gold and silver bullion, gold miners and energy producers are expected to be the beneficiaries of the invasion.

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