Corporate move to divest from Russia continues to escalate
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Operating in Russia has become increasingly problematic, with the list of companies cutting ties with the country or reviewing their operations growing by the hour. Oil major Shell has joined BP and Equinor in walking away from Russian domiciled assets, leaving Exxon and TotalEnergies as the only energy majors to have significant operations in Russia. Corporations poured into Russia after the Soviet Union fell apart in 1991 - seeing a market full of natural resources and millions of new consumers - but the risks associated with the investment have now become apparent following the invasion of Ukraine.
The latest: Netflix (NASDAQ:NFLX) won't be adding Russian channels to its service under regulations that were to take effect today, while Warner Bros. (NYSE:T) pulled this week's release of The Batman from Russian screens. Disney has also paused theatrical releases in the country and said banking sanctions will cut into revenue from its popular Encanto soundtrack. Elsewhere, Facebook (NASDAQ:FB)-parent Meta and YouTube (GOOG, GOOGL) blocked access to Russian news outlets like RT, and Twitter announced that any link shared by a user to a Russian state media organization's website will automatically receive a label warning. High-quality tech can survive 'witch's brew' of Russia, Fed risks - Evercore analyst.
Meanwhile, Harley-Davidson (NYSE:HOG) and General Motors (NYSE:GM) are halting shipments to Russia, saying "thoughts are with the people of Ukraine at this time." Boeing (NYSE:BA) additionally paused operations at its Moscow training campus, while the world's biggest aircraft leasing firm, AerCap, put a stop to its Russian leases. Fresh sanctions have also seen Mastercard (NYSE:MA) block multiple financial institutions from its payment network and prompted global bank HSBC (NYSE:HSBC) to assess its operations in the country.
Banking clarification: "A sanction - which is very targeted and clean - says I cannot do business with you. A SWIFT thing says I cannot use a communication to do business with you, but I can still do business with you," JPMorgan CEO Jamie Dimon said during an interview with Bloomberg. "There are a lot of workarounds for SWIFT, so there are different tools we use for different reasons. Remember, the government itself wanted to have an open conduit for energy payments. So there are a whole lot of issues they have to work through." JPMorgan, Danske Bank halt trading of funds exposed to Russian assets