Saturday 11 October 2008

Russian Billionaires US$230b Poorer

Russian billionaires from aluminium magnate Oleg Deripaska to football-club owner Roman Abramovich lost more than US$230 billion in five months during the nation’s worst financial crisis since the 1998 default on its debt.
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Guanyu said...

Russian Billionaires US$230b Poorer

Bloomberg
11 October 2008

Russian billionaires from aluminium magnate Oleg Deripaska to football-club owner Roman Abramovich lost more than US$230 billion in five months during the nation’s worst financial crisis since the 1998 default on its debt.

The combined wealth of Forbes magazine’s 25 richest Russians tumbled 62 per cent between May 19 and Monday, based on declines in the equity value of traded companies and analysts’ estimates of closely held assets they own.

The loss is four times larger than the fortune of the world’s wealthiest man, Warren Buffett.

Moscow’s benchmark Micex index fell 61 per cent since its peak in May.

The global credit seizure, war with Georgia and falling commodity prices led foreign investors to pull US$74 billion out of Russia since the start of August, according to BNP Paribas.

While Russia’s 1998 default and devaluation of the rouble eradicated savings for most of the population, this year’s losses are wiping out the fortunes of its richest citizens.

“There was a massive transfer of wealth into the hands of the oligarchs in 1998,” said Mark Mobius, an executive chairman of Templeton Asset Management, which has about US$30 billion in emerging-market stocks. “Now it’s going the other way.”

United Rusal’s Mr Deripaska, the richest Russian on the list, lost more than US$16 billion and in the past week ceded stakes in Hochtief and Magna International.

Chelsea Football Club owner and Evraz Group shareholder Abramovich lost US$20 billion, based on assets excluding property and cash.

The biggest loser has been Vladimir Lisin, an avid hunter and head of Russia’s Shooting Club, whose 85 per cent stake in Novolipetsk Steel lost US$22 billion in value in the period.

Novolipetsk rival Evraz declined 83 per cent, shrinking founder Alexander Ambramov’s fortune to US$2.2 billion from US$13.4 billion.

Russia’s biggest steelmaker, Severstal, also declined, cutting the wealth of chief executive and majority owner Alexei Mordashov to US$5.3 billion.

“They should take us all off the Forbes list,” said Alexander Lebedev, ranked 39th by the magazine in May with US$3.1 billion of wealth.

Mr Lebedev, who owns 30 per cent of state-run airline Aeroflot, said the rhetoric by the Kremlin over the conflict in Georgia was responsible for 40 per cent of the stock market’s drop in August.