Russian Richest Lost $13 Billion as Global Stocks Fell
The world’s 300 wealthiest people lost a combined $44.4 billion yesterday as global stocks tumbled the most in a month and the ruble dropped to an all-time low amid Russia’s growing military presence in Ukraine.
The day’s biggest losers were Gennady Timchenko and Leonid Mikhelson, who fell a combined $3.2 billion after OAO Novatek slumped almost 18 percent, according to the Bloomberg Billionaires Index, a daily ranking of the richest people on Earth. The two billionaires own almost half of Russia’s largest gas producer after Gazprom OAO.
“The Russian invasion of the Crimean peninsula has raised risk premiums for emerging market risk, geopolitical risk and risks to economic growth,” Gautam Batra, a London-based investment strategist at Signia Wealth Ltd., said by phone. “Even before the events in Ukraine, it was natural to expect some sort of volatility this week after a strong run into the end of February. One would have expected a correction or pull-back from the markets anyway.”
All of the Russian and Ukrainian billionaires on the ranking lost money, falling a combined $12.8 billion during the day. Ukraine said Russia threatened to seize its warships in Crimea amid the worst standoff between the West and Russia since the end of the Cold War. U.S. Secretary of State John Kerry will arrive in Kiev today.
The Russian benchmark Micex Index (OPNMICX) tumbled 11 percent yesterday, its biggest loss since November 2008. The index was up 5.8 percent to 1,363.71 at 4:25 p.m. in Moscow trading today.
Vladimir Lisin, the chairman of Lipetsk, Russia-based Novolipetsk Steel OJSC, the country’s most valuable steelmaker, lost $1.2 billion as the company retreated 7.1 percent. He has a net worth of $10.6 billion, down $3.9 billion year-to-date.
Lukoil chief executive officer Vagit Alekperov dropped $960 million after the Moscow-based company, which produces 2 percent of the global oil supply, slumped 9.2 percent.
Rinat Akhmetov, Ukraine’s richest person, lost almost $700 million. The billionaire owns System Capital Management JSC, the country’s largest industrial conglomerate. The Donetsk, Ukraine-based company had $23.5 billion in revenue in 2012, and has investments in metallurgy, mining and energy. It also controls a 71 percent stake in closely held Metinvest, the country’s largest steelmaker.
Bill Gates, the co-founder of Redmond, Washington-based Microsoft Corp., remains the world’s richest person. The 58-year-old tycoon’s fortune fell $527 million after the company’s newly appointed Chief Executive Officer Satya Nadella appointed former political operative Mark Penn to the new role of chief strategy officer, according to people with knowledge of the matter.
Gates recaptured the title of world’s richest person on May 16 from Mexican investor Carlos Slim. Gates’s fortune also includes stakes in Canadian National Railway Co., sanitizing-products maker Ecolab Inc. and Republic Services Inc.
Slim, 74, has a $63.5 billion fortune and is the biggest dollar loser so far this year. His net worth has fallen $10.2 billion year-to-date.
Warren Buffett, the world’s third-richest person, assured shareholders of Berkshire Hathaway Inc. that he has plenty of ways to deploy cash after posting record earnings in 2013.
In his annual letter to investors, posted March 1, Buffett highlighted how Berkshire’s energy unit will seek another takeover after its $5.6 billion acquisition of NV Energy Inc., and explained why a $12.3 billion investment to help take HJ Heinz Co. private was a template for future deals. The Berkshire chairman also discussed subsidiaries’ appetite to spend billions of dollars on smaller transactions, as well as equipment and plants.
“Though we invest abroad as well, the mother lode of opportunity resides in America,” Buffett, 83, wrote in the letter, referring to his company’s capital spending, which climbed to a record $11.1 billion last year.
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