Buy the dip: Investors profiting from the war in Ukraine

Even as western governments impose crippling sanctions on Russia and leading companies scramble to leave the country, a small band of opportunistic investors sees a bargain and is shrugging off any ethical qualms about profiting from the war.

Social media is awash with tips on how to “buy the dip” – that timetestetd investment adage – with DIY, or do it yourself, investors flocking to message boards and sharing ideas.

“For me it is a one [sic] in a lifetime chance to buy,” said an investor about stock in Russia-focused steel and mining group Evraz on the Reddit website on March 4.

Just six days later, Evraz’s London-listed shares were suspended after its biggest shareholder Roman Abramovich – owner of Chelsea Football Club – was sanctioned by the UK, meaning any investor who took a punt on the stock had their money frozen.

Despite the risks, Russia-focused investments have proved popular with retail investors even as the war has taken a heavy human toll – on both Russia and Ukraine.

Major investors have called Russia “un-investable”, but DIY investors – many of whom took up stock-picking during the pandemic – have been undeterred.

London-listed stocks of Russia-focused companies – including Abramovich’s Evraz and gold and silver producer Polymetal – have recently leapt into the most-bought stocks tables at several of Britain’s largest investment platforms, according to a review of their websites by Reuters.

Evraz stock plummeted 67 per cent prior to its suspension, and Polymetal is down more than 85 per cent since Russia’s invasion began on February 24.

Markets regulator the Financial Conduct Authority said it was monitoring the situation.

“Investors should take care when investing in companies that may be impacted by the Russian invasion,” the regulator said.

Evraz was one of the top five most bought stocks last week by customers on the AJ Bell, interactive investor (ii) and Hargreaves Lansdown platforms, prior to the stock’s suspension.

It was also the stock with the highest buy-to-sell ratio on the Freetrade platform. All four cater specifically to retail investors, non-professionals who trade securities through online platforms.

The UK has claimed in its sanctions that Evraz has helped provide financial support towards destabilising Ukraine and may have supplied steel used for the production of Russian tanks. Evraz denies the claims.

AJ Bell said Evraz holdings would remain in customer portfolios at the price it was suspended at, while ii said shares were being held until further information was available.

Polymetal was also one of the top 10 most bought stocks last week across the platforms reviewed by Reuters and was top of AJ Bell’s list.

The company is not subject to UK sanctions and its shares are still trading, although the stock was deleted from indexes by FTSE Russell on Monday after many brokers refused to trade its shares.

Polymetal has eight gold and silver mines in Russia. It makes most of its revenues in the country, and has said the situation in Ukraine is “horrifying and heartbreaking”.