Two companies are highlighted in the Russian crisis: Apple and Rosneft.
Apple, whose shares started to tumble in November, is now halting online sales to Russia. Apple is feeling the full consequence of the ruble’s slide, and rather than accept a currency that may soon have no value, the company has stopped sales. Alan Hely, a spokesman for Apple was reported in Bloomberg to say, “Our online store in Russia is currently unavailable while we review pricing. We apologize to customers for any inconvenience.”
Considered originally by the tech giant to be fertile ground, the Russian market is already causing problems for Apple. In summer 2014, Putin signed a new law regarding personal data, to be implemented from 1 January 2015. The law bans the usage of servers where personal data of Russians is stored, i.e. on the cloud. The data on iPhones and iPads is stored in California through the iCloud. Therefore Apple is due to feel the effects of the new legislation and possibly all Apple products are due to be banned to be in-line with the new law if Apple does not find a solution to storing Russians’ personal data.
Apple shares fell another US$1.41 yesterday, taking shares to 106.73.
MT4 chart: Apple
Rosneft, the majority government-owned Russian oil company, is also in the midst of a crisis of its own, both financially and politically. With falling oil prices, Rosneft is leaning on Putin’s government for aid - and is receiving it. As a rule, Putin is facing current problems with major Russian companies as they need the ruble to be strong to pay debts that are becoming more expensive every day. The foreign loans bill for this month is $30 billion; next year about $130 billion will be due. Rosneft is one such company that wants a bailout to refinance its foreign debt. Rather than interrupt revenue-dependent oil production developments, the central bank accepted Rosneft bonds held by commercial banks as collateral for loans, allowing Rosneft to issue 625 billion rubles.
According to analysts, it is this deal that set off the crash on Monday when the ruble fell against the dollar to 63.37 followed by the close of trade on the ruble.
Boris Y. Nemtsov, a former deputy prime minister now in the political opposition, wrote on his Facebook page, “The central bank started the printing press to help the Sechin-Putin business, and gave Rosneft 625 billion newly printed rubles. The money immediately appeared on the currency market, and the rate collapsed.”
Yesterday, before opening trading, the interest rate was raised to 17% and the ruble strengthened by 10%. It then fell more than 30%. Since this fall, the ruble has regained 20%.
MT4 chart: Rosneft
MT4 chart: USDRUB
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