The Russian Stock Market Reopens To A Different Reality

Natural gas giant Gazprom, oil companies Lukoil and Rosneft and aluminum producer

Rusal International

saw double-digit percentage gains. One of the few decliners was Aeroflot, the Russian airline, which dropped 11%, which isn’t bad considering it was banned from flying in the airspace of the European Union, the U.K. and Canada.

Of course, like the news, this is a very different market than the one that had traded in February. Ahead of the reopen, short-selling was banned, and more importantly, foreigners were blocked from selling their shares.

The last time Gazprom traded in London, on March 3, its ADR was trading for 58 cents, which given the ratio to the underlying, and exchange rate moves, was the equivalent of 28 rubles per share. Gazprom was trading around 268 rubles in Moscow on Thursday. Lukoil traded at the equivalent of 58 rubles in London, and 100 times that in Moscow.

Surging inflation and a banking system on the ropes does at least make the stock market worth a consideration for locals, given the alternatives. But for now, Russia’s stock market is less a measure of valuation and more a testament to its alternative reality.

—Steve Goldstein

*** Join Barron’s senior managing editor Lauren R. Rublin and deputy editor Alex Eule today at noon as they discuss the outlook for tech companies and individual stocks. Sign up here.

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Ecolab
,
Emily Chew of Calvert Research and Management, Katherine Collins of Putnam Investments and others today at noon as they share insights on how to pick sustainable investments that deliver the returns and impact investors demand. Sign up here.

BlackRock
’s
Larry Fink Says Ukraine War Will End Globalization

BlackRock’s Larry Fink warned the Russia-Ukraine war has put an end to globalization and could accelerate the use of digital currencies, in his annual chairman’s letter to shareholders.

• “Russia’s aggression in Ukraine and its subsequent decoupling from the global economy is going to prompt companies and governments worldwide to re-evaluate their dependencies and re-analyze their manufacturing and assembly footprints – something that Covid had already spurred many to start doing,” Fink said.

• The conflict could also have implications for digital currencies as a means of enhancing international transactions, Fink added. “The war will prompt countries to re-evaluate their currency dependencies.”

• Fink said BlackRock has been studying digital currencies, stablecoins and the underlying technologies and added: “A global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption.”

What’s Next: Fink has articulated what many were already thinking. And he ends predicting the magnitude of Russia’s actions will play out for decades to come and mark a turning point in the world order of geopolitics, macro-economic trends, and capital markets.

—Rupert Steiner

***

More Vaccines Being Considered as Federal Covid Funding Dwindles

The Biden administration appealed to Congress to pass the requested $22.5 billion in funding for Covid-19 programs, saying depleted resources have forced it to cancel an order for monoclonal antibody treatments, scale back buying

AstraZeneca
’s
preventive therapies, and stop reimbursing the Covid care of uninsured people.

• If another round of shots or a variant-specific vaccine is needed, the U.S. might not have the money to pay for them. Congress removed the funding from the recent budget. “The virus is not waiting for Congress to act,” said White House coronavirus response coordinator Jeff Zients.

• 
  
  
  Moderna
  
  will seekFood and Drug Administration authorization for its Covid-19 vaccine for children six months to 5 years old, after data showing its vaccine induced a strong neutralizing antibody response in 6,900 participants. Their immune response was similar to that in vaccinated adults ages 18 to 25.

• Moderna said children who received two 25-microgram doses didn’t develop severe disease or heart inflammation or require hospitalization. If approved, the U.S. has enough doses to inoculate that population, Zients said.

• New Covid infections are averaging 28,600 cases a day, down 9% from last week, hospitalizations are down 23%, and daily deaths are down 26% to 900. While the BA.2 subvariant is increasing in some regions, the upticks are minor increases, health officials said at a briefing.

What’s Next: The FDA’s outside vaccine experts will meet April 6 to consider separate requests by Moderna and

Pfizer

to authorize fourth doses of their Covid vaccines. Pfizer said fourth shots should be administered to adults 65 and older, while Moderna wants all adults to be boosted.

—Janet H. Cho

***

Wall Street Bonuses Jumped to a Record $257,500 in 2021

The average Wall Street bonus jumped to a record high of $257,500 in 2021, boosted by low interest rates and a flourishing market for initial public offerings, according to estimates from the New York state Comptroller. The bonus pool rose 21%, to $45 billion last year.

• The IPO market fueled lower interest expenses and record fees related to underwriting, supervising, and advising newly public companies, the report said. The securities industry makes up one-fifth of private sector wages in New York City, and accounted for 18% of 2021 state tax collections.

• Global equity capital markets rankings for 2021 have

  
  
  
  Goldman Sachs
  
  as the top bank, with $3.90 billion in revenue, followed by

  
  
  
  JPMorgan Chase
  
  ($3.17 billion),

  
  
  
  Morgan Stanley
  
  ($3.15 billion),

  
  
  
  BofA
  
  Securities ($2.11 billion), and

  
  
  
  Citigroup
  
  ($1.93 billion), according to Dealogic.

• New York state Comptroller Thomas DiNapoli said profitability and bonuses are likely to be lower for Wall Street in 2022, because markets have started out the year with turbulence. That has choked off the IPO spigot. Recovery in other sectors is sluggish and uneven, and Russia is waging war in Ukraine.

• The average security industry salary of $438,470, including bonuses, was almost five times the $92,315 average salary in the rest of the private sector, the Financial Times reported. The security industry makes up 5% of private sector jobs in New York City.

What’s Next: “In New York, we won’t get back to our pre-Covid economic strength until more New Yorkers and more sectors — retail, tourism, construction, the arts and others — enjoy similar success,” DiNapoli said.

—Sabrina Escobar and Janet H. Cho

***

Amazon Faces Union Vote by Staten Island Warehouse Workers

Amazon.com

workers at the company’s largest Staten Island, N.Y., warehouse, begin voting Friday on whether to become the e-commerce firm’s first U.S. employees to join a union. The effort is spearheaded by current and former Amazon workers at the warehouse, and voting runs through March 30.

• A second vote at a different Staten Island facility takes place starting April 25. Pro-union leaders saythey want better pay, benefits and working conditions. Some warehouse employees protested working conditions during the pandemic, saying Amazon wasn’t doing enough to protect workers against Covid-19 as online orders surged.

• Amazon said it prefers negotiating directly with employees. “As a company, we don’t think unions are the best answer for our employees. Our focus remains on working directly with our team to continue making Amazon a great place to work,” Amazon spokesperson Kelly Nantel told Barron’s.

• Workers at Amazon’s warehouse in Bessemer, Ala., are mailing in ballots after a failed organizing effort last year. Amazon won that vote, with 71% of workers voting against union representation, but the National Labor Relations Board later said Amazon used unlawful influence over workers.

• Elsewhere, more than 500

  
  
  
  Chevron
  
  employees went on strike Monday at a refinery in California amid a stalemate over the company’s expired contract with the United Steelworkers Local 5 union. Workers at

  
  
  
  …