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EU may impose a complete ban on government bond trading in Belarus

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Reuters: global investment funds feel uncomfortable because of the "bloody" government bonds of Belarus

Reuters reporters analyzed the situation with the state bonds of Belarus after the hijacking of the Ryanair plane and the kidnapping of Roman Protasevich and Sophia Sapega. The main thing from the material:

  • According to the manager of one of the investment funds, more and more companies fear reputational losses [due to the purchase of Belarusian government bonds]. He argues that you can’t talk about ESG (Responsible Investing) and invest in a really bad market participant;

  • Jens Munk Holst, CEO of the Danish pension fund AkademikerPension: "Through our investments in government bonds, we are linked to the actions of the country, because we provide it with capital";

  • several major holders of Belarussian Eurobonds said that the hostage-taking of Protasevich and Sapieha sparked new disputes both within companies and among clients of investment funds;

  • Federico Kaune, senior portfolio manager at UBS Asset Management, said everything depends on sanctions. According to the manager, investment funds will have to re-assess the risks and make a decision after the measures will be introduced by the European Union. Federico himself considers two scenarios possible. The first is a ban on the purchase of new government bonds of Belarus. The second scenario is a variant of the restrictions adopted against Venezuela. In this case, a complete ban on Eurobond trading in Belarus will be introduced.

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