JPMorgan points to a possible 'Lehman Moment'

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'Markets may treat this as a Lehman-style shock'.

Russia’s equity markets may face a 'Lehman moment' if the Ukraine conflict deteriorates further, according to Alexander Kantarovich, head of research for JPMorgan Chase in Moscow.

'With the significant deterioration in the Ukrainian situation, markets may treat this as a Lehman-style shock,' Kantarovich wrote in an e-mailed report. 'Revisiting the post-Lehman lows would imply downside of 50% from an index perspective.'

Bloomberg News reports Russia’s ruble-denominated Micex Index has fallen 6.6% this year. The stock gauge posted the worst monthly drop in July since 2012 as the U.S. and the European Union escalated sanctions targeting Russia’s $2 trillion economy after the downing of a passenger jet on July 17 over Ukrainian territory controlled by pro-Russian insurgents.

The Micex lost 67% in 2008, the biggest decline among benchmarks in the 30 largest stock markets, as Lehman Brothers’ collapse triggered a global recession and foreign banks cut credit. It rebounded by 120 percent in 2009, data compiled by Bloomberg show.

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JPMorgan Sees ‘Lehman Moment’ for Russia If Ukraine Deteriorates

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