An apparent suicide attack on one of Moscow’s two major international airports has left at least 31 people dead and another 130 injured. This is not unheard of in Russia but investors are on edge.
I’ve flown in and out of Domodedovo many times. This is clearly one of the worst bombings we’ve seen in Moscow in the last decade and is pushing most of the major Russian ADRs lower.
For Russia, these types of events are probably a bigger reality than they are in almost every other emerging market beyond the Middle East. The county is struggling with significant ethnic strife in the Caucasus and along the rest of its southern border with Central Asia — the reality is that the country has struggled very hard since the break-up of the Soviet Union to control its massive frontier.
While this does not necessarily challenge the investment case for Russia, it does bring home the reality that Russian politics are a lot more complicated than many traders would like to admit. This may be part of a new terror campaign, and after all, it was the 1999 Moscow bombings that gave Putin the platform to come to power in the first place.
The RTS sank 2% after the bombing and bounced a bit afterward, but was still down 1.5% by mid-morning New York time.
Most of the big ADRs as well as RSX (quote) made a similar move. Exceptions include VIP (quote) and CEDC (quote), which defied the downward trend, and media stock CTCM (quote), which suffered somewhat deeper losses and was slower to recover.