Russian shares sank the most in more than three weeks after a court sentenced Alexey Navalny, an opposition leader and critic of President Vladimir Putin, to five years in prison.
The benchmark Micex Index (INDEXCF) reversed gains, trading down 1 percent at 1,416.89 by 12:57 p.m. in Moscow and snapping a five-day winning streak. The volume of shares traded on the Micex today was 120 percent above the 30-day average, data compiled by Bloomberg show, while 10-day price swings rose to 20.345, the most since June 27.
A judge in Kirov, 900 kilometers (560 miles) northeast of Moscow, handed down the sentence after ruling that Navalny defrauded Kirovles, a state-owned timber company, of 16 million rubles ($494,000).
Russia is ranked the most corrupt nation among the Group of 20 advanced economies in Berlin-based Transparency International’s 2012 Corruption Perceptions Index.
Navalny’s sentencing “shows once again that the Russian government is centralized and it fights the opposition,” Aleksei Belkin, who helps manage about $4.4 billion in assets as chief investment officer at Kapital Asset Management LLC in Moscow. “It reminds us about Russia’s political risks, which make the market so volatile.”
A few hours ago, in a somewhat ironic development, Russia’s most prominent opposition campaigner – whom some have likened to the US’ own Edward Snowden in terms of his whistleblowing aspirations – was found guilty of embezzlement and sentenced to five years in prison, some 19 months after leading the biggest protests to challenge the Kremlin’s rule since the Soviet Union’s collapse.
This immediately hit none other than the local “wealth effect” with RIA reporting that “Russia’s stock market fell sharply on Thursday according to Moscow Exchange data, after investors took in the news that opposition blogger Alexei Navalny had been found guilty in a controversial fraud trial and sentenced to five years in jail.”
The market’s immediate response was clear:
More from RIA:
The court in the city of Kirov, about 900 kilometers (560 miles) east of Moscow, found the vocal Kremlin critic guilty of organizing the embezzlement of about $500,000 worth of lumber from state-owned company KirovLes.
As of 1:21 p.m. Moscow time (9:21 a.m. GMT), the ruble-denominated MICEX index plunged by 1.51 percent on Wednesday’s close to 1,410.22 points while the dollar-denominated RTS index plummeted 1.50 percent to 1,372.15 points.
The conviction, unless overturned upon appeal, will prevent Navalny from running for public office, just a day after he registered his candidacy to stand in September elections for the Moscow mayor’s post.
Never heard of Navalny? You should – he may soon be living indefinitely in the transit terminal of JFK, if he manages to escape from Russia first of course.
Navalny, a whistle-blowing blogger well-known for leading mass protests against Russian President Vladimir Putin, has denounced the charges as politically motivated.
The founder of the anti-graft website Rospil and a shareholder rights campaigner, Navalny has in recent years sought to obtain documents via court rulings from a number of state-run companies, in a bid to make their activities more transparent. As a minority shareholder in state-run oil major Rosneft, Navalny attempted to get the company’s minutes of board meetings for 2009, and also copies of agreements on crude oil supplies to China.
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