RE: Illiquid15 Jul 2022 11:44
Ignore the state and government sanctions. They will ultimately be diluted but only as part of a complete Russian withdrawal to pre 2014 borders.
The serious damage comes from private companies that will simply not have anything to do with Russia. Logistics for example. Road, sea, rail and air transport will be severely disrupted still for many years post war and the cost will be prohibitive. Origin of goods is increasingly controlled and expected, and it doesn't matter whether a government sanctions a raw material or component, if someone like Unilever say no Russian polyvinyl then any company anywhere on the planet must comply with the company policy and so even in countries like India, China or BRICS, Russia will find no market for such a raw material. In years gone by focus has been on sanctions imposed by states. I think we are seeing a new form of NGO sanction which has worked to some extent in the activist community and is now being adopted in the corporate sector. Unless the indian government, for example, forces Unlever, for example, to buy PVC for bottling from Russia, Unilever is free to source elsewhere. Consumer pressure will force that as the atrocities are further revealed as if those revealed already were not enough.
For those thinking they just have to see out an inconvenient period on the naughty step and then all will be forgotten and forgiven, that is clearly not going to happen this time. MacDonald's is a very useful indicator of sentiment, philosophy and even economy in the modern world in some interesting ways. MacDonald's pulling out and abandoning tangibles in Russia is your indicator at how bad this is going to get. Now I know some will mock the basis for the argument using MacDonald's, butanybody wit half an ounce of business acumen knows exactly what dimension this is in.
Hence, POLY must dump the Russian assets and get the hell out before intrinsic association between POLY and Russia is made.