Sberbank CIB made a revision of anti-Russian sanctions after the Brexit

A British exit from the EU might have a positive effect on the Russian financial markets, write to analysts Sberbank CIB Andrey Kuznetsov and Cole Axon. Brexit can split the position of European countries on the issue of anti-Russian sanctions, they indicate. Of the three unofficial leaders of the European Union — Britain, Germany and France — the first was the most steadfast supporter of the sanctions regime. “Even though technically the UK will stay in EU for at least another two years, its influence in the EU is likely to decrease significantly based on the outcome of the referendum,” reads the report.

Britain itself is likely to continue to apply sanctions against Russia in the bilateral mode, along with the United States, analysts say.

Possible mitigation or cancellation of sanctions against Russia over a referendum in the UK on Friday commented on the press Secretary of President Vladimir Putin, Dmitry Peskov. According to him, the Kremlin did not link the withdrawal of Britain from the EU, with a possible easing of sanctions against Russia. “There are very different points of view in the European Union against the sanctions policy. Different countries in varying degrees are interested in developing trade and economic relations, perceive no alternative to good relations with Russia”, — said Peskov.

Current sanctions against Russia will expire on July 31. On Tuesday, June 21, the permanent representatives of the EU approved the extension of sectoral sanctions for six months, until the end of January 2017. It is, in particular, the sanctions against Russian state companies of oil and gas, financial and defense sectors. A formal decision was to approve the foreign Ministers of EU countries on Friday, 24 June.

Later, however, Italy demanded discussion on this issue at the summit of the European Council on 28-29 June. During a visit at the international economic forum in St. Petersburg, Italian Prime Minister Matteo Renzi promised that Italy will not allow automatic renewal of sanctions against Russia.

Kuznetsov and Axon in his review noted that the risks Brexit commercial relations of Russia with the UK is minimal, and therefore direct implications in the long term will be limited. Russia exports to the EU are mainly primary commodities, for which demand is relatively stable against the background of instability in the EU, experts remind. “At the same time, the Russian stock market will be under pressure as it belongs to the category of emerging markets with a high beta coefficient. We also do not exclude that the British referendum can affect the actions of macrofungal, which last year relied on the recovery of the fundamental indicators of the Russian economy. A British exit from the EU gives them plenty of other trading opportunities, so they can close their the Russian position,” — warn Kuznetsov and Axon.