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Client Update - 25th February 2022

Russia has invaded the Ukraine in a move that is probably more based on Putin’s legacy than protecting Russian borders from NATO or access to warm water ports for the Russian Navy. For Vladimir Putin the Ukrainian breakaway from the Russian Federation after the breakup of the old Soviet Union has evidently been playing on his mind for some time. First, he worked out a way to annexe the Crimea in 2014 without upsetting the Western Alliances too much to stop trading with Russia, and this has now come full cycle with the terrible full-scale invasion and loss of life in Ukraine.


The war is raging not only on soil, but also on the web. The websites of several key Ukrainian organisations and banks have become inaccessible as a result of carefully co-ordinated cyber attacks and further Distribution Denial of Service (DDoS) attacks have shut down official websites. DDoS attacks are designed to knock out websites by flooding them with a huge number of access requests until the website crashes. DDoS attacks were seen in Georgia and the Crimea during the incursions in 2008 and 2014 respectively.


What can be done? In these early hours we hear of restrictions to capital markets for Russia, Germany halting approval of the Nord Stream 2 gas pipeline and the freezing of Russian assets around the world. From an investment point of view, we remain vigilant on our client’s behalf and grateful for our previous decision to increase commodities exposure in our portfolios as oil / energy and gold have proven strong defenders of capital in the last few days. There is nothing further to do at this moment in time from a trading point of view, other than watch, wait and hope for a quick resolution and as minimal as possible a loss of life.


This conflict will surely push energy prices higher, which will hit already hard-pressed consumers after a recent inflation spike. But, for now, our thoughts are with those defending their families and their country.

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