Companies that exited Russia after its invasion of Ukraine are being rewarded with outsize stock-market returns, Yale study finds — and those that stayed are not

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The ~1,000 companies that have opted to pull out of Russia following its unprovoked invasion of Ukraine are not just benefiting from a reputational boost. They are also being rewarded by financial markets, while those who remain behind are being punished.

The almost 1,000 companies that have opted to pull out of Russia following its unprovoked invasion of Ukraine are not just benefiting from a reputational boost. They are also being rewarded by financial markets, while those who remain behind are being punished.

“‘Clearly, doing well has not been antithetical to doing good — at least when it comes to withdrawing from Russia.’” The Yale team used two end dates. The first was market close on Aril 8, as that offered a cutoff point before the start of first-quarter earnings season. That allowed the report to exclude the many other macro factors that were showing up in earnings, such as supply-chain snags and inflation, issues that led many companies to lower their analyst guidance.

“The pattern of F companies underperforming generally aligns with our anecdotal observations from updating the list in real-time,” they wrote. At least six multinationals that booked significant write-downs — Heineken HEIA, +0.50% HEINY, -0.42%, Shell SHEL, -0.65%, Exxon XOM, +1.45%, Carlsberg CARL.B, +0.28%, AB InBev ABI, +1.41% and Société Générale GLE, +0.06% — have seen far more wealth created than has been destroyed in aggregate.

“Our sweeping analysis of global capital flows demonstrates the importance investors attribute to the decision to withdraw from Russia — and that investors believe the global reputational risk incurred by remaining in Russia at a time when nearly 1,000 major global corporations have exited far outweigh the costs of leaving,” says the report.

 

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