Putin - What Does He Want and How Does That Affect the Equity Trading Industry?

As traders try to navigate the impacts of the war in Ukraine, attendees of TradeTech Europe had the opportunity to listen to the expert Sir Tony Brenton in his keynote speech as he explained what Putin wants and what direction he is taking the world.

Sir Tony Brenton, former British Ambassador to Russia, served over 30 years with the British foreign service. This included postings in the Middle East, the European Union, Washington DC and Russia. He was in charge of the British embassy in Washington through the Iraq War and was the British Ambassador to Russia from 2004-08. There wasn’t a spare seat in the room when he got up to speak.

Hitting the ground running, Brenton began by saying “I feel slightly out of place among you all here today but I am here to remind you of the geo-political dragon that hides in the basement. It is slowly waking up and the impact will be severe”. In simpler times of the USSR breakdown, politicians across the globe were promising no more war. The current Ukrainian war showcases that that period of holiday is now over. We now face the threat of nuclear power with political turmoil at every turn. The economic impact, as a result, will undoubtedly be massive.

As there is so much on the line, Brenton asked the question: Why Ukraine? Well, that can be taken back a thousand years ago to the glorious memories of when Russia, Ukraine and the surrounding countries were united. This fragments in the 14th century and sees a 400-year war from the west, east and south that come to occupy that part of the world. The outcome is that Ukraine splits essentially down the middle between Russia and Western Europe.

However, the links between Russia and Ukraine couldn’t be closer. Therefore, when Ukrainian independence comes to the surface in 1991, a crossroads is reached and relations with Russia become awkward. As Russia repeatedly falls into the model of big man-dominated politics, Putin picks up this awkwardness when he comes into power in the 2000s.

Sir Brenton, who has had many interactions with Putin over the years, describes his character as “tough, contained and unspontaneous with a slight vindictive streak.” Putin believes in Russian greatness and strongly believes this includes Ukraine. He viewed the threatened possibility if Ukraine joining NATO as treachery and hence the beginning of even more hostility.

The invasion of Ukraine was a disaster for many reasons but mostly due to President Zelenskyy's ability to be a great wartime president, western backing and support and the incompetency of the Russian army. Russia has been bogged down by the war and understands that they have already lost while the West has managed to provide support without any direct contact. However, Sir Brenton revealed that Putin is determined to reach the best of a bad bunch of outcomes.

There are large impacts on the horizon for traders but not are all as they would seem. Firstly, with sanctions against Russia, although a large number of assets are frozen, Russia is pretty much going on as normal. What needs a road map of development is how to overcome issues surrounding the Western assets that have been frozen as a result.

Secondly, the money that Russia has lost has fallen straight into China’s pocket. This is a growing concern in a fragmented European market and will require a roadmap for heads of trading to navigate this change in power.

Lastly, there is the looming threat of nuclear war hanging in the background since the beginning of the war. It will continue to sit in the background as Russia emerges massively diminished and angry. Additionally, the economy has taken a massive hit due to Western support and continues to face massive rises and falls, the unpredictability traders face will only continue for the foreseeable future.

In the words of Sir Tony Brenton “This is a bit of a mess. However, I see a positive outlook. With unpredictability, comes the opportunity to innovate and develop resilience in a fragmented market.”

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