Russian industry and export sectors are at maximum risk of bankruptcy, intelligence service reports

Ukraine’s Foreign Intelligence Service reports Russian industry and exporters face sharply increased bankruptcy risk after total losses reached $97.3bn (up 8.1%). Overdue wage arrears rose to $26.2m at end‑December 2025 (up 14.5% month, 130% year), with $22.1m due to firms’ own‑fund shortfalls; worst-affected sectors include coal, coke-chemical, metallurgy, tobacco and leather, while construction (23.7%), healthcare/social services (16.6%) and manufacturing (15.4%) show the highest arrears ratios. Under sanctions and the central bank’s tight policy, shrinking demand and liquidity stress are expected to drive more bankruptcies in 2026, and authorities are reportedly increasing property confiscations to plug war-related budget gaps.

Analysis

Contrarian angles: The market may be over-discounting all Russian assets—state-led asset purchases and selective guarantees could create cheap, long-term opportunities in large energy SOEs if investors can tolerate political risk; historical parallels are 1998/2014 where post-crisis recoveries delivered outsized returns to holders of energy and export champions. Reaction could be overdone for hard-currency earners with captive export markets—look for names with >60% FX revenue and minimal western counterparties. Unintended consequences: rising global commodity prices from reduced Russian supply could benefit non-Russian miners and fertilizer producers, creating asymmetric returns for those long outside-Russia commodity exposures.

Key Decisions for Investors

• Establish a 2–3% portfolio short via RSX (VanEck Russia ETF) or synthetic equity puts with 6–12 month expiries, target 30–50% downside; scale in after RUB weakens 5–10% from current levels or Russia 5Y CDS widens by 150bps.
• Buy 1–2% notional protection via Russia 5Y sovereign CDS (or equivalent sovereign bond puts) sized to offset corporate exposures; add if spreads widen >200bps; target exit when spreads compress by 200bps from peak.
• Initiate a pair trade: long 2% SLX (U.S. Steel ETF/steel miners) or global steel miners (e.g., XME/MT) and short 2–3% RSX to play global commodity tightening vs Russian domestic collapse; hold 3–12 months and rebalance on 20% relative move.
• Allocate 1–2% to gold bullion or GDX as insurance; increase to 3–5% if RUB drops >15% or global equities fall >10% (VIX-like spike).
• Reduce direct exposure to EM/EMEA industrial credit by 30% over 1 month (sell or hedge positions with 3–6 month credit protection) and redeploy into global energy/miner names with >60% FX revenue and limited Russian supply-chain links.