On 21 February, Russian equities dropped by 12% in USD terms. This has pushed their cumulative underperformance against other emerging market stocks to 34.8%. The last time we saw similar levels was at the peak of a crisis in December 2014; this lasted only for several days before a rebound began. The reason for this unusually sharp drop was President Vladimir Putin’s recognition of Lugansk People’s Republic (LPR) and Donetsk People’s Republic (DPR) as independent states in the evening and anticipation of this action throughout the day...