Belarusian President Alexander Lukashenko confirmed the arrival days after negotiating an agreement to end the mutiny, which saw Prigozhin’s Wagner forces come within 200km of Moscow. Putin earlier said his country had averted a “civil war”.

Latest developments

• Wagner chief lands in Belarus as Putin says ‘civil war’ averted
• Russia drops mutiny case against Prigozhin as Putin honours deal
• ECB urges banks to speed up plans to exit or shrink Russia units
• Putin blasts Wagner ‘traitors’ as Prigozhin defends revolt
• Xi’s bet on Putin looks even more risky after Russian mutiny

Morgan Stanley bet on Ukraine’s debt returns 47% in three months

A bet on exotic Ukrainian debt warrants held by Morgan Stanley Investment Management is offering some of the biggest returns across emerging markets in the space of three months.

A short-lived mutiny in Russia lifted Ukrainian assets this week on bets that any disarray among Russia’s top brass could benefit President Volodymyr Zelensky’s efforts to support the economy and carry out a counteroffensive. That upswing in prices included the GDP warrants — originally born from a 2015 debt restructuring — which Morgan Stanley has been holding, according to a disclosure earlier this year.

The $3.2-billion in August 2041 notes, whose payouts are linked to economic growth, jumped to 40 cents on the dollar this week from 27 cents at the end of March. The bonds were quoted at 38 cents on Tuesday. Morgan Stanley bought some of the notes, according to quarterly ownership data on Bloomberg dated 31 March.

Ukraine’s sovereign dollar bonds beat other emerging markets and as a whole have returned more than 30% this quarter, with most of the gains registered in June, according to data compiled by Bloomberg. Corporate bonds also generated the best returns in their category. Emerging-market sovereign dollar debt returned 1.8% in the same period.

Wagner chief lands in Belarus as Putin says ‘civil war’ averted

Belarus’s president said Yevgeny Prigozhin had arrived in his country, as Vladimir Putin said Russia averted “civil war” after the mutiny by fighters loyal to the mercenary leader.

President Alexander Lukashenko said on Tuesday that Prigozhin had flown into Belarus, in line with an agreement that he’d negotiated with Putin and the rebel chief to end the revolt that came within 200km of Moscow.

Putin repeatedly thanked the army and security services for support in televised meetings on Tuesday as he moved to restore his authority that had been battered by the weekend crisis.

“You in fact prevented a civil war,” he told 2,500 troops assembled at a Kremlin ceremony. “In a difficult situation you acted clearly and coherently.”

His comments appeared at odds with the ease with which Prigozhin and his troops crossed 780km of Russian territory over 24 hours, blockading army units along the way without significant resistance. Prigozhin called a halt to the advance late on Saturday after accepting the deal that Lukashenko brokered.

Putin was later shown telling a group of soldiers that the state budget had fully financed Wagner’s operations. More than 276 billion roubles ($3.25-billion) went on salaries and insurance for Wagner forces in the year through May as well as on payments to its owner’s company for supplying food and catering for the army, he said, without mentioning Prigozhin by name.

“I hope that no one stole anything, or, let’s say, stole just a little, in the course of this work,” Putin said. “But we will of course look into all this.”

Russia’s Federal Security Service announced earlier on Tuesday that it had closed a criminal investigation into Wagner over the armed uprising that spiralled into the biggest threat to Putin’s 24-year rule. That was also part of the agreement that Putin had approved.

The Defence Ministry in Moscow said preparations had begun to transfer heavy weaponry from the mercenaries to units of the Russian army.

Bulgaria pledges direct weapon sales to Ukraine after U-turn

Bulgaria’s new government will seek to eliminate intermediaries in providing weaponry to Ukraine to boost military support to Kyiv in a shift from the stance of previous Cabinets and the country’s president.

The Balkan state is now emerging from a political crisis that led to five elections in two years, and a fragile coalition is changing tack from governments appointed by President Rumen Radev — a US-trained air force general who has repeatedly faced accusations by his political rivals of taking pro-Kremlin stances.

Previously, weapons — and particularly munitions for Soviet-area artillery pieces — had made their way to Kyiv’s troops, but through third countries.

“Only the children that never watch TV haven’t understood that we export ammunition for Ukraine,” Defence Minister Todor Tagarev, who took office three weeks ago, told reporters on Tuesday. “That was done semi-secretly, which required intermediaries.”

Tagarev said that allies that use intermediaries when purchasing from Bulgarian companies can keep doing so, but Bulgaria would also enter into contracts directly with Ukraine.

Lukashenko will ‘help’ Wagner mercenaries

Lukashenko said he would “help” Wagner mercenaries at their own expense if they decide to spend some time in Belarus, the state-run Belta news service reported. He also raised the prospect of discussing Wagner becoming a unit within the Belarusian military.

While a significant part of Russian nuclear arms has already been delivered to Belarus, Lukashenko ruled out that the group would be taking part in guarding them.

The group is looking to set up some camps in Belarus, but so far “they are in Luhansk in their camps,” Belta cited Lukashenko as saying.

South Africa reinforces neutral stance

South African Foreign Minister Naledi Pandor made clear after talks with her German counterpart that the armed rebellion by Wagner group mercenaries would not alter her country’s neutral stance on Russia’s war on Ukraine.

“My understanding is: There isn’t a mutiny, there was an attempted mutiny,” Pandor told reporters at a joint news conference with Annalena Baerbock in Pretoria on Tuesday. “It will not affect our intention of continuing to engage with both” Russia and Ukraine, she added.

McCarthy says Putin looks weaker after rebellion

US House Speaker Kevin McCarthy said that the challenge to Putin from the Wagner group showed that he has become “isolated” and “slow to make decisions”.

In an interview on Tuesday on CNBC, the California Republican said that Putin in the past would never have allowed Prigozhin to become powerful enough to mount a mutiny against the Russian government.

“Prigozhin was very public for the last month or so criticising Putin severely like nobody else has done,” McCarthy said. “He threatened many different ways. The Putin of old, Prigozhin would have fallen out a window or something. This would have never sustained itself.”

Pope Francis sends peace envoy to Moscow

Pope Francis is sending an envoy to Moscow in an effort to foster what the Vatican called “gestures of humanity” that could eventually help end Russia’s war on Ukraine. Cardinal Matteo Maria Zuppi will visit the Russian capital on Wednesday and Thursday and Corriere della Sera newspaper reported that he would meet the head of Russia’s Orthodox Church and Russian government officials.

“The primary purpose of the initiative is to encourage gestures of humanity, that may contribute to promoting a solution to the tragic current situation, and to find ways to reach a just peace,” according to a Vatican statement.

Orban plays down mutiny impact

Hungarian Prime Minister Viktor Orban said the Wagner mutiny won’t have any impact on the course of the war and dismissed the idea that Putin has been weakened.

“If someone speculates that Putin might fail or be replaced, then they do not understand the Russian people and Russian power structures,” Orban was quoted as saying by Germany’s Bild newspaper in an interview.

“The structures in Russia are very stable,” he added. “They are based on the army, the secret service, the police, so it is a different kind of country, it is a military-oriented country.”

ECB urges banks to speed up Russia exit 

The European Central Bank (ECB) is pushing lenders from the region that still have operations in Russia to accelerate plans to shrink or exit units there.

Read more: ECB urges banks to speed up plans to exit or shrink Russia units

The ECB recently “urged these banks to speed up their downsizing and exit strategies by adopting clear road maps” and regularly reporting on progress to their management bodies and the watchdog, according to Andrea Enria, who leads the ECB’s Supervisory Board.

Poland’s Orlen replaces Russian oil 

PKN Orlen signed an oil delivery deal with BP four months after Russian supplies via the Druzhba pipeline to its Polish refinery were unexpectedly halted.

Poland’s sole refiner will buy as much as six million tonnes of oil from BP over one year under the contract, it said in an emailed statement on Tuesday. The new agreement will supplement its current long-term deals with Saudi Aramco, which supplies just under 50% of the company’s needs since last year.

Oil edges higher after choppy session 

Oil edged higher on Tuesday after a choppy session following the short-lived armed uprising in Russia, a major Opec+ producer.

West Texas Intermediate futures climbed toward $70 a barrel after closing 0.3% higher on Monday.

Russia conducts flight exercises over Baltic 

Tactical flight exercises of warplanes including the Su-27 fighter were being held over the Baltic Sea, the Russian Defence Ministry said.

The exercises were aimed at testing the readiness of flight crews to conduct special tasks and the capabilities of aviation equipment, the ministry added. DM