, the Ministry reported on its Facebook page. Coming after last week’s settlement of the government’s $1.25 billion Eurobond issue at a historically low interest rate of 6.876%, yields were virtually unchanged yesterday. Unchanged were 6-month bonds at 9% and 1-year bonds at 11.2%. Three-year bonds moved up two basis points, to 12.3%.
the NBU said. The following amendments were introduced: “transactions to distribute income on and redeem Eurobonds as well as other issuer transactions for the purpose of placing such securities were removed from the list that is subject to a EUR 2 million annual limit; foreign currency can be bought to be deposited on the own account of the issuer with a Ukrainian bank until the maturity date of liabilities under Eurobonds.”
, the Ministry of Finance announced on Friday. Joint Book runners included BNP Paribas, Deutsche Bank, Goldman Sachs International and JP Morgan. “The funds were transferred to the account of the State Treasury of Ukraine and will be used for general budgetary purposes,” said the Ministry.
reported Bloomberg. The benchmark was 7-7.25%, but demand was almost three times supply, pushing down the final interest rate, reports Interfax.ru.
. Warrants jumped from 102.5% to 104.4%, and Eurobonds rose by 0.8-2.3 percentage points, depending on maturity dates.
to 7.98%, and on 1-year bonds by one basis point, to 10.74%. To sell $34.6 million worth of 2-year bonds, the Ministry raised the yield by 10 basis points, to 11.8%, according to the Ministry’s website. In general, the weighted average rate at yesterday’s auctions fell to 10.67%, from 11.64% one week ago. Last week, the Ministry sold the equivalent of $232 million, reports ICU.
Yuriy Gusev, Ukroboronprom’s director general, yesterday signed $1 billion worth of agreements and contracts in the United Arab Emirates with the country’s two leading military equipment manufacturers, the EDGE Group and Tawazun Economic Council. “We are delighted with the opportunities for the UAE and Ukraine to cooperate, exchange and benefit from the military and the technical capacity of the two countries,” said EDGE CEO Faisal Al Bannai, according to Zelenskiy’s presidential website.
Nicknamed “Little Sparta” by former US Defense Secretary James Mattis, Sunni-dominated UAE is a close ally of Saudi Arabia and faces Shia Muslim Iran across the Strait of Hormuz. Government-owned EDGE specializes in drones, long range missiles, cyber defense, and electronic warfare. It has 12,500 employees and $5 billion in annual revenues. The Stockholm International Peace Research Institute ranks EDGE 22nd in its list of world’s largest arms companies. SIPRI researcher Pieter Wezeman writes: “EDGE is a good illustration of how the combination of high national demand for military products and services with a desire to become less dependent on foreign suppliers is driving the growth of arms companies in the Middle East.”
With the UAE’s Hope probe now in Mars orbit, Ukrainian space and high tech companies could contribute to boosting bilateral trade, Zelenskiy said yesterday in a meeting with Sheikh Muhammad bin Zayed Al Nagayan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. The two countries vowed to increase trade “several times” from the 2019 level of $1.65 billion. Zelenskiy said high level Ukrainian delegations are coming to the Emirates for two big trade fairs that open Sunday – Gulfood in Dubai, and IDEX, or the International Defence Exhibition and Conference, in Abu Dhabi.
“Ukraine can and will become a guarantor of food security in the Emirates,” Zelenskiy told WAM, the Emirates News Agency, shortly after arrival on Saturday. “We are among the world leaders in the export of wheat, corn and barley.” With a population of 10 million, the Emirates has an economy three times bigger than Ukraine’s, but imports 85% of its food — $2 billion worth last year. Last year, Ukraine exported $252 million worth of food to the UAE. Zelenskiy noted that Ukraine’s pavilion at the World Expo that opens in Dubai in October will be shaped like a 15-meter high sheaf of wheat. He said: “The yellow color on our flag symbolizes the wheat field and readiness to contribute to world food security.”
The six-month Expo ideally will promote Emirates investment and tourism in Ukraine, Zelenskiy said. In 2019, 250,000 Ukrainians flew to Dubai, the Emirates’ largest city, using four airlines – flydubai, UIA, SkyUp and Air Azur Ukraine. Zelenskiy said 15,000 Ukrainians live in the Emirates and 200 Ukrainian companies have offices there.
The European Investment Bank will lend €270 million to rebuild Boryspil airport’s 50-year-old western runway, the EU bank announced Friday at its Luxembourg headquarters. In addition to replacing the obsolete 3,500 meter long concrete runway, the 20-year loan will go to improving de-icing, airfield lighting, and instrument landing. Looking beyond today’s coronavirus travel restrictions, Prime Minister Shmyhal said in Luxembourg: “The loan signed today for Boryspil International Airport will ensure the development of infrastructure and strengthen the position of the international hub.”
The EIB also is loaning Ukraine €50 million to buy Covid-19 vaccines and modern refrigeration equipment to store them, the bank reported Friday. Earlier, the World Bank announced it would loanvUkraine $89 million to buy vaccines.
Vaccinations are to start in Ukraine this week, Viktor Lyashko, chief sanitary doctor and deputy health minister, said Saturday. Over the next 10 weeks, 367,000 people are to be vaccinated – largely soldiers and Covid-19 doctors. By the end of this year, the Ministry hopes to vaccination almost half of the nation’s adults.
After six weeks of remote talks, an IMF team in Washington suspended its work Friday with Ukraine, awaiting “more progress.” Needed steps include adopting legislation to restore anti-corruption bodies, cleaning up the courts and phasing out price controls on natural gas. Goesta Ljungman, the IMF representative in Kyiv, said: “The discussions were productive, but more progress is needed to support completion of the first review under the program. Discussions will continue.”
At stake are soft loans of: $2.9 billion from the IMF, $750 million from the World Bank and €600 million from the EU. With $29 billion in foreign currency reserves and manageable debt repayments through the summer, many analysts say the government does not feel pressure.
Hours before talks were suspended, Dragon Capital wrote: “Moderate fiscal funding needs in the coming months suggest no urgency about IMF financing…We expect a $0.7bn second tranche in July-August and identical third disbursement closer to year-end.”
With Eurobond rates low, Ukraine may not feel urgency, analysts say. With the Biden Administration forming its policy and team for Ukraine, the IMF may be waiting to get clear signals from the US, its largest shareholder.
Tim Ash writes from London: “It’s always a frustration in Ukraine that in times of flush global market liquidity reform momentum stalls…Markets can of course turn… Ukrainian policy makers would thus be well advised not to bet everything on markets remaining open to them this year, and to try and get back to proper talks with the IMF ASAP.”
In response, President Zelenskiy promised to submit to the Rada this week needed draft bills to improve the judicial system and “insist” lawmakers debate them “quickly.” Finance Minister Serhiy Marchenko emailed Bloomberg to say: “Ukraine remains committed to its reforms agenda and fruitful partnership with the IMF.” Underlining the lack of urgency, presidential advisor Timofiy Milovanov, a supporter of reforms, told Interfax-Ukraine: “Financial and macroeconomic stability is maintained. There are no systemic risks. The situation with the budget is normal.”
Russian sanctioned eight more Ukrainian companies Friday, raising the total to 84. The new decrees includes: vessel maker Craneship, towage firm Donmar, cargo operator Transship and metal producer Maxima Metal. Last year, Russia added former President Petro Poroshenko and rock singer politician Svyatoslav Vakarchuk to its list of sanctioned Ukrainians, raising the total to 35.
Kyiv’s autumn (September-November) was the warmest since local record keeping started in 1881, reports Ukrinform. “The calendar autumn is over but the meteorological winter has not come yet,” reports the Borys Sreznevskyi from the Central Geophysical Observatory which is located in southern Kyiv. “It will begin when the average daily air temperature starts steadily dropping below 0 °C.” Without any sharp freeze forecast, authorities have extended the Dnipro River shipping season for an unprecedented extra month, to Dec. 31.
Ukrainians can look forward to a normal shopping this weekend and, probably through Friday December 25, Catholic Christmas. Prime Minister Shmygal said November’s weekend shopping bans had cut the spread of the coronavirus.
Yesterday morning, 13,141 new cases were announced, down from a daily average of 16,500 late last week. However, in Kyiv Mayor Klitschko said yesterday that a record 1,735 new coronavirus cases had been confirmed. Eight months after the first cases were confirmed in Ukraine, “about 3% of Ukraine’s population of Ukraine have already had COVID-19,” Deputy Health Minister Iryna Mykychak tells Telegraf media outlet.
With a big budget funding gap looming, Ukraine may tap the international Eurobond market for up $1 billion in short term financing, Prime Minister Shmygal told the Korrespondent news site. He asserts the IMF will announce the date of its review mission in coming days. This would indicate that the $5 billion Stand By Agreement signed six months ago is back on track. Shmygal also said the government could sell $2 billion worth of Hryvnia bonds in coming weeks. On Tuesday, the government sold $93 million worth of Hryvnia bonds.
Timothy Ash writes from London: “Surprised it took them so long given the strength of global beta which has seen Ukraine’s borrowing costs in the Eurobond market crash 200bps lower over the past month or so. The appetite for yield is so strong post US elections that people are willing to look beyond challenges in individual country stories – and in Ukraine’s case — challenges to the anti corruption agenda, which is stalling IMF lending…Markets may not be so forgiving in 2021, so they really need to use the window being provided by cheap global financing conditions to crack on with those much needed reforms. Not entirely sure why you would only do a six month issue – market feels open to 5Y or 10y deal, and not sure that six months down the line pricing will be much cheaper.”
Through October, Ukraine has attracted $221 million in new direct foreign investment — 5% of the $4.5 billion attracted during the first 10 months of last year, the National Bank of Ukraine reported yesterday. Similarly, reinvestment by foreigners also fell sharply during the same period: to $639 million, from $2.9 billion this time last year. The Central Bank reported that Foreign loans also plummeted to $219 million, from $640 million last year. Analysts put the blame on the coronavirus recession and on the stalling of Ukraine’s movement to clean up the judiciary and implement free market changes.
Corporate raiding — stealing companies through forgeries or force — is up slightly this year compared to last year, reports Ukrinform, citing data from Opendatabot, an online registry. Through October, 751 corporate raids were recorded in Ukraine, almost the same number as for all of last year. Three quarters were attempted through forged documents. This year 45% of cases go to court.
Ukrzaliznytsia plans to spend almost $1 billion next year on repairing locomotives, cars, and track — almost three times the money spent this year. As posted on the state railroad’s site, financing would be: 55% from UZ’s funds; 31% from bond sales; and 14% from the state budget. According to Vladimir Zhmak, UZ’s new CEO, the railroad will probably end this year with a $500 million loss, largely due to lost passenger ticket sales. Last year, the railroad recorded a profit of $110 million.
Despite the corona recession, cargo handled by Ukraine’s seaports is up by 1% yoy. Through November, the ports handled 146 million tons. Confirming Ukraine’s reliance on exports of raw materials, grain and ore exports accounted for 58% of all cargo moving through the ports.