Finance

Wednesday, July 7

Noting that the Infrastructure Ministry proposed on Monday to raise some cargo rates, Konstantin Fastovets of Adamant Capital wrote: “We do not see a problem with finding buyers for the 5-year issue as long as the offered yield stands a c. 6.5% or above.”

Tuesday, July 6

Ukraine’s foreign trade in goods increased by almost 30% for the first half of this year , compared to the same January-June period last year said Taras Kachka, Ukraine’s Trade Representative writes on Facebook. Compared to the first half of 2019, the last ‘normal’ year, trade is up 22% a...

Highlights contrasting the two six-month periods are: Exports to the EU reached $12.3 billion, 20% higher than 2019. Exports to China reached $4.28 billion, nearly three times the level of 2019. Trade with Turkey changed from a deficit last year of $80 m...

Ukraine’s current account surplus grew to $723 million in May, up from $443 million in April, reports the National Bank of Ukraine. Behind the growth was a surge in export earnings from: mineral products +188% yoy; ferrous metals + 95%; food exports + 29%; chemic...

Concorde Capital’s Evgeniya Akhtyrko writes: “The boom in Ukraine’s external trade continues. The export receipts are ballooning amid an incredibly favorable global price situation for iron ore and ferrous metals. The growth of Ukraine’s other e...

Ukraine’s exports to Russia plummeted by 78% from 2013 to 2019 , Tymofiy Milovanov, Presidential Economic Advisor said yesterday at the Ukraine 30 International Politics forum. During that period, Ukraine’s exports to the EU increased by 24%. “We have increased e...

Ihor Smilyanskyi, CEO of Ukrposhta, is setting ambitious goals for the next two years of his management of the national postal service . He posts on Facebook that his 5-year development strategy is: to create a postal bank that will be one of Ukraine’s five largest banks; to grow Ukrposhta into a company with $1 billion in revenues b...

‘Small’ privatizations – the sale of state assets that litter Ukraine 30 years after the collapse of communism – netted the government $61 million during the first half of this year. This is four times the amount of the same January-June period last year, the State Property Fund writes on Facebook. Increasingly popular, the sales are online, are open to bidders from across the nat...

Thursday, July 1

In the Rada’s latest move to meet IMF requirements, Ukraine’s parliament yesterday approved legislation to strengthen the independence of the central bank and expand its regulatory powers. Government members are not to attend Board meetings of the Nati...

In the latest turmoil at the central bank, the nine top leaders of the licensing department quit en masse yesterday, charging a lack of transparency and autonomy under the new governor who took over one year ago. “Today, the National Bank of Ukraine has deviated far from these standards,” Oleksandr Bevz, former dire...

Vahram Stepanyan, a veteran of reform programs in Hungary and Romania, is the new IMF resident representative in Ukraine. A native of Armenia, Stepanyan most recently served with the IMF in the United Arab Emirates. Goesta Ljungman, the IMF representative here for the last four years, is returning to Washington in a rout...

Wednesday, June 30

If both laws were deemed ‘IMF compliant,’ they would contribute to restarting in July the long dormant process of an IMF review and to the resumption of lending in September . Ukraine’s $5 billion IMF program stalled after a first tranche was disbursed one year ago. Compliance with an IMF program reassures foreign investors. Compliance would also change the dynamic of Pre...

Ukraine faces a foreign debt repayment of $3 billion in September. Ukraine could meet this deadline with a second IMF tranche and attendant disbursements from other international financial institutions. A separate IMF allocation of $2.7 billion, part of a worldwide d...

President Zelenskiy stressed the importance of getting the IMF deal back on track when he was interviewed two weeks ago by AP, AFP and Reuters. “This is important primarily for our economic stability and investment climate,” he said in a transcript posted on the presidential websit...

Timothy Ash writes from London: “If…these laws are now IMF compliant, then there is a hope still of getting the first review under the Stand-By Arrangement signed off before September and all the 2022 budget discussions.”

The Rada recently passed one economic bill that met with IMF skepticism. Starting September 1st, Ukrainians who have accumulated assets, but failed to pay taxes on them, can declare them voluntarily, pay a one-time fee and avoid punishment for tax evasion. For this one-yea...

The Finance Ministry sold only $93 million worth government bonds yesterday – 22% the amount sold at last week’s auction . As reported on the Ministry’s Facebook page, yields were little changed for the five tenures of hryvnia bonds on offer. Yields ranged from 8.5% for three-month bonds to 12.73% for 6-year hryvnia bon...

Three quarters of the 495 loans extended under the government’s affordable mortgage program have gone for dachas , the Finance Ministry reports. In the first four months of the program, 14 authorized banks made a total of $15.5 million in loans – 78% to the ‘secondary’ market. Although the program is designed to...

Tuesday, June 29

Yesterday President Zelenskiy signed the ‘Google tax’ law – legislation that requires international IT companies to pay Ukraine’s 20% VAT tax on services provided to Ukrainians. Following the examples of the EU and Australia, the Rada designed the bill to co...

UZ losses extended into the first quarter of this year, suffering a $62 million loss for Q1 , the railroad reported last week. Passenger traffic peaked at 4.5 million, which was only 63% the level of Q1 last year. Cargo rates, especially for iron, are kept below comparative rates in Poland. ...

The nation’s largest employer, UZ cut its staff by 3% last year, to 243,387 . The company pays an average monthly wage of $409 – 18% below the national average. UZ’s level of debt is $1.5 billion which is owed to financial institutions including the EBRD, Oschadbank, Ukrgasba...

VR offered a discount of $111 million to UZ, Deitz told the Rada and, later, the UBN in an interview. “UZ refused to even engage in negotiations over restructuring,” Deitz told the Rada of his experience over the last 2 ½ years. “Many of our letters received no response at all, and the Supervisory Boa...

Monday, June 28

Ukraine’s exports of goods to the EU grew by 60% in the five years since Ukraine joined the Deep and Comprehensive Free Trade Area pact with the EU , Prime Minister Shmygal writes on Facebook. This year, Ukraine’s exports to the EU may hit €20 billion. Last year, the EU took 41% of Ukraine’s exports of goods and services.

Ukraine has signed a $350 million loan agreement with the World Bank that aims to help mitigate the impact of the COVID-19 pandemic and support economic recovery , Prime Minister Shmygal said Friday. The money also will help implement a fair development of the farmland market, continue reform of the natural gas sector, and strengthen the credit market. Since U...

Boryspil airport recorded a monthly profit of $1.5 million in May, its first profit since the coronavirus pandemic hit European air travel in March of last year, Zhmak, the airport director, said. Despite the travel crisis, Boryspil recently started to receive regular flights from two new carriers – Cyprus Airways...

Friday, June 25

Ukraine’s trade with China, its largest trading partner, jumped by 48%, to $7.4 billion, during the first five months of this year, compared to January-May last year, Fan Xiangong, China’s ambassador to Ukraine told reporters yesterday. He said Ukraine is the top supplier to China of whea...

Thursday, June 24

The central bank council decided yesterday not te renew its 5-year contract with Dmytro Sologub, a deputy bank governor, after it expires July 10. Sologub, a stalwart of the post-Maidan banking reform, is responsible for the Monetary Stability unit of the National Bank of Ukraine. This includes monetary policy, statisti...

Timothy Ash writes from London: “Massive, massive loss to the NBU… Dima has become the point person for investors to understand the Ukraine macro story and how the NBU thinks about these things… It seems very much that the NBU will ...

Two-way China-Ukraine trade in farm goods jumped by one third, to $5.7 billion, during the first four months of this year, compared to January-April of last year, reports Ukraine’s Economy Ministry. Chinese investment in Ukrainian fisheries and food processing plants was discussed yesterday at a bilateral agricultural coo...

Wednesday, June 23

In the first auction since the central bank decided to keep the prime interest rate unchanged at 7.5%, sales of Ukrainian government bonds jumped by 39% yesterday, to the equivalent of the $416 million, the Finance Ministry reports on Facebook. Cut off rates remained the same: 6 months – 9%; 13 months – 10.99%; 18 months. – 11.3%; 2-year – 12%; 3-year – 12.3%; and 5-year...

To keep the hryvnia from strengthening above 27 to the dollar, the National Bank of Ukraine last week made net purchases of $93 million . Since the start of the year, the central bank has purchased $729 million. Last year, net purchases totaled $1 billion for the whole year.

Ukraine’s foreign currency payments on public and publicly guaranteed debt will exceed $10 billion over the next year, reports the National Bank of Ukraine. In addition, payments on hryvnia debt will be around $5 billion in the second half of this year. With no disbursements over the last year from Ukraine’s IMF progr...

Tuesday, June 22

This year, renewables will account for 70% of total investments worldwide in electricity , the International Energy Agency says in a new report. Renewables, largely wind and solar, will get $530 billion, the Agency says in the 64-page study. This year, for the sixth year in a row, investm...

Belarus government bonds fell Monday to the lowest levels since the Covid crisis hit Europe almost 18 months ago . It is unclear if Thursday’s sanctions will include restrictions on trading Belarus bonds. Prompting yesterday’s selloff, the EU, US, UK and Canada imposed a series of sanctions on Belarus entities a...

Ukravtodor’s Eurobonds, offered under sovereign guarantees, were three times oversubscribed last week , Infrastructure Minister Oleksandr Kubrakov writes on Facebook. Ukravtodor received applications for nearly $2.4 billion and placed $700 million. With the yield on the 7-year bonds priced at 6.25%, t...

Friday, June 18

Ukravtodor, in its debut placement on the Eurobond market, placed $700 million of 7-year bonds at 6.25%, well below the initial return target of 6.625% , Interfax-Ukraine reported yesterday. Earlier this year, the Cabinet of Ministers approved sovereign bond guarantees up to $740 million for the state highway agency. The organizers of the issue ̵...

Ukravtodor’s yield is comparable to the yield on a 10-year bond obtained by a Ukrainian blue chip company – poultry producers MHP . For comparison, an 8-year, $1.25 billion bond issued by Ukraine six weeks ago – on April 30 — came in at a significantly higher yield — 6.876%.

Defying expectations, Ukraine’s central bank decided yesterday to keep the nation’s prime rate at 7.5% . After May inflation came in at 9.5% yoy — the second highest in Europe after Turkey’s — most economists interviewed by Bloomberg expected a hike. At two previous meetings – in March and ...

Timothy Ash writes from London: “Inflation is at 9.5% and policy rates only at 7.5%, that is a big negative rate differential…There is a sense also that the Zelensky administration is pulling away from IMF conditionality, so maybe t...

Inflation will slow down this fall and hit the central bank’s target of 5% in first half of next year , Kyrylo Shevchenko, the bank’s governor, predicted yesterday. He said: “Inflation will start to slow down in the autumn of this year and will return to the target of 5% in the first half of 2022.”...

Factors bringing down inflation are expected to be: a growing agricultural sector, a strong hryvnia, and a fading base of comparison with last year’s recession. Ukraine’s currency has gained 5.3% against the dollar this year, making it one of the world...

Over the last two years, Naftogaz has sold a total of $1.55 billion of Eurobonds . On April 30, Ukraine’s Cabinet of Ministers suspended the Naftogaz Supervisory Board and installed Yuriy Vitrenko as CEO. “We were very unhappy and we made that very clear,” Renaud-Basso said. “We h...

Raiffeisen Bank Aval changed its name yesterday to Raiffeisen Bank, the largely Austrian-owned bank said yesterday. “The name of the bank should be simpler, like everything for our clients,” said Board Chairman Oleksandr Pysaruk. In connection with the renaming, the b...

During the first five months of this year, UIA issued $20 million dollars in refunds to passengers, stemming from 68,000 requests due to flights cancelled because of coronavirus restrictions, the airline reports. Noting that UIA has repaid $41 million since the pandemic started in Europe, UIA said i...

Thursday, June 17

Privatization receipts will increase fourfold this, reaching $450 million, said Kyrylo Tymoshenko, the Deputy Chief of Presidential staff, predicted yesterday at a government forum “Ukraine 30. Economy Without Oligarchs.” Starting prices for three big government corporation ...

With ‘large scale privatizations’ only unblocked last month, the sales schedule for this year is as follows: United Mining and Chemical Company in August; Azov Shipyard in September; Bolshevik site in October; Hotel President in November, and by December two small Black Sea ports – Belgorod-Dnister and...

Next year, Centrenergo, the conglomerate of 23 regional power producers, will go on sale in March 2022. Odesa Port Plant, the chemical producer, is to go on sale in April 2022.

The Defense Ministry is transferring three hotels to the State Property Fund for privatization , Tymoshenko said yesterday. They are: the Kozatsky on Kyiv’s Maidan, the Vlasta in Lviv and the Bratislava in Kryvy Rih.

“There are hundreds of such non-core facilities in various government agencies, ministries,” Tymoshenko said . He cited a ski area in Lviv region and a health complex in Vorzel, Kyiv region, which are owned by the State Fiscal Service. He vowed: “Such non-core facilities will be transferred to State Property...

Since last fall, the sale of distilleries has netted the government $55 million. The Property Fund aims to sell 900 state properties this year, most of them are considered ‘small’ or under $10 million in value. To generate more grass roots support, the Rada is considering a bill t...