Finance

Wednesday, May 26

Seeking to get Ukraine’s weapons sales to Pakistan back on track, Ukroboronprom demonstrated the newest Oplot tank and the Skif anti-tank system last week in Kharkiv to Pakistani General Qamar Javed Bajwa. The de facto ‘CEO of Pakistan’, Gen. Bajwa is army chief of ...

Responding to the world surge in iron and steel prices, Ukraine’s pig iron production rose 9% to 7.1 million tons during the first four months of this year, compared to January-April 2020. Ukraine slightly outpace world growth of 8.6% and put Ukraine in 10th place worldwide for iron production, according to the W...

Retail sales were up 14% yoy for the first four months of this year , compared to January-April 2020, reports the State Statistics Service. April 2020 was very weak due to the national quarantine, but during April 2021, much of the nation was also under a limited shop...

Concorde Capital’s Evgeniya Akhtyrko writes: “April’s surge in retail trade is impressive…We expect consumer demand to stay strong in 2021, allowing retail sales to accelerate to 10% yoy (vs. 8.4% yoy growth in 2020).”

Almost 10% of Ukraine’s farm land is farmed off the books, costing the state as much as $1 billion in lost taxes annually, reports the Association of Agrarians of Ukraine. Lease payments on these tax-dodging schemes total as much as $2.5 billion, the group’s chairman, Alexander Vasilivsky, complained to Roman Leschchenko,...

The Finance Ministry raised $217 million in hryvnia at yesterday’s bond auction, less than half the amount raised last week. In the auction for five bonds, yields were virtually unchanged, the Ministry reported on Facebook. The biggest sellers were 1-year bonds, at 11.2%, and 3-year bonds, at 12.3%.

Tuesday, May 25

As anger mounted in Europe, Belarus’s 2031 dollar bonds tanked yesterday, reports Bloomberg. Yields surged 60 basis points to 7.84%, the highest since August when protests broke out after Lukashenko claimed victory in a presidential election widely seen as fraudulent. Bond ...

Monday, May 24

The government hopes to increase foreign investment from $420 million last year, to $3 billion this year, to $15 billion by 2025, according to the National Economic Strategy 2030 posted last week on the government’s website. Other goals for 2030 are: double the economy; triple exports to $150 billion; nearly triple labor product...

The Economy Ministry has downgraded its 2021 GDP growth forecast, to 4.1%, from 4.6%, Ihor Petrashko told Interfax-Ukraine after stepping down as Economy Minister on Thursday. Similarly, the new 2022 growth forecast is 3.8%, down from 4.3%. Although the economy shrank by 2% in the firs...

The closing of 2/3 of Ukraine’s banks since 2014 affected 7.7 million Ukrainians – about one third of the adult population, Eduard Bagirov, chairman of International League for the Protection of Citizens’ Rights, said Friday at a press conference at Ukrinform. The banking crisis engendered a distrust of banks, which ...

Ukrzaliznytsia has identified 182 non-core assets to sell as the state railroad looks for ways to turn last year’s loss into a profit this year of around $130 million . To test waters on market interest and pricing, 11 properties will be sold through Prozorro.Sales: six stores, four ‘non-residential’ buildings, and one sports club, UZ’s press office said Friday. &#...

Car imports jumped 9%, to 125,800, during the first quarter, compared to January-March of last year, reports Ukravtoprom, the vehicle industry association. In dollar terms, imports of cars, trucks and buses, were up almost 18%, to $1.1...

Friday, May 21

Lyubchenko said he wants banks to move from buying government debt to lending to manufacturers. He said he favors an innovation economy and stress on producing at home rather than importing. “The law enforcement function should leave the economy,” said Lyubchenko, who served for the last year as...

Ukrzaliznytsia is “bankrupt,” Zelenskiy said, because of a burden of debt taken out at high interest rates. “Ukrzaliznytsia has a loan debt of hundreds of millions of dollars,” he told reporters. “They took loans of 100, 200, 300 million dollars at 10-12%.” By contrast, Naftogaz bonds currently have 7-8% yi...

The Rada approved yesterday a banking reform bill seen as a key step to restarting Ukraine’s stalled $5 billion IMF program , Reuters reports. Passed on first reading, the bill strengthens the independence of the central bank and expands its regulatory powers to push out corrupt or incompetent managers or board members of ...

Thursday, May 20

Fighting for the business of Ukraine’s 12 million pensioners , Igor Smelyansky, CEO of Ukrposhta, disconnected last night all third party ATM machines in Ukraine’s 11,000 post offices. He wrote on Facebook that he is protesting a decision by the Pension Fund to...

Wednesday, May 19

Concorde Capital’s Dmytro Khoroshun has predicted: Steel price “levels should remain exceptionally elevated in the short term, even though we expect a correction later in 2021. Metinvest’s monthly EBITDA will likely to reach the $400-500 million range...

Interpipe, the steel pipe and Wheel Company, successfully returned to international capital markets last week, completing the placement of $300 million worth of Eurobonds, maturing in 2026. The coupon rate is 8.375% per annum. Fadi Hraibi, director general of the company, said that the bonds, now listed on the...

The Rada yesterday voted to approve the resignations of Krykliy and Economy Minister Ihor Petrashko . Ukraine’s Parliament also voted 292-1 to dismiss the Health Minister, Maksym Stepanov, over his handling of the coronavirus pandemic. Tomorrow, the Rada may vote on three successors.

The privatization drive is “irreversible, ” Kyrylo Tymoshenko, Deputy Presidential Chief of Staff, wrote on Facebook after President Zelenskiy chaired an inter-agency Zoom call Monday on the campaign. Over the next six weeks, there are to be ...

Auctions of state or communal farm land will now take place openly through electronic auctions conducted on the Internet, under a bill adopted yesterday by the Rada. “Anyone with a computer and Internet access will be able to take part in the auction,” (Interfax-Ukraine). “According to the ministry, the winners of the bi...

The Finance Ministry raised $513 million – in dollars, euros and hryvnia – in its weekly government bond auction yesterday. The Ministry reported on Facebook that hryvnia bonds, annual yields were virtually unchanged: 3-month at 8.5%; 1-year at 11.2%; 18-month at 11.3%; and 2-year at 12.05%. Investors bought $63 million wo...

On May 31, Ukraine will make its first payment on GDP warrants issued under the 2015 public debt restructuring. The payment will be $40.1 million, according to the Irish Stock Exchange. With a total face value of $3.2 billion, the bonds are to be repaid through 2040, depending on GDP growth. Analysts warn that,...

Timothy Ash, of BlueBay Asset Management, writes: “Payouts increase markedly with higher real GDP growth. If real GDP growth accelerates to 5% in 2021, the payout might increase to around $900 million for that year. And, obviously, growth at 3% or lo...

Tuesday, May 18

DTEK Energy yesterday completed a 14-month restructuring of its loan portfolio, converting current Eurobonds and major bank debt, totaling more than $2 billion, into new Eurobonds; the company said last night after London markets closed. In an announcement posted on the London Stock Exchange, DTEK said parts of the current debt on DTEK Energy Eurobonds were converted into $425 m...

“Thus, DTEK Energy’s loans have been transferred to a public financial instrument,” the press release reads. DTEK CEO Maksym Timchenko said: “Despite the loss of assets in Donbas, the systemic crisis in the Ukrainian electricity market and the economic downturn caused by the COVID-19...

Ukrposhta plans to acquire a bank, Igor Smelyanskiy, CEO of the state postal operator, wrote on Facebook. He said that “The acquired bank will be small, without branches or with a small number of them (we have 11,000 of our own) and, o...

The National Bank of Ukraine opposes the transformation of Ukrposhta into a postal bank , arguing that Ukraine’s four large state-owned banks already dominate banking in the country. Smelyanskiy counters that he will focus on Ukraine’s ‘under-banked 20%’ – the thousands of villages...

Ukraine and IMF may reach a staff level agreement in the next few weeks, close to the one year anniversary of the $5 billion Stand-By Agreement, Yuriy Geletiy, Deputy Governor of the National Bank of Ukraine, announced in an interview with FinClub. Referring to reforms tha...

Further IMF aid should be strictly tied to concrete progress by Ukraine in adopting EU-standard changes, Henrik Larsen, who served as an EU political adviser in Ukraine from 2014 to 2019, wrote in an Atlantic Council blog. Headlined ‘US Support for Ukraine Should be Ties to Reform Progress,’ the article ...

Kyiv’s Sikorsky airport is embarking on a 3-year, $100 million investment program to allow long haul jets to land by the end of 2023. The asphalt concrete runway is to be rebuilt with concrete and extended by 20%, to 2,770 meters. Often restricted by fog, the airport will receive a Category II ILS instrumental landing system. This w...

Monday, May 17

Ukraine’s GDP contracted by 2% in Q1 2021, compared to the first quarter of 2020 . By contrast, the economy contracted by 0.8% in the last quarter of 2020. The disappointing first quarter results casts doubt on 2021 growth predictions, which are in the 4-5% range.

Ukraine’s central bank welcomed a decision by the Bank of England on Friday that it approved the “bail-in” of $595 million of loans that a British-based financial company made to PrivatBank before it was nationalized in 2016, Reuters reports. In a statement, the National Bank...

The IMF’s decision to distribute $650 billion in Special Drawing Rights this summer is undermining arguments for free market changes in countries like Ukraine, Timothy Ash argues in an essay. He writes from London: “The hope was the looming debt service hump for Ukraine in Q3, when $3bn in external debt falls due, would concentrate minds in the Zelenskiy adm...

Bitcoin mining consumes as much electricity as Ukraine. Bitcoin consumes almost 150 TeraWatt hours, according to the Bitcoin Electricity Consumption Index run Cambridge University’s Centre for Alternative Finance. By contrast, Ukraine generated 150 TeraWat...

Less than one year after receiving banking rights, Ukrposhta increasingly looks like a European-style postal savings bank. Now the Ukraine’s seventh largest purchaser of point of sale terminals, Ukrposhta has brought electronic banking to 3,200 branches, largely concentrated in villages of around 2,000 people. In the firs...

Friday, May 14

France’s Finance and Economy Minister Bruno Le Maire was in Kyiv yesterday, and presided over the signing of for agreements totaling €1.3 billion for the purchase of French goods and services. For comparison, France-Ukraine trade during 2020 was valued at €1.6 billion.

Yuriy Vitrenko has signed a one-year contract to work as Chairman of Naftogaz, announced Andriy Yermak, the chief of President Zelenskiy’s staff, at a meeting of Ambassadors of the G7 countries, Sweden and the European Union. With the Supervisory Board planning to quit today, th...

Yermak said ‘transparent’ competitions would be held for a new Board and for the post of Naftogaz chairman. Ukraine’s international finance partners – including the World Bank, EBRD, and the IMF – criticized the end run around the Board as undermining corporate governance. On a visit to Kyiv last week, U.S....

The Cabinet of Ministers proposes to bar the exit from Ukraine of the head of a company with a tax debt of $35,000 or more that is 30 days overdue , reported on the governmental portal. In a measure approved Wednesday, the government “has the right to apply to the court to establish a temporary restriction on the right of the head of such taxpay...

Thursday, May 13

Separately, in July, Ukraine’s State Property Fund plans to auction state-owned United Mining and Chemical Company, Europe’s largest miner of ilmenite, the main source for titanium oxide. Ukraine produces 6% of global titanium ore and its proven reserves are among the world’s 10 largest. The first of this year’s ‘Big Privatizations,” the company is Europe’s only miner of rutile a...

“Ukraine starts to close the gap with Russia” headlines a story in bne Intellinews. “Ukraine is actually outperforming Russia on income growth, industrial production growth and a few other counts,” reads the story. “Wages in Ukraine in dollar ter...

Germany’s government is providing €25.5 million to provide housing loans for Ukrainians displaced from Russia-controlled Donbas . The money should be enough for 1,200 mortgages, housing 3,000 to 5,000 people, reports TSN.

Mortgages, long a rarity in Ukraine, doubled to $50 million during this first quarter of 2021, compared to January-March of last year, reports the National Bank of Ukraine. The Central Bank has reported that the number of new mortgages increased by 51% yoy, to 1,811. Most mortgages are for dach...

Testifying to the stability of the hryvnia, Ukrainians sold approximately $1 billion in foreign currency since the start of this year, wrote Bohdan Danylyshyn, Head of the Council of the National Bank of Ukraine, on Facebook. Through Tuesday, net sales of foreign currency amounted to $970 million, he writes, citing Central Bank figur...

Wednesday, May 12

The World Bank has approved a $200 million loan to modernize Ukraine’s universities and to upgrade their “relevance to labor market needs, ” the Bank reported after Board Meeting on May 5. The money will fund a 5-year program to develop “modern digital infrastructure” and to improve transparency in university administration. Arup Banerji...

The World Bank has approved a $90 million loan to Ukraine to help buy vaccines to combat the Covid-19 pandemic, the Bank reported yesterday. Designed to help Ukraine vaccinate 10 million people, about one third of all adults, the program will also help pay for improvement in the infrastructure for storage and l...

With modest borrowing needs for the week, the Finance Ministry auctioned only $51.6 million in hryvnia bonds yesterday , 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 ...

Tuesday, May 11

Cargill Metals has agreed to invest US$75 million in a Canadian major iron mining project in Kriviy Rih. In the deal Cargill, a major international iron ore trader, has agreed to take 4 million tons of iron ore from the Shymanivske mine, reports Black Iron Inc. “We are very pleased to help finance Black ...

Lithuania’s Modus Energy International has started arbitration against Ukraine, claiming €11.5 million in damages for last summer’s retroactive cutting of green tariffs. The company owns the Bolokhivsky solar parks in Zhytomyr.