Finance

Thursday, April 22

Retail trade during the first quarter was up 7.5% yoy compared to January-March 2020, according to the State Statistics Service. Retail grew the fastest in: Kyiv Region + 14.6%; Chernivtsi +13.7%; and Vinnytsia +12.5%. Last year, retail grew 8.4% nationw...

Wednesday, April 21

Oksana Markarova, Ukraine’s new Ambassador to the US flew to Washington yesterday . She wrote on Facebook: “For the first time since 1999, I am going to board an airplane with one way ticket.”

The Finance Ministry raised yields yesterday on hryvnia bonds by 20 to 73 basis points. The auction raised the equivalent of $164 million which was almost three times the amount of the previous week. In yesterday’s auction, 96% of purchases were for 1-year bonds, which carried yields of ...

Tuesday, April 20

The EBRD is lending the hryvnia equivalent of $65 million to Datagroup, a fast growing telecommunications company, to buy Volia , Ukraine’s leading pay-TV and cable broadband service, the bank announced yesterday in a press release. With a majority of shares owned by the fund, Horizon Capital, Datagroup calls itself a leading ...

The World Bank is commencing a new $100 million program for Ukrainian small and medium-sized businesses to receive soft loans for export-oriented projects, reported the Finance Ministry reports. Yesterday, the Cabinet of Ministers formally approved the long-term financing facility.

Ukraine is on track to revive the IMF accord and to receive a $2 billion tranche by September, said Oleh Ustenko, a Presidential Economic Adviser, (Ukraina 24 TV). He said: “The bills we need to pass in order to get the tranche — the judiciary, its reform and the anti-corruption architect...

Talks with the IMF are progressing and September is a realistic date for the tranche, said Serhiy Marchenko, Finance Minister (LB.ua). “We are now narrowing the range of unresolved issues.” “In January, when there was a mission, there were many issues. Now there are fewer, they should ...

Monday, April 19

PrivatBank, Ukraine’s largest bank, will put up for sale ‘soon,’ announced Kyrylo Shevchenko, the Governor of the National Bank of Ukraine, (GlobalCapital). “The privatization of PrivatBank, which owns 20% of the Ukrainian banking market, will be of interest to the...

Friday, April 16

The escalating military standoff with Russia is cutting foreign demand for domestic government bonds, Yuriy Geletiy, a deputy governor of the National Bank of Ukraine, told reporters yesterday. “Prior to Russia’s concentration in the East, investors were actively buying IGLBs,” he said, referrin...

The Biden administration imposed a series of new sanctions on Russia yesterday, including restrictions on buying new sovereign debt, the White House has reported. The measures come in retaliation for the SolarWinds hack and efforts to disrupt the 2020 U.S. election. Effective June 14, US financial institutions are barred from buyin...

Timothy Ash, the Senior Emerging Markets Sovereign Strategist for Bluebay Asset Management, writes from London: “This is not good news for Russia. The result of these actions will inevitably be that fewer foreign investors will want to buy Russian debt which means higher borrowing costs, less investment and gro...

Surprising analysts, the Central Bank raised Ukraine’s prime rate by a full percentage point, to 7.5%. By bringing Ukraine’s key rate back to where it was one year ago, the National Bank of Ukraine said it wants to tamp down inflation.

The Central Bank revised its 2020 inflation forecast to 8%, from 7%. After inflation hit 8.5% yoy last month, the National Bank of Ukraine now predicts that inflation will peak at 9.6% in the third quarter. It will recede steadily, hitting 5% for 2021, the bank has pre...

The National Bank of Ukraine also downgraded its forecast for real GDP growth in 2021 to 3.8%, from 4.2%. “The introduction of new quarantine restrictions has led to the suppression of business activity,” the bank said. “The effect of last year’s low harvests affected the indicators of agriculture, ...

According to Kyrylo Shevchenko, the Governor of the Central Bank, two new factors are degrading economic performance. “The low rate of vaccination in Ukraine creates an additional risk of future economic losses,” he said. Less than one percent of Ukraine’s population has received a first shot of a coronavirus vaccine...

Thursday, April 15

Timofei Milovanov was appointed yesterday head of the new National Investment Fund of Ukraine, Vasily Mokan, representative of the Cabinet of Ministers in the Rada, wrote yesterday on his Facebook page. Milovanov, who served as Zelenskiy’s first Economy Ministry, will be charged with setting up...

Ukraine’s international bonds and the Russian ruble rallied yesterday on the prospect of a Biden-Putin summer summit, reports Reuters. But the lengthy, London-based story starts: “Fund managers are trimming exposure to Russia and Ukraine on fears that years of tensions could finally erupt into outright war, bringing ...

The massing of Russian troops on Ukraine’s borders has weakened demand for Ukrainian domestic government bonds , or IGLBs, Danylo Hetmantsev, head of the Rada Committee on Finance, Tax and Customs Policy, wrote after Tuesday’s hryvnia bond auction sold only the equivalent of $7.7 million. Writing on his Telegr...

Ukraine’s exports of goods hit $8.5 billion, up 4.5% in January-February, compared to the same period in 2020. Imports only increased by 0.5% to $8.73 billion. As a result, the $256 million trade deficit was slightly less than half the level of last year, reports the State ...

The top three export markets were: China — $ 1.1 billion +44%; Poland — $648 million – unchanged; and Turkey — $552.1 million +18%.

The top three sources of imports were: China — $1.4 billion + 4%; Germany — $758 million -15.4%; and Russia — $731 million -10.%.

Wednesday, April 14

The news of President Biden’s invitation to President Putin to a bilateral summit caused the ruble to immediately strengthen yesterday evening, to 76 to the dollar, from 77. The prospect of a summit may also ease investor worries Russia positioning of 40,000 troops near Ukraine’s e...

Hours before the Biden-Putin telephone call, Bloomberg published a story noting that yields on ruble bonds had hit their highest level in a year. Asserting that US financial sanctions were likely, the story was headlined: “Putin’s Ukraine Gambit...

Sales of hryvnia bonds at yesterday’s government auction shriveled to the equivalent of $56.7 million – more than last week’s amount but 14% of the week before . War clouds with Russia and tomorrow’s expected interest rate hike by the Central Bank may have pushed buyers to hold off.

The Finance Ministry trumpeted the news that the yield on its 6-month bond dropped 52 basis points, to 8.07% . Of the $17.8 million put up for auction, only 28% were sold. The Ministry reported that 1-year bond sold unchanged with a yield of 10.75%, the 18-month bond sold also unchanged with a yield 11.1%. T...

International investors sold the equivalent of $100 million in government hryvnia bonds last week , ICU has reported. The Kyiv investment house wrote: “Sentiment changed at the end of the week when J.P. Morgan announced that it was including the Ukrainian note due 2025 to the watch list to be adde...

According to a Reuters poll of analysts, the Central Bank is expected to raise its prime interest rate tomorrow in order to catch up with inflation, Of the 16 analysts, 10 foresee the rate rising to 7% from the current level of 6.5%. Three expect an increase to 7.5%. March inflation jumped to 8.5% yoy, which was fueled by food and energy price hik...

Dragon Capital has predicted an interest rate hike to 7.5% tomorrow and another increase to 8% at the Central Bank’s Monetary Policy Board’s June 17 meeting. In a note to clients, Dragon predicts that inflation will peak in June at 9.8% and will end the year at 7.5%....

The Rada should approve reforms demanded by the IMF by July 2021, allowing for the resumption of IMF financing in September , Oleh Ustenko, the President’s economic adviser, told RBC-Ukraine in an extensive interview. “Amendments will be made to the law on banks and the law on the National Bank, which will increase i...

Off the books transactions account for half of Ukraine’s GDP, Danylo Hetmantsev, estimated the Chairman of the Rada’s Committee on Finance, Tax and Customs Policy, in an interview with Ukrinform, the state-owned news agency. “I believe that the size of the shado...

“How Ukraine Lost it Investment Paradise,” headlined an article in the National Interest that blames the nation’s plummeting foreign investment on “Ukrainian authorities [falling] into the same trap of keeping their system semi-reformed, leavi...

Agroholding Astarta, Ukraine’s largest sugar producer, increased its EBITDA by 45.6% to €113.4 million. The company increased its sugar EBITDA 9-fold, to €80.2 million, by selling one unprofitable sugar mill and by cutting sugar exports by 29%. Sugar prices were higher in Ukraine, where the company has ...

The new engines account for half of a €170 million upgrade of the state company’s fleet . Work is to be done at the Ukrainian Danube’s Kiliya shipyard, about 50 km down river from the company headquarters in Izmail, Odessa. The company is talking to the EBRD and the Belgian government ab...

Tuesday, April 13

Ukraine may receive $2.7 billion from the IMF this summer under a plan by the International Monetary Fund Managing Director, Kristalina Georgieva, to allocate $650 billion from international reserves to restore the world economy after the coronavirus crisis....

Alfa-Bank Ukraine wrote: “An easy $2.7 billion from the IMF might arrive in 2021…This allocation might be very helpful as Ukraine faces its next FX debt payment peak in September ($3.1 billion). However, such ‘windfall cash’ ...

Separately, Shevchenko told Interfax-Ukraine last week that Ukraine should receive two tranches from last June’s $5 billion IMF Stand-by Agreement “given the longer course of negotiations.” Ukraine has been in on-again, off-again talks with the IMF since last fall. He said that he hoped that the Rada will pass legislation in coming weeks so that...

With the ‘Big Construction’ program running up government debt this summer, the government has approved extending state guarantees Ukravtodor for the hryvnia equivalent of $357 million in loans or bonds. Separately, the state highway agency has set up a unit to prepare for th...

Ukrzaliznytsia plans to issue a Eurobond this year, to partially cover for a disastrous 2020. Largely due to the coronavirus, a $110 million profit in 2019 turned into a $430 million loss in 2020, according to the State Railroad’s recently released Ann...

Monday, April 12

Ukraine’s March inflation íncreased to 8.5% yoy, setting the stage for an interest rate hike this Thursday at the scheduled meeting of the National Bank of Ukraine’s Monetary Policy Board. According to the State Statistics Service inflation has climbed steadily recording these rates: December – 5%; January...

Alfa-Bank Ukraine’s Oleksiy Blinov wrote: “As for [this] week’s monetary decision, we think that a 100 bps rate hike (to 7.5%) is the most likely. That might not be the final move in this hiking season.”

The economy contracted by 2.8% in January and February, compared to the first two months of last year, estimated the Ministry of Economic Development and Trade. Except for retail trade, all sectors were down. Consensus forecasts put Ukraine’s 2021 GDP growth at 4%. These forecasts were made before the ...

The National Securities and Stock Market Commission last week revoked the license of Ukrainian Stock Exchange Founded in 1991, the Ukrainian Stock Exchange, or UFB, was the first stock exchange in Ukraine. The reason cited was: “failure to carry out…professional activity on the stock market during the year.”...

Friday, April 9

Poland’s BGK Bank has agreed to fund 60% of the first phase of Lviv’s Innovation District IT Park, the technology park has reported. The State-owned Bank, Gospodarstwa Krajowego, will loan €81.5 million for the €136 million first phase of development. With a first phase expected to be completed by ...

Wednesday, April 7

The total value of mergers and acquisitions in Ukraine in 2020 dropped by 62%, falling below $1 billion. The number of M&A deals was 69, down 15% in comparison to 2019, according to a report issued yesterday by KPMG. Although deals are off to a slow start this year, the report predicts: “Momentum wil...

The IMF has raised its Ukraine GDP growth to 4% this year, up from its forecast of 3% made six months ago. World GDP is to increase by 6% this year, “reflecting additional fiscal support in a few large economies and the anticipated vaccine-powered recovery in...

Last year, Ukraine weathered the Covid recession comparatively well. According to figures compiled by Alfa-Bank Ukraine, the GDP drops for 2020 were: Poland – 2.8%; US – 3.5%; Ukraine – 4.1%; Germany – 5%; Czech – 5.6%; EU – 6.4%; France – 8.3%; Italy – 8.8%; and Spain...

Ukraine’s annual inflation will reach a 1.5-year high of 8% in March 2021, exceeding the Central Bank’s forecast of 7.6%, said a monthly Reuters poll of Ukrainian analysts. Analysts said consumer prices rose due to inflation imported from world commodity markets, notab...

Forbes lists seven Ukrainians amongst its latest list of the world’s 2,755 billionaires. They are: Rinat Akhmetov — $7.6 billion; Viktor Pinchuk — $2.5 billion; Konstantin Zhevago — $2.3 billion; Igor Kolomoisky — $1.8 billion; Gennadiy Bogolyubov — $1.7 bill...

Tuesday, April 6

Capital investment by cross border investors in Ukraine decreased by $868 million last year, the first decline of Incoming Investment since 2015, Bohdan Danylyshyn, Chairman of the National Bank of Ukraine wrote on Facebook. He said: “The key reasons for the low interest of foreign investors in the Ukrainian economy are the weak and underdevelo...

During the first quarter, the Central Bank of Ukraine purchased a net $220.5 million to smooth out foreign exchange fluctuations. As the hryvnia strengthened last week, the bank sold $50 million, reported the National Bank of Ukraine website. Since the start of the year, the hryvnia h...