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13:49 PM Monday, November 20, 2017
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UBJ AM Sept. 4, 2017
Survey: Ukraine top investor destination; Czechs invest in Ukraine road building; One third of Ukrainians shop on line; Dobrobut plans $100 million heart center
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• An Institutional Investor survey of 214 fund managers at 154 investment companies in August found that the country they are most likely to visit in the next 12 months is Ukraine. With 32 percent of votes, Ukraine was followed by Romania, Nigeria and Kenya. Half of hedge fund managers – 52.5 percent – said they plan to visit Ukraine over the next year. Of traditional fund managers, 27.6 percent plan to come here. Following the saying that your neighbors know you you best, the managers most likely to visit Ukraine were based in Russia, Eastern and Central Europe and CIS. Next, investors in UK and US were most bullish on Ukraine.

• Starting Jan. 1, Russian investors will have a harder time visiting Ukraine. President Poroshenko announced on Saturday: “Citizens of countries that pose risks to Ukraine are to cross the border with biometric passports. Those who don’t own such a passport will have to provide their biometric data at the border.” For these citizens, Ukraine will resume the Soviet-era practice of registering their places of residence in Ukraine.

• Russian natural gas volumes piped via Ukraine to European consumers are up by 23.4% so far this year at 61.9 billion cubic meters, according to Ukrtransgaz, Ukraine’s state gas transport monopoly. Ukrtransgaz said this was the largest volume for the last six years. Last year, Russian gas exports via Ukraine rose by 23%. This year, about one-third of Russia’s gas exports to the EU are crossing Ukraine, Reuters reports. Gazprom says it wants to bypass Ukraine by building new pipelines.

• Production of natural gas in Ukraine in the first eight months of this year increased by 3% hitting 13.8 billion cubic meters, according to Ukrtransgaz. The operator of the national gas transportation system reported that gas consumption in Ukraine for this period slightly decreased, by 0.5%, to 17.9 billion cubic meters.

• The European Bank for Reconstruction and Development, or EBRD, has announced a EUR 35 million program to tackle Lviv’s garbage problem. In the fourth quarter of this year, a tender will be announced for the rehabilitation of the existing landfill and for the construction of a processing plant. EUR 10 million is foreseen for restoring Gribovitsky landfill. EUR 25 million is to go for the construction of a waste processing plant adjacent to Lviv CHP-2. This would allow co-generation of power and heat.

• The Ukraine subsidiary of Czech Arca Capital has signed a memorandum with the Ukrainian-Polish enterprise UPS and with Investment Service Ukraine to jointly build roads, highways and bridges across Ukraine. Next year, the Czechs want to build EUR 150 million worth of roads, increase their road construction machinery fleet by 100 units, employ 300 workers, and buy three mobile asphalt concrete plants.

• Ray Washburne, CEO of the Overseas Private Investment Corporation, or OPIC, told Prime Minister Groysman last week that the American agency wants to implement several projects in Ukraine: a nuclear waste fuel storage facility with Energoatom; the EuroCape Wind Farm I in Zaporizhia; coal supplies from the US; and new locomotives for state railroad Ukrzaliznytsia.

• US will deliver about 700,000 tonnes of anthracite coal to Ukraine by year end. Last week, a ship loaded with 62,000 tons of coal left Baltimore. It should arrive in Yuzhny port by mid-September, Valeriy Chaly, Ukraine’s Ambassador to the US, told ZN.ua news portal. Ukraine’s coal market opened up last spring, after officials here banned coal imports from the secessionist areas. In July, Centrenergo signed a coal supply contract with XCoal Energy and Resources, of Pennsylvania.

• In June, 13.6 million internet users – about one third of Ukraine’s population -- visited online stores. This is 10 percent more than in June of last year. According to Gemius, the three most popular e-commerce websites in Ukraine are: Rozetka, the online store; Olx.ua, a classified ad site; and Prom.ua. The top three foreign e-commerce sites are: Aliexpress, Amazon, and eBay.

• Prime Minister Volodymyr Groysman says that a ‘Fund of Startups’ will be established in Ukraine in 2018. In May, on a visit to Israel, the Prime Minister was briefed on the Israel’s experience, and reportedly read the 2009 book, “Start-up Nation: The Story of Israel's Economic Miracle.”

• Dobrobut, the privately owned healthcare chain, plans to invest as much as $100 million over the next two years to build a full service heart surgery center in Kyiv. Dobrobut would develop heart stenting, coronary arteriography and open heart surgeries, Dobrobut Director Oleh Kalashnikov told Interfax. Dobrobut opened a limited, $2 million heart center last year and expects to conduct about 200 heart surgeries this year.

• Agroton agroholding, which is largely based in the government-controlled half of Luhansk region saw an almost 1.6-fold rise in net profit in January-June 2017 year-over-year, to $8.1 million. The company filed a report on the Warsaw Stock Exchange, where it is publicly traded.

• The Amstor shopping center chain, which lost 11 shopping centers in the secessionist-controlled sections of Donetsk and Luhansk, has resumed investing in cities near the conflict zone. As part of a $6 million investment plan, Amstor plans to relaunch this month a renovated shopping center in the Sea of Azov port city of Berdyansk. In the near future, it plans to open a shopping center in Severodonetsk, capital of the government-controlled half of Luhansk Region. The conflict line has changed little in the last two years.

• Ukraine recorded a budget surplus of $1 billion from January to July of this year, compared to a $1.9 billion deficit in the same period of 2016, according to the Finance Ministry.

• Ukraine is likely to receive the fifth tranche from the IMF by the end of this year, after the fourth revision of the Extended Fund Facility program, analysts of Morgan Stanley investment bank say. Morgan Stanley said the delay of land reform until next year is not essential for the IMF, because it is not a requirement for obtaining the next tranche. But fund expects Ukraine to introduce pension reform this autumn, privatization of state enterprises, the adoption of anti-corruption measures and an increase in gas tariffs scheduled for October 1. Morgan Stanley’s review said: "In general, we believe that the state's focus on reforms and the willingness to cooperate with the IMF remain, although they will compete more with populism in 2018. We expect the fifth tranche at the end of 2017."


For comments and story tips, please contact UBJ Editor in Chief James Brooke at james.brooke@theubj.com

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