4:15 AM Sunday, March 25, 2018 - Friday, January 19
Smoliy for NBU Governor; Privatisation bill passes; 28 years to sell Kyiv’s new apartments? Nova Poshta delivers 30% more packages; Dragon buys again
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  • President Poroshenko nominated Yakiv Smoliy on Thursday to be the new Governor of the National Bank Ukraine. If approved by the Rada, Smoliy, 56, will succeed Valeriya Gontareva who quit nine months ago. Smoliy’s tasks, Bloomberg reports, will include restarting IMF aid, taming Ukraine’s near 14% annual inflation and defending the bank’s independence before presidential and parliamentary elections next year. Timothy Ash writes from London: “Positive development. Smoliy has done a good job and is respected by international financial institutions.”
  • The Rada passed a law Thursday designed to speed up privatizations, to cut listing times in half, and to place major sales under English law. The government hopes to make $750 million this year, attracting foreign and national investors to the first of 3,000 state companies to be sold. To attract the largest number of bidders, an online auction system will be used. For state companies assessed at over $10 million, international advisors may be used. Prime Minister Groysman told the parliament that privatization will unlock value by attracting investment to the money losing companies. He said the law “gives the opportunity to create tens of thousands of jobs in the near future in Ukraine.”
  • The World Bank is encouraged by signs from President Poroshenko that a bill to create an anti-corruption court could be revised after international criticism, Satu Kahkonen, the lender’s Ukraine director, tells Reuters. Asked about 2018, she answered: “Looking forward, whether I‘m going to be optimistic or pessimistic, will depend very much on what is going to happen with the anti-corruption court and land reform…These are two reforms that actually do matter for investment and for investors to come in and for growth to really take off in Ukraine.” As for a market for farm land, she said: “The preparatory work for land reform has quietly moved forward and is very well-advanced.”
  • President Poroshenko says that after the Ukraine-Canada free trade pact went into effect six months ago, two-way trade jumped by 60%, Ukrinform reports. He was talking Thursday at a joint press conference with Julie Fayette, Governor General of Canada, who is in Ukraine on a two-day visit.
  • Construction companies in Kyiv sold 2,350 apartments last year, the worst performance in five years, ARPA Real Estate reports. At that level of sales, it would take 28 years to work through the city’s backlog of 66,000 unsold apartments, calculates. Michael Artyukhov, managing director of ARPA says that five years ago apartments in new buildings were largely sold out during construction. In 2014, buildings were completed with 10% of apartments unsold. Today, that rate is 30%. With only 5% of buyers qualifying for bank mortgages, construction companies increasingly offer their own financing plans.
  • A major solar power station should be built in the Chornobyl zone -- but not at today’s advantageous ‘green tariff,’ says Alexander Dombrovsky, acting head of the Rada Committee for Fuel and Energy. A major incentive to solar investments, Ukraine’s ‘green tariff’ is among Europe’s highest. The government is talking to foreign investors about building solar power plants with capacities of up to 1.2 GW around Chornobyl. Dombrovsky told reporters Thursday the Rada should pass a law allowing for auctions of the power, which would set the price at “4-5 times lower than the current ‘green tariff.’”
  • Due to emigration, the number of Internet users in Ukraine declined by 600,000 in the second half of 2017, the Internet Association of Ukraine reports, citing a survey by Factum Group Ukraine. Internet use among Ukrainians over 15 remains unchanged – 64%. The report says: “At the same time, for the first time, there was a significant decrease in the absolute number of regular users in Ukraine - from 21.6 million in mid-2017 to 21 million by the end of the year. This decline is explained by the decrease in the total number of permanent residents of Ukraine, mainly due to migration abroad Ukraine at the age of 18-45 years.” Internet usage – on laptops and smartphones – ranges from half of adult residents of villages to three quarters of residents of big cities.
  • Expanding its commercial real estate investments, Dragon Capital seeks to buy a business center on Kyiv’s Velyka Vasilkivska, according to the Antimonopoly Committee of Ukraine. Interfax cites a real estate company that lists the business center for sale at $27 million. The listing says the 9-story office center has 7,900 square meters of leased space and a parking garage for 54 cars.
  • H & M, the world’s second-largest clothing retailer, has started advertising for personnel in advance of the opening later this year of their first Ukraine story, in Lavinia Mall, on Kyiv’s Ring Road, west of Podol. Second only to Spain’s Inditex, parent of Zara, H & M is based in Sweden and has about 4,500 stores in 62 countries.
  • Propelled by online shopping, Nova Poshta delivered 30% more packages in 2017 than in 2016. Of the 146 million parcels, orders from abroad accounted for 5 million, five times the level of 2016. E-commerce accounted for 33 million parcels, a 30% jump. To handle the volume, the courier service increased its fleet by 31%, to almost 1,500 trucks.
  • Reflecting Georgia’s importance as a Ukrainian export trade corridor to the Caucasus and Central Asia, Ukraine’s exports to Georgia were six times greater than imports during the first nine months of last year. With Ukrainians trucks often barred from transiting Russia, Ukraine shipped almost $300 million worth of goods to Georgia, but only imported $49 million, according to Ukrinform.
  • Trade between Germany and rose by 21.5% in 2017, Ukraine’s government reported after Prime Minister Groysman met with executives of leading Germany companies operating here. “Trade focus shifted towards goods of light industries and food industries," reported the press service of the Cabinet of Ministers.
  • About 2.4 tons of gold are in the Belopotik ore deposit in the Rakhiv district of Zakarpattia, reports the State Service of Geology and Mineral Resources. Located in the Carpathians, 20 km north of Romania, the deposit should be further studied in order to attract investment. Ukraine’s only major gold mine also is in Zakarpattia. Avelana Gold, an American company, has announced a $100 million plan to develop the Muzhievskoye mine.
  • Turkish Airlines increased traffic its Ukrainian flights by 18% last year, double the airline’s worldwide growth of 9.3%. Carrying about 600,000 passengers, the airline made about 50 flights a week from six cities of Ukraine - Kiev, Odessa, Lviv, Zaporozhye, Kherson and Kharkov. Ukrainian competitors succeeded in forcing Turkish to drop flights from Dnipro in 2014 and Ivano Frankivsk in 2016. Turkish Airlines also operates three weekly cargo flights from Kiev.

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UBJ a.m. is reported by UBJ Editor in Chief James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow bureau chief. For comments and story tips, Brooke is reachable at
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