Raiffeisen Bank Aval banking outlook. Foreign-ownership of Ukrainian banks in 2017 dropped below the 30% driven by restructuring and the market exit of Russian-owned banks. The market share of Western-owned banks remained constant at 15-16%. The crisis-induced consolidation and restructuring has increased the market share of state-owned players to 58% which is not expected to change for the next 2 to 3 years. Recent market concentration has increased the market share of the five leading banks up to 60% from around 35% in 2011. Large-scale M&A activity is predictable over the next 12-24 months. Loan-to-GDP ratios are at the lowest level for 7 to 10 years at 32% down from 80-90% in 2008/2009. According to the NBU credit and profitability risks have decreased over the past six months. Liquidity risk remains low. The inflow of Hryvna funds remains stable at 15% y-o-y with customer funds providing over 80% of banks liabilities. GDP growth is estimated 2.5% in 2018 with 3% forecast for 2019.
Ukraine attracts USD 1.3 billion for green energy. The country has attracted USD 1.3 billion of investments in green energy projects in the past three years, Ukraine's State Agency for Energy Efficiency (SAEE) announced. Projects include the installation of biogas units and the construction of a biomass power station and in the construction of solar plants, Xinhau reports.
Borschahivka pharmaceuticals to expand. “The Borschahivka chemical and pharmaceutical plant in Kyiv is to invest $6.8 million to complete a new site for the production of pills and capsules in 2019,” Director General of the plant Yulia Zdarevska has told Interfax-Ukraine. The new unit will increase capacity by 27% (500 million pills and capsules). By Q4 2020, the plant also plans to open a finished goods warehouse for 5,000 pallet positions, to expand the geography of its exports and invest in research.
EU-Ukraine Summit in Brussels. The main issues on the agenda are the implementation of the association agreement and its free trade area, the Minsk agreement, the illegal annexation of Crimea and Sevastopol, and regional issues. The EU will be represented, by among others, Donald Tusk, President of the European Council, and by Jean-Claude Junker, President of the European Commission. Ukraine is represented by President Petro Poroshenko.
EIB to sign €75 million loan agreement for road safety. At the Ukraine-EU Summit, Ukraine and the European Investment Bank (EIB) will sign a financial agreement on the implementation of a project to improve road safety. The EIB is providing a loan worth €75 million to finance the project which will be implemented in Lviv, Odesa, Dnipro, Kharkiv, Kyiv and Kamyanets-Podilsky.
Oil imports down. Ukraine decreased imports of crude oil by 3.3%, or 14,071 tonnes, in January-June 2018 y-o-y, to 416,520 tonnes. Its value was USD 227.374 million, which is 24.4% more than in January-June 2017 (USD 182.777 million). In January-June 2018 Ukraine’s main supplier of crude oil was Azerbaijan – USD 214.112, followed by Algeria –USD 7.176 million, Iran - USD 4.018 million, and other countries - USD 2.067 million. Ukraine did not export crude oil in January-June, Interfax-Ukraine reports.
Electricity exports up. In January-June 2018 Ukraine exported electricity worth $160.663 million, including $23.485 million in June alone. In monetary terms this was an increase of 17.8% y-o-y. Hungary bought electricity worth $97.4 million, Poland $39 million, Moldova $20.5 million, other countries $3.8 million, Ukraine’s State Fiscal Service reports. During the same period, Ukraine imported electricity worth $0.8 million, from the Russian Federation – $0.7& million, Belarus – $ 0.04 million, and Moldova - $0.002 million. Ukraine plans to increase exports of electricity to the EU and Moldova by 13.3% to 5.855 billion kWh this year.
Ukraine-China trade and cooperation continues growing. Bilateral trade between Ukraine and China in 2017 grew by 18% to $7.7 billion over the previous year and amounted Minister/Minister of Economic Development and Stepan Kubiv announced this at a meeting with Chairman of the China Council for the Promotion of International Trade, Jiang Zengwei. He urged Chinese companies to collaborate in joint projects concerning solar energy, agriculture, infrastructure development, including port infrastructure, the government portal reports.
Naftogaz lodges new claim against Gazprom, for USD 11.58 billion. Naftogaz is pressing a new claim against Russia's Gazprom with the Arbitration Institute of the Stockholm Chamber of Commerce, demanding the review of tariffs on gas transit, the Ukrainian company's press service said. "The transit contract between Naftogaz and Gazprom allows the parties to request a revision of the tariff in case of significant changes in the European gas market and if the tariff does not correspond to the level of tariffs in Europe," . In the Award rendered by a Stockholm tribunal in February 2018, Naftogaz's claim for tariff revision was rejected for procedural reasons, and Naftogaz's substantive right to a revision of the tariff was therefore not decided at that time. According to Naftogaz, Gazprom has not been constructive in negotiations, compelling it to refer the matter to arbitration as provided for in the contract. Naftogaz requests a revision of the tariff with effect from March 2013, and has preliminarily estimated the monetary value of the claim at USD 11.58 billion, excluding interest.
State Aviation Service approves new UIA's and charter flights from Kyiv. The License Commission of the State Aviation Service has approved Ukraine International Airline’s (UIA) proposals to begin new regular flights from Kyiv to Ho Chi Minh City (Vietnam), Krabi and Phuket (Thailand) twice a week. It has also permitted charter flights in the winter to La Romana (Dominican Republic), Zanzibar (Tanzania) and Preveza (Greece) until October 27, 2018, Interfax-Ukraine reports. At the same time the commission annulled UIA's right to regular operate flights, from Vinnytsia to Gdansk; from Zaporizhia to Batumi; from Ivano-Frankivsk to Venice, Gdansk, Poznan, Milan, Naples; from Lviv to Warsaw, Vilnius, Kaunas, Larnaca, Malaga, Minsk, Naples; from Odesa to Kaunas, Kutaisi, Larnaca, Moscow and St. Petersburg; from Kharkiv to Warsaw, Kutaisi and Larnaca; from Kyiv to Kaliningrad, Moscow, Novosibirsk, St. Petersburg, Sochi, Kaunas, Palanga, Stockholm (Skavsta), Kutaisi, Poltava and Uzhgorod.
Wizz Air announces new flights from Kyiv to Paris and Brussels. Hungarian low-cost airline Wizz Air is to launch new flights from Kyiv to Paris-Beauvais and Brussels-Charleroi, It is has recently begun flights from Kyiv to Dortmund, Memmingen (Munich West), and Copenhagen and recently placed a third plane at its base in Kyiv to service flights to Lisbon, Tallinn and Berlin, and from Kharkiv to Katowice, ukropnews24.com reports.