23:50 PM Saturday, November 17, 2018 - Tuesday, February 13
China-Ukraine trade to jump 30%; Inflation of 14.1% sparks comment; Gas, oil drilling boom boosts Interpipe sales 35%; New flights to Italy and Poland
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  • China-Ukraine trade should jump 30% to $10 billion this year, Stepan Kubiv, Economic Development and Trade Minister, wrote on Facebook after a meeting with Chinese officials on Friday to discuss the Ukraine-China Action Plan. Fresh from the meeting, he hailed the “the $7 billion China is ready to invest in Ukrainian projects, including infrastructure, such as ports, the bridge [over the Dnipro] in Kremenchuk, the Odesa-Mykolaiv [cement] road, the large beltway around Kyiv, on concessionary financial terms, and another Metro line.”
  • Chinese visitors to Ukraine increased by 51.4 percent last year, to 31,114, Ukraine’s State Statistics Service report. Starting in June 2016, Chinese visitors get 15-day visas on arrival at Kyiv Boryspil or Odesa airports. Overall, 14.2 million foreigners visited Ukraine last year.
  • January's 14.1% year over year consumer inflation provokes comment.
  • Dragon Capital’s Olena Bilan writes: “Inflationary pressure is likely to remain significant this year because the economic policy will remain socially-oriented before the elections in 2019… We expect price growth will reach 9.5% y / y at the end of 2018 and 6.5% at the end of 2019…we believe that the central bank will adhere to tight monetary policy this year..the National Bank is likely to again raise the discount rate on March 1 (after three consecutive increases in October, December and January) to 350 basis points overall to 16.0% per annum.”
  • Concorde Capital’s Evgeniya Akhtyrko writes: “A massive injection of budget funds into the economy at the end of 2017 boosted consumer demand throughout the holiday season in January…Higher global prices for oil, coupled with depreciation of the national currency, drove Ukraine’s gasoline prices higher, pushing public transportation providers to raise their prices even more. We expect consumer inflation to slow from current highs only in 2H18.”
  • For the first time in a decade, Fitch rated Odesa as a bond issuer, giving the city a B- rating with a stable outlook. Since October, Fitch has given the same rating to Kharkiv, Kyiv and Lviv.
  • The IMF’s mission chief for Ukraine, Ron van Rooden, met with Prime Minister Groysman in Kyiv on Monday. Van Rooden, who has held the post since 2015, is leading a weeklong technical mission here to assess Ukraine’s compliance with the three-year-old $17.5 billion loan program that is to expire one year from now. Finance Minister Oleksandr Danylyuk has said the visiting IMF experts would give Ukrainian authorities recommendations on the Anti-Corruption Court.
  • Prosecutor General Yuriy Lutsenko has taken steps to start the dismissal process for Finance Minister Danylyuk. The moves come after the Finance Minister publicly called on Lutsenko to resign. Concorde Capital’s Zenon Zawada writes: “Danylyuk has had a feud with President Poroshenko and Lutsenko ever since becoming Finance Minister in April 2016, which has recently intensified. Danylyuk’s advantage in this conflict is that he has strong relations with IMF officials, having earned their trust.”
  • Ukrposhta, the national postal operator, sold its first bonds Monday, worth a total of 150 million hryvnias, or $5.4 million, UNIAN reports, citing the public joint stock company’s press service. According to Oleksandr Chernyavsky, first deputy General Director for Financial Issues, money raised will be used for buying new trucks and computers, upgrading equipment, and improving energy efficiency.
  • Interpipe boosted sales volumes by 35% in 2017, to 767,000 tons, the metallurgical mill company reports in a press release. Pipe sales increased 31%, propelled by sales to the US, which jumped 109% to 90,000 tons. Concorde Capital’s Dmytro Khoroshun writes: “The worldwide revival of oil and gas drilling activity, which was the reason for the increase in Interpipe’s pipe products sales in 2017, is likely to continue supporting this segment in 2018…the 20/20 strategy (to produce 20 bln cubic meters by 2020) by UkrGasVydobuvannya, Ukraine’s state-owned largest natural gas producer, has become the major growth driver for pipe product sales in Ukraine.”
  • This year, 49 new Ukrainian movies will be released, Philip Illienko chair of the State Film Agency, tells Channel 5 TV. “The most ambitious premiere of the coming months will be the emotional film The Stolen Princess. It is the second full-length 3D animated feature film in Ukraine's history, and it is likely to be a box office success.” The current hit is “Cyborgs,” the story of Ukrainian soldiers who fought to defend Donetsk Airport. Since release in December, it has earned $800,000 at the Ukrainian box office, about half of its $1.5 million budget. Half of the budget was a state grant, which does not have to be repaid. Release in Russia is not possible.
  • Reflecting the high caliber of visitors to the first Ukraine House at the World Economic Forum in Davos last month, new companies are asking about serving as corporate sponsors, Lenna Koszarny, Horizon Capital CEO and Ukraine House Davos Organizing Committee member, tells UBJ. About 5,000 people visited during the five-day meeting at Davos, sometimes called “a billionaires club.” Rather than Ukrainians talking to Ukrainians, Koszarny says seats were taken by “global investors, leaders and top officials from Europe and the U.S., as well as from Middle East, India and Asia.”
  • Ukraine International Airlines, the nation’s largest carrier, has expanded its fleet by leasing its 34th Boeing 737. UIA has an all-Boeing fleet, with the exception of five Brazilian-made Embraer regional jets.
  • Italy's Ernest Airlines intends to launch this spring three new flights to Italy from Kyiv and Lviv, according to Ukraine's Center for Transport Strategies. Ernest would fly from Kyiv Zhulyany to Bologna and from Lviv to Rome and Milan–Malpensa. The flight to Malpensa would supplement Ernest’s existing flight from Lviv to Milan-Bergamo, according to a company announcement at the BIT Milano 2018 International Tourism Exchange.
  • LOT Polish Airlines wants to launch Warsaw flights to three Ukrainian cities with no flights to Poland: Dnipro, Ivano-Frankivsk, and Vinnytsia. Also, UNIAN reports, Poland’s LOT wants to carry out Kyiv-Lviv-Warsaw and Odesa-Lviv-Warsaw flights. EU member states permit ‘cabotage,’ or allowing an airline from Country A to carry passengers between two cities in Country B. Ukrainian law is believed to allow a foreign carrier to pick up or drop off international passengers along a domestic route, but not to carry them between two Ukrainian cities.

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