Transcript Ukraine

Outlook for development of the
financial and capital markets in Ukraine
Prepared by Valeriy Gontarev
Chairman of the Board of Directors of the group of companies ICU (“Investment Capital Ukraine”)
June 17, 2010.
Kiev, hotel Intercontinental
EUROPEAN
FINANCIAL CRISIS
The nature of crisis in the Eurozone
Profitability of 10 year sovereign bonds
Germany
Германия
20.0
Greece
Греция
Italy
Италия
Ireland
Ирландия
Spain
Испания
Portugal
Португалия
(%)
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
дек-05 mar-06
мар-06 jun-06
июн-06 sep-06
сен-06 dec-06
дек-06 mar-07
мар-07 jun-07
июн-07 sep-07
сен-07 dec-07
дек-07 mar-08
мар-08 jun-08
июн-08 sep-08
сен-08 dec-08
дек-08 mar-09
мар-09 jun-09
июн-09 sep-09
сен-09 dec-09
дек-09 mar-10
мар-10 jun-10
июн-10
dec-05
Source: Reuters,
the«Инвестиционный
Investment CapitalКапитал
Ukraine Украина»
Источник:
Reuters,
• “All as one”, this is how investors estimated the risk of debt
instruments of the Eurozone countries before the crisis
• Now “all are different”, but the EUR currency remains “one for
all”…
Overall common budget deficit of the EC
countries
State budget deficit (% of GDP)
2004
4.0
2.0
0.0
-2.0
-4.0
-6.0
-8.0
-10.0
-12.0
-14.0
-16.0
2005
2006
2007
2008
2009
% от
ofВВП)
GDP
(%
Греция
Greece
Ирландия
Ireland
Испания
Spain
Италия
Italy
Португалия
Portugal
Германия
Germany
Евро зона (16 стран)
Eurozone
(6 countries)
Source: Eurostat
Источник:
Eurostat
• According to the Maastricht criteria, the budget deficit must
not exceed 3% of GDP
• However, not once have a number of countries in the
Eurozone violated this requirement
Excessive debt load in some countries of
the Eurozone
The consolidated state debt by the end of the period (% of GDP)
2004
140.0
2005
2006
2007
2008
2009
%от
ofВВП)
GDP
(%
120.0
100.0
80.0
60.0
40.0
20.0
0.0
Греция
Greece
Ирландия
Ireland
Испания
Spain
Италия
Italy
Португалия
Portugal
Германия
Germany
Страныевро(6
зоны
Eurozone
countries)
Source: Eurostat
Источник:
Eurostat.
• “Life beyond their means” -- before the 2008-09 global crisis
the markets allowed some countries to live on credit (often
foreign one)
• The decrease in budget deficits and, correspondingly, in debt
load is the basic thesis of economic policy
The reason for weakening of EUR is the
flight of capital out of the Eurozone
Exchange rate of USD against EUR
CDS for 5 year sovereign debts of “problem”
countries in Europe
Greece
Греция
Italy
Италия
1.55
12.0
Ireland
Ирландия
Portugal
Португалия
Spain
Испания
(%)
1.50
1.45
1.40
10.0
8.0
1.35
6.0
1.30
4.0
1.25
1.20
dec-05 mar-06 jun-06
1.15
окт-09 nov-09
ноя-09 dec-09
дек-09 jan-10
янв-10 feb-10
фев-10 mar-10
мар-10 apr-10
апр-10 may-10
май-10 июн-10
oct-09
jun-10
Источник:
Bloomberg
Source:
Bloomberg
2.0
0.0
янв-09
мар-09 may-09
май-09 июл-09
сен-09 nov-09
ноя-09 янв-10
мар-10may-10
май-10
jan-09 mar-09
jul-09 sep-09
jan-10 mar-10
Источник:
Bloomberg
Source: Bloomberg
The main current problems of the Eurozone:
debt, growth of GDP and deflation
The consumer prices inflation rate (%)
The actual GDP growth rate (%)
Ireland
Ирландия
Италия
Italy
Германия
Germany
Greece
Греция
Испания
Spain
Португалия
Portugal
ЕEurozone
вро зона (16
(6стран)
countries)
Прогноз
Outlook
(%г/г)
8.0
5.0 (%г/г)
6.0
4.0
4.0
3.0
2.0
2.0
0.0
1.0
-2.0
0.0
-4.0
-1.0
-6.0
-2.0
-8.0
2004
Ireland
Ирландия
Italy
Италия
Germany
Германия
Greece
Греция
Spain
Испания
Portugal
Португалия
Евро
зона (16(6
стран)
Eurozone
countries)
Прогноз
Outlook
-3.0
2005
2006
2007
2008
Источник:
МВФ,
World
Economic
Outlook
Source:
IMF,
World
Economic
Outlook
2009
2010П 2011П 2015П
2004
2005
2006
2007
2008
Источник:
МВФ,
World
Economic
Outlook
Source: IMF,
World
Economic
Outlook
2009
2010П 2011П 2015П
The deficit/proficit of the current account
of the EC countries payment balance
The fundamental problem is that the countries suffering from debt problems are not capable of
competing with their products in the foreign markets, which is why they constantly have deficits
of their trade balances
Ireland
Ирландия
Greece
Греция
10.0
Italy
Италия
Spain
Испания
Portugal
Португалия
Germany
Германия
врозона (6 countries)
ЕEurozone
% от
of GDP
ВВП)
(%
5.0
0.0
-5.0
-10.0
-15.0
-20.0
Q2-2007
Источник:
OECD
Source: OECD
Q3-2007
Q4-2007
Q1-2008
Q2-2008
Q3-2008
Q4-2008
Q1-2009
Q2-2009
Q3-2009
Q4-2009
MACRO ECONOMIC
SITUATION IN UKRAINE
Ukraine: the budget deficit and state debt
Deficit: official and covert
State debt of Ukraine, % GDP
О
бщий госдолг
Overall
Дефицит
государственного
The state
budget deficit,
бюджета,
официальные
official data,
% GDP
данные, % ВВП
%
GDP
(%ofот
ВВП)
12.0
Внутренний
госдолг
Internal debt
Внешний
госдолг
External
debt
35.0 debt
(%
%от
ofВВП)
GDP
11.3
30.0
Дефицит
государственного
The state
budget deficit,
бюджета,
включая
скрытый
including covert deficit,
дефицит,
%
ВВП
% GDP
10.0
25.0
8.0
20.0
6.0
15.0
3.9
4.0
2.0
10.0
1.4
5.0
1.3
0.0
2007
2008
2009
Источник:
Министерство
финансов
Украины,
Кабинета
Source: the
Ministry of Finance
of Ukraine,
theотчет
Cabinet
of
министров
Украины
Ministers report
0.0
jul-04 мар-05
mar-05 ноя-05
nov-05 июл-06
jul-06 мар-07
mar-07 ноя-07
nov-07 июл-08
jul-08 mar-09
nov-09
июл-04
мар-09 ноя-09
Источник:
Министерство
финансов
Украины
Source: the
Ministry of Finance
of Ukraine
Ukraine: the GDP growth and inflation rates
The yearly actual GDP growth rate, %
Факт
The yearly inflation rate, %
35.0
Прогноз
(%г/г)
(%г/г)
15.0
12.1
9.2
10.0
30.0
9.6
7.6
7.1
5.9
5.0
25.0
5.2
2.6
2.1
4.80 3.50
3.25
20.0
0.0
-0.2
-1.9
-3.0
-5.0
15.0
10.0
-10.0 -8.7
-10.0
-9.9
5.0
-12.2
-15.0
-14.2
-15.1
0.0
-20.0
-25.0
-22.9
-5.0
янв-00
jan-00
янв-02
jan-02
янв-04
jan-04
янв-06
jan-06
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
Источник:
Комитет
статистики
Украины
Source:
The
State Statistics
Committee
of Ukraine
Источник:
Комитет
статистики
Украиныof Ukraine
Source: The
State Statistics
Committee
янв-08
jan-08
янв-10
Jan-10
The payment balance of Ukraine
The payment balance is gradually leveling off after the crisis decline to negative values
Current
operations счета
account
(lhs)
финансового
Сальдо
balance
Current
operations
операций (lhs)
тек ущихaccount
счета
Сальдо
balance
4.0 (млрд.долл.)
Balance
of payments
баланса (lhs)
платежного
Сальдо
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
2008
Источник:
НБУ
Source: The
National Bank of Ukraine
2009
2010
Mar.10
Feb.10
Jan.10
Dec.09
Nov.09
Oct.09
Sep.09
Aug.09
Jul.09
Jun.09
May.09
Apr.09
Mar.09
Feb.09
Jan.09
Dec.08
Nov.08
Oct.08
Sep.08
Aug.08
Jul.08
Jun.08
May.08
Apr.08
Mar.08
Feb.08
Jan.08
-5.0
The merchandise trade balance and
financial account of Ukraine
The capital transactions account balance and
financial account balance
Foreign merchandise trade
Capital
transactions
account
Счет
операций
с к апиталом
(lhs)(Ihs)
ЭкExport
спорт (lhs)
(Ihs)
Other
capital(lhs)
(Ihs)
Иной
к апитал
Импорт
(lhs)
Import
(Ihs)
10.0
Портфельные
инвестиции
(ак ционерный
к апитал) (lhs)
Portfolio investments
(share
capital) (Ihs)
billion, USD
(млрд.долл.)
Кредиты
и облигации
(сальдо) (lhs)
Loans and
bonds (balance)
(Ihs)
Прямые
(lhs)
Directинвестиции
Investments(сальдо)
(balance)
(Ihs)
8.0
5.0
6.0
billion, USD
(млрд.долл.)
4.0
4.0
3.0
2.0
2.0
0.0
1.0
-2.0
0.0
-4.0
-1.0
-6.0
-2.0
Источник:
НБУ
Source: The
National Bank of Ukraine
мар-10
mar-10
янв-10
jan-10
ноя-09
nov-09
sep-09
jul -09
сен-09
июл-09
may-09
май-09
mar-09
мар-09
nov-08
ноя-08
sep-08
сен-08
jul -08
июл-08
may-08
май-08
mar-08
мар-08
мар-10
mar-10
янв-10
jan-10
ноя-09
nov-09
сен-09
sep-09
июл-09
jul
-09
may-09
май-09
mar-09
мар-09
jan-09
янв-09
nov-08
ноя-08
sep-08
сен-08
jul
-08
июл-08
май-08
may-08
mar-08
мар-08
jan-08
янв-08
Источник:
НБУ
Source:
The
National Bank of Ukraine
jan-08
янв-08
-4.0
-10.0
jan-09
янв-09
-3.0
-8.0
The nominal exchange rate of UAH against
USD and UAH real effective exchange rate
The REER
index
(real effective
exchangeобменного
rate of
Индекс
РЕОК
(реального
эффективного
UAHгрн.
against
the basket
курса
к козине
валютof) currencies)
The nominal exchange
of UAH
UAH кagainst
USD
Номинальный
обменныйrate
курс
USD (rhs)
(rhs)
90.0
•
The devaluation in October 2008
resulted in the sharp REER index
decrease, which means that
Ukrainian goods have become
more competitive in comparison
with their main trade partners
•
This facilitates a gradual trade
balance recovery that is a crucial
pre-requisite of financial stability
0.0
(грн./дол.)
80.0
1.0
70.0
2.0
60.0
3.0
50.0
4.0
40.0
5.0
30.0
6.0
20.0
7.0
10.0
8.0
0.0
jan-04 дек-04
dec-04 nov-05
янв-04
ноя-05
oct-06
-09
окт-06 oct-07
сен-07 aug-08
авг-08 jul
июл-09
9.0
FUTURE: OUTLOOK AND
REQUIRED REFORMS
The outlook for 2H 2010: quieter market for
shares, the hot ticket is VAT bonds
PFTS, UAHCPI-adj.
PFTS, USDCPI-adj.
350.0 (%г/г)
300.0Реальный* темп прироста рынка акций Украины
250.0
200.0
150.0
100.0
50.0
0.0
-50.0
-100.0
-150.0
nov-98 июн-99
jun-99 янв-00
jan-00 авг-00
aug-00 мар-01
mar-01 окт-01
oct-01 май-02
may-02 дек-02
dec-02 июл-03
jul-03 фев-04
feb-04 sep-04
jun-06 jan-07
-08 окт-08
oct-08 май-09
may-09 дек-09
dec-09
ноя-98
сен-04 apr-05
апр-05 nov-05
ноя-05 июн-06
янв-07 aug-07
авг-07 mar
мар-08
* The real growth rate is a change of the PFTS share market index, inflation factored in. Source: PFTS, Investment Capital Ukraine
•
•
•
The real PFTS index increased by nearly 300% in the period of March
2009 – April 2010. Its correction is still going on, but the volatility is
notably decreasing, so a quieter market for shares is expected in 2H
2010.
Now approximately UAH 5 billion are expected to be invested in the new
assets that is VAT bonds. The expected profitability is 22-23%.
The movement on the market for corporate bonds of Ukrainian issuers
can be expected only by the end of 2010.
The required reforms
•
•
•
•
•
•
Effective procedures of borrowers’ bankruptcies in case they refuse or
cannot repay their debt;
Refining of the system and procedures for information disclosure when
issuing securities and during their circulation;
The pension reform completion and encouraging Joint Investment
Institutions to form a pool of internal institutional investors;
Enforcing of effective monetary and fiscal policy as to decrease the value
of securities in national currency and to stimulate their issue;
Liberalisation of an outdated currency regulation
Elimination of tax preferences between different instruments of
safekeeping and accumulation of savings (which means no tax on bank
deposits earnings)
Investment Capital Ukraine
01030, Kiev, Bogdana Khmenlnitskogo Str, 19-21
Business center “Leonardo”, floor 11, office 44
Tel. 044 2200120
www.icu.ua
Bloomberg ICUA <GO>, Thomson Reuters <ICUA>