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Ukraine is ranked 72 out of 134 countries in the 2009 Global Competitiveness Index, showing little improvement over the previous year. Ukraine falls right in between Morocco and the Philippines as far as the index is concerned. The areas Ukraine is the weakest in are institutional environment, infrastructure, macroeconomic stability, and goods market efficiency.

Not being sure how the rankings in this index are tabulated, I have to say the new Ukraine presents a different picture. Of course, there are still negatives such as poor legal protection of investments, corruption and double standards, and contradictory legislature. However, there are so many good things coming out of Ukraine recently. And there is so much geographical potential.

The report also states that Ukraine is in line with the major European countries as far as secondary education, and outperforms these countries when it comes down to market size. In addition, the Ukrainian economy is expanding at a rate well above the European average. With 47 million consumers it is the greatest market in Eastern Europe. The new generation has produced a highly competitive, educated, and skilled workforce taking advantage of the country's university system. The location is a key location intersecting the major railways, ports, and roadways in Europe. It is a prime location for manufacturing with easy exporting to Russia and the EU. It boasts strong technical capabilities with specialized knowledge. Also, the country is considered to be in the top 10 by the prospects of retail development. The recent decrease in exports and the Hryvnia drop against main currencies created a favorable environment for Ukrainian production development to replace imports and increase exports. Though the negatives make investing in Ukraine a bit unpredictable and some analysts will warn you to stay away until the politics calm down, the positives make this country a great investment opportunity.

A great way to indirectly invest in the Ukraine is through Central European Media Enterprises (NASDAQ:CETV). This media broadcasting company owns and operates television channels and stations in Central and Eastern Europe. CETV generates most of its revenue from advertising. The company maintains an above average revenue growth in comparison to the industry. The stock price dipped in line with the market late last year and though it is now experiencing consistent growth, it still has a long way to go before it returns to its previous highs. CETV penetrates, or monopolizes if you will, their market to reach an impressive 88 million of about 97 million total citizens. If you are in the market for a long-term holding, this should prove a great time to get in on this stock.

Another solid Eastern European company serving the Ukraine market is Vimpel-Communications (NASDAQ:VIP). This wireless communications company has more than 57 million active mobile subscribers, resulting in $331, 977 million in sales compared to its top competitor Mobile Telesystems (NYSE:MBT) that reported just $9,062 million in sales. VIP definitely has a corner on the market. The corporate agenda includes consolidating the Russian market, exploring opportunities to enter adjacent businesses, and expanding geographically both inside and outside the CIS. The stock split 5:1 in 2007 and still maintains a consistent growth pattern in line with what is seen in CETV's growth.

It is nearly impossible to find Ukraine-based companies that are listed on US. exchanges. Most Ukrainian companies are listed on European exchanges such as London or Berlin, or else they are available as pink sheets. The country itself is still torn between Western and Russian loyalties. Emerging markets ETFs such as EEM and others only have slim holdings in Ukraine. This is still considered by most analysts a frontier market. The best way to invest and also avoid the unpredictability and legal confusion with investing in this country is to look for companies based elsewhere that operate in Ukraine, such as CETV and VIP which I have mentioned here. Hopefully with the now skilled and educated workforce we can see a change in legislation that will lead to more Ukrainian companies listed on Western exchanges so that investors can more readily optimize on Ukraine's positive attributes.

Disclosure: No positions.

Source: Two Ways to Invest in Ukraine