user278494

Two Ways to Invest in Ukraine

I agree with you.Many smart portfolio investors(having quite a substantial investing experience in Russia and in the CIS) still have positions in the Ukraine. Though they prefer mostly utilities(looking very cheap) and agricultural companies(Astarta,Mria... Khleboproduct).


On Sep 13 12:03 PM Duff Kovacs wrote:

> Mary - I am very pleased to see someone like you blogging investment
> opportunities in Ukraine on Yahoo! I am the head of Sales for KBC
> Securities Ukraine and based in Kyiv. KBC is a Belgian based investment
> bank with operations throughout CEE. I have lived in Kyiv for 2 years
> now and seen the boom (back half of 2007) and the bust (crisis that
> began in 2008 and, hopefully, ending now). For exposure to the telecom
> market in Ukraine you can certainly buy Russian companies MTS (MBT:seekingalpha.com/symbo...)
> which runs one of the largest cell phone networks in the country
> as well as Vimpelkom (VIP:seekingalpha.com/symbo...) which
> owns a large stake in main cell provider Kyivstar (and battling with
> its norwegian company Kyivstar partner over ownership/money). Also,
> Turkcell (TKC:seekingalpha.com/symbo...) owns Ukraine discount
> mobile brand 'Life :)' and is a rumored candidate to buy the government's
> large stake in landline monopoly Ukrtelekom (UTLM UK) which will
> give Turkcell large market share in Ukrainian telecom going forward.
>
>
> Ukraine is a heavy industrial economy with mining and metals and
> the steel industry representing about 40% of GDP. After that it's
> agriculture and heavy machinery and engineering as the main industries
> - so basically the economy has the most leverage to steel and agricultural
> commodities....and the crisis has smacked this economy very hard
> - but the economy now appears to be turning the corner with GDP growth
> expected in 2010 after a massive ~20% contraction in 2009. In 2007
> the local PFTS index was one of the best performing in the globe
> with ~130% gain...and then among the worst performing in 2008! After
> peaking at the 1200 level in Jan 2008, the PFTS index fell all the
> way to the 200 level, but since march has rebounded to the ~400 level.....so
> there is still a triple from here to get back to the pre-crisis days.
>
>
> There are about 20 investable equities/stocks of ukrainian companies
> listed on the local Ukrainian stock exchange (seekingalpha.com/symbo...),
> sister exchange to the Russian RTS exchange, which is has this year
> replaced the PFTS to be the main securities exchange. While there
> are many listed securities, there are only about 20 that trade with
> at least US$100k per day of volume/liquidity up to US$1M per day.
> The most liquid are steels like Azovstal (bberg: AZST UK) and Enakievo
> (ENMZ UK); banks like Raffeissen Aval (BAVL UK) and Unicredit/Ukrsotsbank
> (USCB UK); utilities like Donbasenergo (DOEN UK), Centerenergo (CEEN
> UK), Ukrnafta (UNAF UK) and Ukrtelekom (UTLM UK); heavy engineering
> companies like Motor Sich (MSICH UK) and Sumy Frunze (SMASH UK).
>
>
> There are more liquid and more transparent companies listed on London,
> Warsaw and Frankfurt. Ferrexpo is a large iron ore producer (FXPO
> LN), Kernel (KER PW) is a vegetable oil producer on Warsaw and Astarta
> (AST PW) is a large sugar producer - more and more ukrainian companies
> will be listing on these western exchanges when the IPO market returns,
> hopefully in 2010.
>
> Ukraine is a 'frontier market' with huge potential to grow as the
> world emerges from the financial crisis. Investors with stronger
> risk appetite can look at the local stock exchange to get involved
> with companies before they move onto the larger, western exchanges.