have realized: whatever happens in the country,
Ukrainianeconomy is capableofworking
independently frompolitical situation.”
On theother hand, statisticsof investment
achievementsof suchcountries asGreat Britain,
FranceorHollandwhere the level of investments
varies from$170 to50billiona year,makeus
stopandanalyze the issueof thevolumeof
investments intoUkraine’s economy. It isquite
possible to resolve this issue. Aswealready know,
it dependsnot onlyonpolitical climate in the
country. Representativesof financial regulators tie
theexpansionof investment fieldofUkraine to
the level of development of financial infrastructure
and stockmarket, since for investorsof any
nationality, securities are securitieswhatever their
namemaybe in the local language.
SOMETHINGABOUTTHEMOST
IMPORTANTTHINGS
Themain thing is that, for instance, for
Euroequity there is anumber of characteristics.
They are clear toeveryone, because they
aredefinednot in local legislation framebut
rather statedby theDirectives of European
Communities Commission.
Pursuant to this Directive, Euroequity
are tradable securities with the following
specific features:
- theygo throughunderwriting and
areoffered via syndicatewith at least two
participants registered indifferent countries;
- they areoffered in significant quantities
inoneormore states in addition to the issuer’s
registration country;
- they canbepurchased initiallyonlywith
mediationof a credit organizationor other
financial institution.
Oneof themost popular formatsof
EuroequityareEurobonds. The“euro”prefixhas
been losinggradually the initialmeaning in the
titleof these securities, since theyhave longgone
outside theEuropean jurisdiction. The shareof
Eurobondson themarket of securities exceeds
90%. At this time, consolidatedcost of active
Eurobond loans equals 10%of theworldbonds
market and isnearing the level of $4 trillion. Such
ahighdemand for this financial instrument is
explainedbyhigh level of cost savingon the
market of Eurobonds,which sometimes reaches
20%. Also, theEurobondsmarket has less strict
legal regulations. Issuer’sobligations are fewer
than in theevent of theuseof comparable
formsof financing. For instance, the income from
Eurobonds ispaid fully,without taxwithholding in
the issuer’s country.Most of Eurobonds are issued
without pledgeandno limitations are imposedon
theuseof credit resources. Buyersof Eurobonds
cannotmeddle into the issuer’sbusiness.
Since1970, settlements ondealswith
Eurobonds havebeenperformed through the
twodepositary and clearing systems: Euroclear
andCedel. Operationof these systems is based
INVESTMENTSFORUKRAINE:
TOBEORNOTTOBE?
According tocertainexperts, theneedof
Ukraine for investments isevaluatedas$4-5billion
–asanecessaryamount formaintaining the rateof
economicgrowthand$20billionasconventionally
sufficient amount for successful development.
Certainly, these figures rather have todowith
wishful thinking thanwithobjectivelyachievable
reality. Therefore, itwouldbewise tocomeback
todescribing the reality. For instance, over the
past year, the rateof foreign investment increase
was thehighest over thepast 15 years inUkraine.
According to theStateStatisticsCommittee, the
increaseof consolidatedamount of foreigncapital
inflow toUkraine’s economy, taking intoaccount
the re-evaluation, losses andexchange rate
variationsover the9monthsof 2006equaled$3
billion71.7million,whichexceeds theamount of
theprevious year’s similar periodby3.4 times.
In2006, in addition to stable interest towards
financial sector (roughly $994million), investors
demonstrated interest towardsUkrainian real
estatemarket (around$400million). Foreign
investors are attractedmost of all byhigh
profitabilityof capital investment intoUkraine’s
economy. Profitability level for investments
into commercial facilities inUkraine is 12-
15%per annum, while real estatemarkets of
Poland, CzechRepublic andHungaryoffer 6%
less. Payback termof commercial real estate in
Ukraine is 3-5 years, office real estate–5-8 years,
while in EuropeanUnion these terms equal,
correspondingly, 10-15 and12-15 years.
Ifwe avoid concentratingon the volumeof
investments intoUkrainianeconomy andonly
analyze thegrowth rates, therewouldbeno
reasons todeny theopinionof amember of
StateCommissionon Securities and StockMarket
Mr. Sergey Biryuk: “foreign investors seized to
carewhat kindof coalitionUkraine is going to
have, whowill beon such coalition, etc. Investors
PROFITABILITY LEVEL
FOR INVESTMENTS INTO
COMMERCIALFACILITIES
INUKRAINE IS12-15%
PERANNUM,WHILE
REALESTATEMARKETS
OFPOLAND, CZECH
REPUBLICANDHUNGARY
OFFER6%LESS
EXPANDING
FinancialArsenal
BUSINESS EMIRATES
90
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ÓÊÐÀÈÍÀ -ÎÀÝ
