Ukraine Markets Daily (December 06, 2017)

Market news

  • Ukraine’s international reserves grew by USD 170 mn in November

Market comment

The UX index decreased by 0.6% yesterday and the PFTS index was down by 0.1% (in UAH terms). The WIG-Ukraine index increased by 0.2%. On the interbank exchange market, the USD/UAH was down by 0.4% to UAH 27.10 (mid price), according to Thomson Reuters. The official exchange rate reported by the NBU was UAH 27.22.


Ukraine’s international reserves grew by USD 170 mn in November

According to the preliminary information provided by the National Bank of Ukraine (NBU), as of December 1, 2017, international reserves reached USD 18,906 mn, growing by USD 170 mn (+0.9% m/m) during November. Since the year beginning, reserves grew almost by 22.0%. Reserves were replenished by USD 664 mn through the issue of foreign currency local bonds, and by USD 139 mn as a result of the Banks’s trading activities on the interbank foreign currency market. Meanwhile the NBU spent USD 447 mn and USD 358 mn to service its debt to the IMF and to the OVDP holders during the previous month. In addition, the Bank paid back USD 100 mn borrowed in October within the swap transaction with one of the local banks. As of December 1, 2017, the amount of international reserves covers 3.7 months of future imports and all current foreign obligations of the Central Bank and the Government.

Our view:

To cover significant payments on the sovereign debt servicing during November 2017, Ukraine’s Government decided to issue more OVDPs, instead of using international reserves, which in combination with positive result of the operations on the interbank foreign currency market led to the reserve’s growth. Previously the NBU revised its reserves forecasts for the end of 2017, reducing the final target from USD 20 bn to the level of USD 18.6 bn, which is already reached.


Although the information in this report has been obtained from sources which Empire State Capital Partners believes to be reliable and was collected in good faith, we do not represent or warrant its accuracy, except with respect to information concerning Empire State Capital Partners, its subsidiaries and affiliates, either expressly or implied, and such information may be incomplete or condensed. Nor has the information and/or data been independently verified, and so is provided without further caveat regarding its reliability, suitability for commerce or specific purpose. This report does not constitute a prospectus and is not intended to provide the sole basis for an evaluation of the securities discussed herein. All estimates and opinions included in this report constitute our judgment as of the date of the report and may be subject to change without notice. Empire State Capital Partners or its affiliates may, from time to time, have a position or make a market in the securities mentioned in this report, or in derivative instruments based thereon, may solicit, perform or have performed investment banking, or other services (including acting as advisor, manager) for any company referred to in this report and may, to the extent permitted by law, have used the information herein contained, or the research or analysis upon which it is based, before its publication. Empire State Capital Partners will not be responsible for the consequences of reliance upon any opinion or statement contained herein or for any omission. This report is confidential and is being submitted to select recipients only. It may not be reproduced (in whole or in part) without the prior written permission of Empire State Capital Partners. Any recommendations, opinions, forecasts, estimates or views herein constitute a judgment as at the date of this report. This document has been produced independently of Empire State Capital Partners and the recommendations, forecasts, opinions, estimates, expectations, and views contained herein are entirely those of the research analyst(s). While all reasonable care has been taken to ensure that the facts presented herein are accurate and that the respective recommendations, forecasts, opinions, estimates, expectations, and views are fair and well considered, none of the research analyst(s), Empire State Capital Partners or any of its directors, managers or employees has verified the contents of this document and, accordingly, no research analyst, Empire State Capital Partners or any of its respective directors, managers or employees shall be in any way responsible for its contents.

Kind regards

Research Team