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Clearstream’s connection will be instrumental to the development of Ukraine’s capital markets - ICU

June 26, 2019 | Cbonds

The recent introduction of Clearstream represents a great opportunity for international investors to invest in Ukrainian local governments bonds said panelists at joint-forum organized by EBRD and ICU on connecting Ukraine’s capital markets to international investors. With foreign investors' holdings in domestic government bonds already increasing to more than 51 million hryvnia, the introduction of Clearstream will only enable it grow further.

Speakers at the forum gave credit to the significant progress made in Ukraine in the last five years. However, all agreed it is crucial to continue to accelerate the implementation of reforms to spur sustainable economic growth.

The forum sponsored by ICU, an independent asset management, private equity and investment advisory firm specialising in Central and Eastern Europe. This forum marks the first in a series of panels organized by ICU to tackle and discuss the global macroeconomic trends that are shaping the future of Ukraine's economy and investment industry.

The event took place in London, June 24, 2019 and was organized in collaboration with Ukraine Ministry of Finance, National Bank of Ukraine and Clearstream.

Konstantin Stetsenko, Managing Partner at ICU, said:
“As the largest market operator, we communicate with investors every day and we know first-hand how much investments Ukraine has lost due to the complicated procedure for buying government bonds that was in place before. Thanks to the National Bank's currency liberalization and link with the Clearstream, Ukraine will not only receive a new inflow of investments but will become much more accessible and attractive to a wide range of investors.

As the Wall Street Journal recently noted, investors are now snapping up exotic currencies. Experts mentioned Egyptian pound and Ukrainian hryvnia as most popular of the exotic currencies. The former has climbed 6% against the dollar since January, the latter has increased by 5%. Infrastructure changes along with the favourable situation on global markets allow us to consider the Ukrainian government bonds market with optimism and expect an influx of new investors.”

André Küüsvek, Director of Local Currency and Capital Markets Development, EBRD, commented:
“The connection to Clearstream marks a big milestone in Ukraine’s capital market development as international investors are now able to freely transfer Ukrainian Hryvnia-denominated governments through the system’s international links. While not only improving efficiency in line with international standards and reducing costs, it will also provide reliable sources of funding, thereby fortifying financial resilience and sustainable growth in Ukraine. The EBRD is very pleased to see this landmark achievement!”

Oksana Markarova, Minister of Finance, Ukraine, said:
“The access to Clearstream represents a crucial landmark for Ukraine as it allows foreign investors to participate in the local market. This is one of the key priorities for us; we have a strong belief in the local market and this development will result in foreign investors becoming more active in it. They will benefit from long-term financing and participate in the success of Ukraine with Ukrainians. Investments from international investors into Ukrainian local government bonds currently stand at 51 million hryvnia, more than seven times the amount seen in the beginning of the year.

We remain committed to accelerating reforms that will not only help provide more liquidity in the market but will also reduce the state’s need for financing in foreign currency and will also lower currency risks.”

Oleg Churiy, Deputy Governor of the National Bank of Ukraine said:

“Clearstream link opening simplified access for foreign investors to Ukrainian government securities. It will foster long-term investments in hryvnia instruments, reduce the state’s need for financing in foreign currency and respectively currency risks.”

Company: ICU

Full company nameICU
Country of riskUkraine
IndustryFinancial institutions

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