Business news from Ukraine

Business news from Ukraine

European stock indexes are declining sharply on news of two banks’ bankruptcy in U.S

Western European stock indexes are down sharply on Monday on the news about the bankruptcy of two banks in the U.S. and fears that the problems could spill over to the European banking industry.
The Stoxx Europe 600 composite index of the region’s largest companies fell 2.43% to 442.73 points by 11:25 a.m. The sub-index of the banking sector fell by almost 4%, writes Bloomberg.
The British FTSE 100 stock index was down 2.21%, the German DAX – 2.88%, the French CAC 40 – 2.59%. Italy’s FTSE MIB and Spain’s IBEX 35 lost 4.3% and 3.4%, respectively
As it was reported, the U.S. bank Silicon Valley Bank was taken over by the Federal Deposit Insurance Corporation (FDIC). The FDIC will sell Silicon Valley Bank’s assets, which will allow it to make payments on uninsured deposits. The bank’s bankruptcy was the largest since the 2008 financial crisis.
Regulators also shut down a smaller New York-based Signature Bank, which was popular with cryptocurrency holders.
The Federal Reserve (Fed) responded by announcing a new mechanism for providing funds to financial institutions to make sure they “have the ability to meet the needs of all their depositors.” The U.S. Treasury Department will allocate up to $25 billion from the stabilization fund to support the program.
The mechanism, called the Bank Term Funding Program (BTFP), provides loans of up to one year to banks, savings associations, credit unions and other financial institutions. The Fed would accept US Treasuries, federal agency bonds, mortgage bonds and a variety of other securities as collateral for these loans.
“Had it not been for regulatory support, the market would have opened much lower. However, many are selling stocks not because of a lack of confidence, but at the behest of risk management departments,” wrote Guillermo Hernandez Sampere, head of trading at MPPM GmbH. – We thought the system was more solid after (the bankruptcy – IF) of Lehman. We hope it will be a short-term storm, but it will not pass without consequences.”
Shares of Credit Suisse, the most troubled of Europe’s leading banks, fell nearly 10%, marking a new historic low. Commerzbank AG dropped 11.6%, making it the biggest loser on the Stoxx Europe 600 index.
HSBC Holdings Plc dropped 3.4% on the news that the bank is buying the British unit of Silicon Valley Bank for £1.
The key event for markets this week will be the release of February U.S. inflation data on Tuesday. Analysts polled by Trading Economics forecast that inflation in the U.S. slowed to 6% last month from 6.4% in January.
Sanofi (SPB: SNY) is down 1.4 percent. The French drugmaker reached an agreement to buy U.S. biopharmaceutical company Provention Bio Inc. for $2.9 billion.
Provention’s main asset is the drug TZIELD, the only U.S. regulatory-approved treatment designed to slow the onset of Stage 3 Type 1 diabetes.
The market value of Porsche AG drops 3.5 percent. The German luxury carmaker reported revenue growth of 13.6% last year, but the figure was worse than market forecasts.

China Elects New Premier of State Council

The session of the National People’s Congress (NPC) elected Li Qiang as the new Premier of the State Council of China.

He was nominated by Chinese President Xi Jinping, who was re-elected for a third term the day before.

Li Qiang, born in 1959, was head of the Shanghai Municipal Committee of the CPC from 2017-2022. From 2016-2017, he was head of the CPC Party Committee of Jiangsu Province, and from 2012-2016. – Governor of Zhejiang Province.

He succeeded Li Keqiang, who had led the Chinese government since 2013, as head of the cabinet.

The plenary session also elected deputy chairmen of China’s Central Military Council. They were Generals Zhang Yuxia and He Weidong.

Liu Jingguo will head the State Supervision Committee of the PRC, Zhang Jun was elected chairman of the Supreme People’s Supreme Court of the PRC, and Ying Yong was elected chairman of the Supreme People’s Procuratorate.

At a plenary session on Sunday, deputies elected deputy prime ministers of the State Council of the PRC and the new composition of the cabinet.

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Bali authorities may tighten visa regime for citizens of Ukraine and Russia

Bali authorities have asked the Indonesian government to cancel visas on arrival for Russians and Ukrainians as they try to seek work in the country by entering on tourist visas, The Jakarta Post newspaper reported, citing provincial governor Wayan Koster.
“I have written a letter to the Ministry of Foreign Affairs and the Ministry of Justice asking them to cancel visa privileges for Russians and Ukrainians,” the newspaper quoted him as saying.
In Indonesia, it is forbidden to work and create businesses for foreign nationals visiting the country as tourists.
As the newspaper notes, citizens of Russia and Ukraine abuse tourist visas and try to find a job or start a business in the country. In March, at least four Russian citizens were deported for visa violations, and immigration authorities repeatedly warned foreigners in Bali against working on tourist visas.

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U.S. dollar is actively declining against most currencies

The U.S. dollar is actively declining against most world currencies on Monday morning as traders react to news about the bankruptcy of two U.S. banks.
The ICE-calculated index showing the U.S. dollar’s performance against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona) fell 0.7% during this morning’s session.
The euro/dollar pair is trading at $1.0720 as of 8:33 a.m. Q, versus $1.0642 at the close of last Friday’s session, with the euro adding about 0.73%.
The pound sterling is up 0.65% and is trading at $1.2114 versus $1.2034 at the close of last session.
The dollar-yen exchange rate is down 0.45% to trade at 134.40 yen.
As reported, the U.S. bank Silicon Valley Bank has come under the management of the Federal Deposit Insurance Corporation (FDIC). The FDIC will sell the assets of Silicon Valley Bank, which will allow payments on uninsured deposits. The bank’s bankruptcy was the largest since the 2008 financial crisis.
Regulators also shut down Signature Bank, a smaller New York bank that was popular with cryptocurrency holders.
Investors fear the problems at U.S. banks could spill over to the global financial industry, MarketWatch wrote. However, statements by regulators about their readiness to support the banking sector, including through the provision of concessional financing, have somewhat calmed market participants.
Also traders believe that against the background of problems in the financial sphere the Federal Reserve may soften its approach to the monetary policy, having made the decision to increase the key interest rate by 25 basic points at the March meeting instead of raising it by 50 bps.

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Norway to transfer air defense systems to Ukraine

Norwegian Defense Minister Bjorn Arild Gram has announced the decision to allocate $7.5 billion for assistance to Ukraine over the next five years.
According to the website of the Ukrainian defense ministry on Saturday, the head of the Norwegian defense ministry said this during a meeting on Friday with Ukrainian Defense Minister Alexei Reznikov during his visit to Kiev.
A corresponding program has been submitted to the Norwegian parliament for approval. Gram announced that Norway plans to transfer launchers, fire control points and missiles to NASAMS anti-aircraft missile systems to Ukraine.
Reznikov discussed with Gram further consolidation of efforts in countering armed aggression by the Russian Federation and the implementation of bilateral projects to strengthen the capabilities of the Ukrainian Defense Forces.
“The high-tech assistance provided by Norway is already successfully working to protect the civilian population of Ukraine. In particular, in repulsing the last mass rocket attack on critical infrastructure facilities on March 9. Our air defense soldiers successfully used it,” Reznikov noted.

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WR Group plans to open five shopping centers in Ukraine

WR Group plans to open five shopping centers in Drogobych, Truskavets and Lviv in 2023, company founder Petr Punyak said.
“We are developing the format of shopping centers in small towns. We plan to build five shopping centers this year, including in cities with a population of 100 thousand people. People travel less to regional centers because of expensive gasoline and roadblocks, so the flow of visitors to shopping centers in small towns has increased significantly,” he said at the workshop “The Retail Real Estate Market at War”.
So, in June 2023 the company intends to open two shopping centers in Drogobych and Truskavets.
The area of the Park Shopping Center in Drogobych will be 11.8 thousand square meters (10 thousand square meters of retail space), the tenants include Silpo, Jysk, Luxoptika, Master Zoo, Allo and Prostor. The vacancy rate of retail premises today is about 20%.
The area of SC “Vector” in Truskavets is 8,4 thousand square meters (7 thousand square meters of retail area), among tenants are “Silpo”, “Allo”, Rozetka, MOYO and others.
The other three complexes will be opened in Lviv, now there is an active work, said Punyak.
In 2022, WR Group has opened shopping centers Fabrik (26 thousand square meters), Maidan (22 thousand square meters) and LAZ-695 (12 thousand square meters) in Lviv.
“About $ 60 million we have invested in three shopping centers in 2022. If we talk about this year, we also invested about $50-60 million in three shopping centers,” – Punyak told Interfax-Ukraine, specifying that his company is working with a group of investors and real estate management.
Next year the company is planning to focus on opening 3-5 thousand sq.m. shopping malls in small towns with up to 30 thousand people.
WR Group is a diversified real estate company. The company’s portfolio has eight completed projects, 107.3 thousand square meters of commercial and 57.6 thousand square meters of office space. Seven more complexes with a total area of 131.5 thousand square meters are under development and construction.

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