Ukrainian President Volodymyr Zelensky says he hopes for close and fruitful cooperation with new European Commission President Ursula von der Leyen. “My sincere congratulations to Ursula von der Leyen on her appointment as the first female President of the European Commission. I wish you every success and look forward to working with you in close cooperation to develop further strong Ukraine-EU relations,” he said on Twitter.
According to earlier reports, members of the European Parliament voted in support of Ursula von der Leyen’s candidacy for the post of European Commission president in Strasbourg on Tuesday.
The main pipe enterprises of Ukraine in January-June 2019 increased production of pipes made of ferrous metals, according to recent data, by 4.3% compared to the same period of 2018, to 564,200 tonnes, while in June they manufactured 87,900 tonnes.
The Ukrtruboprom association told Interfax-Ukraine, in particular the enterprises of the union for January-June 2019 raised production of pipes by 5.8%, to 426,200 tonnes, and in June the output was 66,900 tonnes.
At the same time, Khartsyzsk Pipe Plant (Donetsk region), which is located in the territory not controlled by Ukrainian authorities, is standing idle this year, just like last year.
During this period, the output of pipes at Interpipe Nyzhniodniprovsky Pipe Rolling Plant decreased by 7.9%, to 136,400 tonnes (in June some 24,300 tonnes), at Interpipe Novomoskovsk Pipe Plant increased by 5.9%, to 53,900 tonnes (8,100 tonnes). Interpipe Niko Tube raised production by 14.9%, to 209,600 tonnes (30,700 tonnes).
Dnipropetrovsk Pipe Plant increased production of pipes by 38.8%, to 13,600 tonnes (in June some 1,700 tonnes). Centravis increased output by 12.9%, to 11,400 tonnes of stainless pipes (1,900 tonnes).
KSG Agro Holding has signed an agreement on the restructuring of a loan debt to Germany’s Landesbank Baden-Wuerttemberg (LBBW).
The amount of the loan provided in October 2012 was EUR11.5 million, the balance of the debt was EUR8.3 million, the holding’s press service said. Some 33% of the debt, which is EUR3.2 million, is to be repaid. The agricultural holding borrowed the funds to buy equipment from the German company Big Dutchman for its pig farm in the village of Nyva Trudova in Dnipropetrovsk region (LLC Rantier).
“Successful restructuring means available working capital, which will be spent on developing existing projects and launching new ones in the field of crop production and pig breeding,” Chairman of the KSG Agro Holding’s Board of Directors Serhiy Kasyanov said.
As reported, KSG Agro in April 2019signed an agreement on loan restructuring to Big Dutchman with a decrease in debt from EUR4.8 million to EUR1.03 million.
KSG Agro in the first quarter of 2019 increased net profit by 1.6 times, to $3.46 million, while revenue fell by 12.5%, to $3.4 million. Financial income for the three months of 2019 included $4.3 million in profit from restructuring.
Official rates of banking metals from national bank as of july 17
One troy ounce=31.10 grams
National bank of ukraine’s official rates as of 17/07/19
Source: National Bank of Ukraine
Reaching a majority by the pro-presidential Servant of the People Party in the Verkhovna Rada, Ukraine’s parliament, or creation by it of an ideological coalition will let it quickly form a government, negotiate a new program with the International Monetary Fund (IMF) and unlock deep reforms in Ukraine, which will facilitate economic growth. Such a base-case scenario of the possible election results was described by analysts of Bank of America MerrillLynch (BoAML).
“Key political party programs suggest that the next Rada will be open to deep reforms, which were not feasible previously,” they say I an outlook published last week pending the snap parliamentary elections in Ukraine, scheduled for July 21.
Among such reforms, the analysts point to the launch of a land market with the effect of accelerating GDP growth (which is now potentially estimated at 3%) by at least 1 percentage point (pp) and an additional $1-2 billion in investment annually, as well as switching to exit capital tax, which can add to the growth of another 1 pp.
The BoAML believes that an agreement on a new program with the IMF for four years in the amount of $8-9 billion could be reached in October-November. The lack of a program remains a key risk, but in the face of large external payments in the coming years, it will be difficult for Ukraine to cope with them without cooperating with the Fund, the outlook says. In the case of a successful new program with the IMF by the end of Volodymyr Zelensky’s presidential term, Ukraine’s international reserves could increase to $25 billion, the analysts say.
According to them, the growth of Ukraine’s economy in 2019 could reach 3.2%, which will allow investors in 2021 to receive the first, albeit small, payments on the so-called GDP warrants (value recovery instruments), and this will become an important trigger for the purchase of such securities. The BoAML estimates their fair value at around 86% of the nominal value based on conservative growth and volatility assumptions, whereas recently they are quoted slightly above 70%.
As for Ukraine’s eurobonds, the analysts retain an ‘overweight’ recommendation on them: despite a significant increase in prices that has already occurred since the beginning of this year, they still have the potential to a further cuts in rates. The authors of the outlook also point to a continuing high interest in the government bonds market, where the rates on six-month government bonds are at about 17.5% with a projected average annual inflation of 8% and an expected decrease to 6% next year.
According to the outlook, the National Bank may lower its key refinancing rate this year to 16% per annum and further to 14% per annum next year with the average annual hryvnia exchange rate of about UAH 27 per U.S. dollar this year and UAH 27.5 per U.S. dollar next year.
BoAML analysts say that in 2019-2020, Ukraine will be able to achieve the upgrading of its credit rating from ‘B-‘ to ‘B+.’ In future, its securities could be traded somewhere at the level of Egyptian securities. “We think Ukraine could trade much tighter to Egypt in time, although a long-term commitment to an IMF programme and reforms would be required first,” they said.
