Plans for Ukraine

PM Arseniy Yatsenyuk (CC By NC ND Senat RP)

Verkhovna Rada of Ukraine accepted debt reduction and Saakashvili has a plan for Ukraine.

Messer Group aquires Hungarian unit of Air Liquide.

Bulgaria attracts new investors (especially from the Netherlands).

Ukraine

International experts were worried about the possible scenarios, but Ukrainian deputies have shown they are good partners for the government of Prime Minister Arseniy Yatsenyuk. They have accepted the debt reduction plan. The next steps would be passing the bills adding amendments to Tax and Budget Codex and the regulations on the stock market (because of the need of issuing new instruments – state derivatives). The new laws were also negotiated by Finance Minister Natalie Jaresko and private-sector creditor.

Thanks to that deal Ukraine’s parliament could revise yesterday the state budget – the deputies have accelerated raising social standards in the country by approx. 13 per cent from December 1 to September 1.

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A comment of David Clark from the Russia Foundation in FT that should catch Europe’s leaders eye. Clark praises Ukraine’s government and society for their effort of building new frames and fulfilling it with enthusiasm, strength and life. But he sees fault lines in the landscape. Mentioning the protests of August 31 and the fact that only three parties of five that formed the reformist government last year are in coalition now, he forecasts problems. Clark points at upcoming approval of constitutional amendment that would acknowledge a special status to separatist regions – Donetsk and Luhansk, and at winter heating season as the crucial events Ukraine will have to face this year.

He thinks it would shake Ukrainians’ moods and their belief in better future within EU structures. To avoid that crash of faith, Clark urges European leaders not to step back from Ukraine (as the country finally approved the deal on debt with private-sector bondholders – see above), but to step in and propose more financial support to the country.

Clark claims the bailout shaped by the IMF is not enough. Europe should increase its efforts and funds for Ukraine so as to: a) make sure that the country has enough energy supplies to get through the winter season, b) to back Ukraine in its negotiations with Russia on the debt amounting USD 3bn (Ukraine would withhold the repayment counting it as reparations for annexation of Crimea annexation by Russia), c) EU should project the system of bringing gas from west to east (instead of talking about Nord Stream 2 only), d) EU should make it clear that it would uphold sanctions for Russia unless it implements the Minsk Agreement and would withdraw its military forces from Ukrainian territory.

And it still would be less that USD 95bn bailout for a much smaller Greece.

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Ex-president of Georgia, now the governor of Odessa Oblast, revealed his plan of reforming Ukraine. It includes: deregulating Ukraine’s economy, revamping its civil service, reduction of corruption and attracting investment. Having in mind the EuroMaidan Revolution started 19 months ago, it’s high time to speed up.

The package of legislative proposals were announced at the Kyiv School of Economics. In the nearest future it would be submitted to presidential National Reform Council. It includes: labor law reforms (regulating relations between employers and employees through bilateral contracts), civil service improvements (projecting new schemes application process), government services reforms, reshaping of urban planning, tax code reform (introducing single 25 per cent personal tax instead of personal income tax and payroll tax) and many more.

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Hungary

Messer Hungarogáz, a Hungarian unit of German gas producer – Messer Group just bought local Air Liquide. This is 100 per cent takeover that needs to be approved by Hungarian regulators. The Hungarian subsidiary of Messer Group is one of the biggest player of industrial gas market in the country. It’s 2014 salves revenue amounted HUF 15 bn.

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Bulgaria

The central bank of Bulgaria (BNB) has just announced increase in foreign direct investment (FDI). In the first seven months of 2015 (January to July) the net inflow of foreign direct investment was up 4.8 per cent compared with an increase during the same period of 2014. It was EUR 907,3 million which is 2.1 per cent of projected GDP. Only in July 2015 FDI grew EUR 108,2 million while in July 2014 it increased EUR 69,8 million. The rise is also seen in private equity investment. But there is a perceptible weakness in real estate investments that fell. In 2015 the market attracted only EUR 25,8 million while in 2014 as much as EUR 87,2 million (in January-July period).

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What’s up in indexes?

Nervous moods at Budapest Stock Exchange. The BUX index slightly fell because investors were afraid of raising interest rates by Fed. But – what a surprise. Janet Yellen didn’t do that. Tomorrow should be better, then.

BUX index (of the Budapest Stock Exchange) was fell from 21107.42 index on Wednesday to 21040.86 on Thursday (- 0.32 per cent). From year-end it’s up 26.94 per cent.

BET (of Bucharest) ended up 0.13 per cent after being up 0.22 per cent on Wednesday. Wednesday to Thursday it grew from 7128.99 index points to 7138.08 index points. It is also up 0.78 per cent from year-end.

PX (of Prague) increased from 1002.3 index points on Wednesday to 1009.49 index points on Thursday. So it’s up 0.72 per cent. From year-end it’s up 6.63 per cent.

WIG20 (of Warsaw) ended up 0.81 per cent with 2199.46 index points (while on Wednesday it was 2181.8 index points). From year-end it fell by 5.03 per cent.

SOFIX (of Sofia) dropped by 0.36 per cent on Thursday with 445.41 index points. The day before it was 447.04 index points. And from year-end it fell by 14.69 per cent.

OMX (of Tallinn) increased from 884.60 index points on Wednesday to 887.42 index points on Thursday (up 0.32 per cent). It is up 17.53 per cent from year-end.

OMXV (of Vilnius) slid a bit. It fell by 0.83 per cent (from 487.59 to 486.76 index points) Wednesday to Thursday. But from year-end it is up 7.59 per cent.

SAX (of Bratislava) grows again. From 264.47 index points on Wednesday to 264.71 on Thursday it is up 0.09 per cent. And it grew by 19.07 per cent from year-end.

UX (Ukraine) was again down. It dropped by 0.22 per cent (and from year-end it dropped by 7.03 per cent. The result on Thursday was 960.71 index points (compared to 962.86 index points on Wednesday).

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