UKRAINE WEEK HIGHLIGHTS

Transcription

1 UKRAINE WEEK HIGHLIGHTS August 29, 2011: Volume of sales of industrial products in Ukraine in January-July 2011 amounted to UAH billion. In 7 months of 2010Y volume of sales of industrial products amounted to UAH billion, that means an increase of index by 30.1%. In 2010Y compared to 2009Y the volume of sales of industrial products in Ukraine increased by 33.7% - to UAH billion. August 30, 2011: The deficit of the budget of Ukraine in January-July 2011Y amounted to UAH 8.96 billion, against planned deficit of UAH 19.1 billion, the press service of the Ministry of Finance informed. The state budget of Ukraine for 2011Y was approved with total incomes in amount of UAH billion and total expenses in amount of UAH billion. Maximum state budget deficit in Ukraine in 2011 is set at the level of UAH billion. Ukraine finished 2010Y with a deficit of budget about 5% of GDP and for the current year budget deficit is planned on the level of % (with the GDP goal in amount of UAH 1.3 trillion). August 31, 2011: The National Bank of Ukraine (NBU) has decided to liquidate the problematic bank "Vladimirskiy" (Sumy), the press service of the National Bank reported. On August 31, 2011 the banking license was recalled and the liquidation process of JSCB "Vladimirskiy" was initiated. NBU official Sergey Bereza was appointed as liquidator of this bank. For the 1 st half-year of 2011 exports from Ukraine amounted to USD billion, and imports to Ukraine amounted to USD billion. Comparing with the 1 st half-year of 2010 exports grew by 42.5%, imports - by 50.8%. Negative balance of foreign trade amounted to USD 5.51 billion and comparing to 1 st half-year of 2010 it increased by 132.3% from USD billion. The biggest export shares were made to such countries, as Russia (27,1% of total exports), Turkey (6.2%), Italy (5.6%), Poland (4.3%), Germany (3.7%), Belarus (3.1%), India (2.7%). Highest volumes of import were received from such countries, as Russia (39.9% of total imports), Germany (7.8%), China (7.1%), Belarus (4.2%), Poland (3.6%), USA (3.3%), Italy (2.1%). September 01, 2011: Government of Ukraine (Cabinet of Ministers) approved it s forecast for development of Ukrainian economy in years. It involves optimistic and pessimistic scenarios. According to optimistic scenario, in 2012Y GDP of Ukraine will increase by 6.5% (inflation will be 7.9%), in 2013Y GDP growth will remain on the level of 6.5% (inflation = 6.2%) and in 2014Y GDP growth will accelerate to 8.0% (CPI = 5.6%). According to pessimistic scenario, in 2012Y GDP of Ukraine will increase by 5.0% (inflation will be 7.9%), in 2013Y GDP growth will slow to 4.5% (inflation = 5.9%) and in 2014Y GDP growth will slow again to 4.2% (CPI = 5.0%). September 02, 2011: In August 2011, the National Bank's international reserves increased by 0.99%, or USD million, as of September 1 st amounting to USD 38.2 billion. Positive balance of interventions of NBU to interbank forex market in August amounted to USD million. In July the National Bank's international reserves increased by 0.6%, or USD million, amounting to USD 37.8 billion as of August 1 st. The National Bank of Ukraine (NBU) has extended the work of the interim administration in Innovation and Industrial Bank (Inprombank, Kharkov) till November 1, The powers of Sergei Bogatyrev in the position of a temporary administrator also were extended until November. Previously, interim administration was in charge for Inprombank from September 2009 to September 2010, and in June 2011 it was once again returned to the bank. I M P O R T A N T N O T I C E : This is promotional. Please see the last page for important information and disclosures concerning eventual conflicts of interest and contacts. 29 August 02 September,

2 UKRAINE ECONOMIC OVERVIEW Exp USD/UAH exchange rate 5,05 5,05 5,05 7,7 7,985 7,9617 7,95 Nominal GDP, mln $ GDP per capita, $ Economic Growth, % +2,7 +7,3 +7,9 +2,3-15,1 +4,2 +4,5 Industrial Production Index, % +3,1 +6,2 +10,2-3,1-21,9 +11,0 +15,0 CPI, % +10,3 +11,6 +16,6 +22,3 +12,3 +9,1 +11,5 PPI, % +9,5 +14,1 +23,3 +23,0 +14,3 +18,7 +15,0 Current Account Balance, % of GDP +3,0-1,5-4,2-7,1-1,6-2,1-2,8 Budget Balance, % of GDP -2,7-0,7-1,1-1,8-8,8-5,9-5,5 Total Foreign Debt, mln $ State Foreign Debt, mln $ Reserves, mln $ Population, thnd people Unemployment rate, % 7,8 7,4 6,9 6,9 9,6 8,8 8,5 Source: National Statistics Committee of Ukraine, National Bank of Ukraine, Ministry of Finance of Ukraine 12% 4% 5% Distribution of GDP according to economic sectors in Ukraine in % 11% 7% 6% 14% 15% 3% 3% Agriculture Mining & quarrying Manufacturing industry Electricity, gas & water Construction Trade Transport and communication Education Healthcare & social aid Taxes Others Gross Domestic Product and State Debts in Ukraine, ,7% 14,8% 12,3% 2% GDP, nominal, bln UAH State Debt to GDP ratio, % 10% 8% 6% 34,6% 39,5% 4% 2% % Total State Debt, bln UAH Dynamics of Export & Import of Ukraine in Government Incomes and Expenses in Ukraine, ,0% Export, mln USD Import, mln USD Consolidated Government Incomes, mln UAH Consolidated Government Expenses, mln UAH Budget deficit, % to GDP % -5,0% -1% 29 August 02 September,

3 BANKING SECTOR OVERVIEW Rating Agency STANDARD & POORS MOODY S FITCH RATINGS Last Update July 2010 October 2010 July 2010 Sovereign Rating of Ukraine B+ (stable) B2 (stable) B (stable) Dynamics since Q, mln Q, mln Share in total the beginning of UAH USD assets, % year, % Total assets , ,3 10% 5,5% Net assets , ,8 86,5% 5,6% Loans to corporate , ,9 48,7% 3,6% Loans to individuals , ,8 17,7% -1,1% Interbank loans , ,6 3,8% 12,5% Securities , ,0 7,8% 7,1% Fixed assets , ,8 3,4% 0,1% Deposits of corporate , ,4 15,8% 10,8% of them current,% 61,6% 9,8% 5,6% Deposits of individuals , ,3 25,3% 5,8% of them current, % 23,5% 6,0% 3,3% Share capital , ,6 12,8% 0,8% Retained earnings , ,9-3,8% 4,2% Loss provisions , ,5-13,5% 4,4% Net profit -210,8-26,5 % +95,2%* * - Compared to same period of previous year Average 3 months (1st quarter 2011) USD/UAH exchange rate was used for calculations (7,9443) Capital % Assets ratio for different groups of Ukrainian banks in ,6% 10,5% 17,2% Top 10 banks Top banks Others ( banks) 10% 8% 6% 4% 2% % Profitability structure of Ukrainian banks, in mio UAH Net assets, mio UAH Own capital, mio UAH Capital vs assets, % Operating income Pre-provision income Net income 29 August 02 September,

4 INTERNATIONAL FINANCIAL MARKETS KEY DRIVERS August 29, 2011: Yosihito Noda, acting Minister of Finance of Japan, was elected as Chairman of the ruling Democratic Party of Japan and, accordingly, the Prime Minister (head of the party automatically becomes the newly elected Prime Minister due to the parliamentary majority of the Democratic Party). In the second round of voting he succeeded to overcome Banro Kayedu, acting Minister of Economy, Trade and Industry of Japan. Thus, he is the sixth Prime Minister of Japan over the past five years (by law, Head of Government is elected for four years). Consumer Prices Index in Germany, calculated by the standards of the European Union, slowed in August 2011 to 2.4% year on year, according to preliminary data published by the Federal Statistical Office of the country. In July 2011Y this index was 2.6%. Economists expected annualized inflation rates in Germany to decrease from 2.6% in July to 2.5%. August 30, 2011: The IMF lowered the forecast of growth of the US economy in 2011Y from 2.5%, forecasted 2 months earlier, to 1.6%. The forecast for 2012 also was reduced to 2.0% from 2.7%. Economy of the Euro zone, according to IMF forecasts, will grow this year by 1.9%, 0.1% below the previous estimate of 2.0%. In 2012Y the economy of Euro zone will grow by 1.4%, also lower than the previous forecast of 1.7%. The unemployment rate in Japan in July 2011Y rose by 0.1% compared with the previous month up to 4.7%. In June 2011Y the unemployment rate was 4.6% of employable population. August 31, 2011: The unemployment rate in 17 Euro Zone countries in July 2011Y did not change compared to June 2011Y and was 10.0%, and in European Union (27 countries) it also did not change compared to June 2011Y and remained on the level of 9.5%, statistical agency Eurostat reported. In comparison with July 2010Y, unemployment rate in the Euro Zone decreased by 0.2% from 10.2% of the workforce, and in the European Union it also decreased by 0.2% from 9.7%. The minimum level of unemployment in the report month was recorded in Austria (3.7%), Netherlands (4.3%) and Luxembourg (4.6%), whereas maximum level was recorded in Spain (21.2%). Consumer Prices Index in the Euro zone in August 2011Y, according to preliminary data, remained on the level of July - 2.5% on an annualized basis. September 01, 2011: The Association of British Chambers of Commerce moved the projected date of increase of the basic interest rate by the Bank of England from the current 0.5% to 0.75% to August 2012, whereas in May the organization experts expected this step in August Experts of BCC expect that the Bank of England will delay tightening of monetary policy as long as possible, despite growing inflationary pressures and associated risks in order to maintain still weak and uncertain economic growth. Experts of BCC also lowered growth forecast for UK GDP to 1.1% this year and 2.1% - next year. In June, the economic growth was expected at the level of 1.3% in 2011Y and 2.2% in 2012Y. GDP of Germany grew in 2 nd quarter of 2011 by 0.1% compared to previous quarter, and by 2.7% compared to same period of 2010Y, as it was expected by the analysts. The unemployment rate in Germany in August 2011 did not change compared to July and appeared to be 7.0%. September 02, 2011: The probability that in 2012 world economy will face the second phase (wave) of crisis increased to 60%, one of the most influential economic analysts, sometimes called as Crisis Prophet, a professor at New York University Nouriel Roubini said. "We have almost exhausted all the possible tools to prevent the economic recession. Governments are no longer able to save private banks, which appeared in difficult situation, because themselves are in the grip of the crisis of sovereign debt he said. Recession in the Greek economy in 2011 will be more significant than previously expected and may be about 5%, Finance Minister of Greece Evangelos Venizelos said. Yield on 2-year bonds of Greece during the trade on Friday increased by 358 basic points (bps) - to a record of 46.51% per annum. Yield on 10-year bonds increased by 40 basic points - up to 18.18%. 29 August 02 September,

5 MONEY MARKETS World Money Market indicators Ukraine Money Market indicators Value as of Change in Value as of Change in Week, % 1 Month, % Week, % 1 Month, % Euribor 3m % % -4.0% KievPrime O/N % % -9.2% Euribor 6m % % -4.0% KievPrime 1m % % 48.0% Euribor 12m % % -4.2% KievPrime 3m % % 9.6% Libor 3m % % 25.0% KIEIBOR O/N % % 17.4% Libor 6m % % 12.1% KIEIBOR 1m % % 39.6% Libor 12m % % 5.3% KIEIBOR 3m % % 15.0% Source: Reuters Source: Reuters, NBU USD/UAH exchange rate, 3 months EUR/USD exchange rate, 3 months USD/TRY exchange rate, 3 months USD/RUB exchange rate, 3 months August 02 September,

6 CONTACTS Head of Treasury and FI FX operations Capital Markets Correspondent relations and TF Financial market research Igor Tykhonov Vladimir Priymak Vitalina Marchenko Oleksandr Turbovets Server Sadykov PJSC CREDITWEST BANK Treasury and FI Division Ukraine, Kiev, str. Kovpaka Reuters: WFCB DI S C L AIMER This research is prepared by analysts of Public Joint Stock Company WEST FINANCE AND CREDIT BANK (hereinafter - PJSC CREDITWEST BANK ) for information and promotional purposes only and should not be interpreted as the advice to make any transaction on financial markets. It is not investment advice or an offer for the purchase or sale of any financial instrument. The information has been obtained from/based upon public information sources that PJSC CREDITWEST BANK considers reliable as of the date hereof but PJSC CREDITWEST BANK does not represent that it is accurate and complete. This research reflects our current views which may be subject to change without notice. The information and analyses discussed herein may be unsuitable for investors depending on their specific investment objectives or financial position. Any investments and trends referred to herein may fluctuate and/or be affected by changes in exchange rates. Past performance is not indicative of future results. Opinions, estimates and recommendations expressed herein may not be relied on as the only ground to effect any transaction in the financial market. Investors should make their own investigations and investment decisions without relying on this report. PJSC CREDITWEST BANK has no responsibility for third parties operations including but not limited to any other action and/or failure to act of such third parties together with positive and/or negative results of such operations carried out on the grounds of opinions, estimates and recommendations expressed herein. In addition, PJSC CREDITWEST BANK may provide banking services for, or solicits such business from, any company referred to in this report. Neither PJSC CREDITWEST BANK nor any of its officers or employees accepts any liability for any direct or consequential loss arising from any use of this report or its contents. Copyright and database rights protection exists in this report and it may not be reproduced, distributed or published by any person for any purpose without written permission of PJSC CREDITWEST BANK. 29 August 02 September,