Page 9 - UKRRptNov19

32% of their employees were unofficial and 45% of salaries went undeclared.
2.3 Ferrexpo stock crushed by corruption scandal and falling iron prices
The value of the shares of leading Ukrainian metallurgical company Ferrexpo listed on London Stock Exchange (LSE) are down 40% since the end of July as the company is plagued by a corruption investigation and falling iron prices.
The company has been looking into the possible misappropriation of funds at the Blooming land charity, which is controlled by the company, although it has stopped contributing to the fund in May. The company said that it could not account for the disappearance of some $110mn from the fund.
To make things worse Ukrainian anti-corruption authorities opened a second case at the end-September saying Ferrexpo’s majority owner, Konstantin Zhevago, may be indicted in the misuse of UAH2.5bn (c$100mn), alongside two top managers of the local Finance and Credit bank, which he controlled.
Zhevago was not in the country and had travelled to London for “urgent medical treatment” according to his spokesman. The Ukrainian authorities have followed up by proposing his name be added to the international wanted list.
At the same time iron ore prices have fallen 20% over the same period driving the stock lower, which was once an investors darling following its listing on the London market.
As it was not already obvious, BCS Global Markets reaffirmed its Sell recommendation on of the stock on October 9 and forecast the stock will fall another 20% from here to GBP1.6 per share.
BCS added that on top of Ferrexpo’s legal troubles iron ore prices may have further to fall on the back of the looming global slowdown.
“We believe iron ore prices still have material downside risks going forward, as global oversupply remains and will continue to grow as Vale’s production restores, while other global players compete for the Brazilian miner’s market share. Our long-term view remains unchanged – in the next several months, iron ore prices will fall to $50-60/t from more than $90/t now,” BCS GM said in a note.
2.4 New tougher restrictions on foreign ownership of land proposed
Ukraine's parliament, the Verkhovna Rada, published a new draft law on farmland reform on October 11 that diverges from liberal reforms presented in the Cabinet draft in late September, reports Concorde Capital.
The new draft keeps the farmland market launch for October 2020, but it imposes stricter limits on land bank ownership by a single entity to no more than 35% of the land of the local community. There were no limits on how
9 UKRAINE Country Report November 2019 www.intellinews.com