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bne October 2019 Companies & Markets I 13
Ukraine’s payments under GDP warrants issued in 2015 as part of the $15bn foreign debt restructuring deal.
Assuming the projected by Honcharuk 2020-2024 growth rate, the inflation rate projected by the National Bank of Ukraine (NBU), and the UAH/USD exchange rate's development in line with the hryvnia's purchasing power parity vs. the US dollar, Ukraine will have to pay about $9bn on the warrants in 2022- 2026, according to Paraschiy's calculations.
“At a discount rate of 10%, we estimate the NPV of 2022-2026 payments under the warrants amounts to $5.4bn, which is 166% of their par value (their current price is 88% of par),” he added.
"If the government is serious about the economy’s growth, the first step it should implement is to offer an exchange of the warrants into some fixed income instrument," Paraschiy wrote in a note.
The additional VRI payments will be triggered if GDP grows at more than 3% per year, and if nominal GDP exceeds $125bn (compared to approximately $85bn in 2015). Ukraine should meet both these criteria this year.
Payments under these conditions will not start before January 2021 and will end in 2040. They will be made two years
after the relevant thresholds have been crossed; for example, payments triggered by GDP data for 2019 will be made in 2021. Payments will be limited to a total of 1% of GDP in
the reference year until 2015, when this ceiling will be lifted.
On July 19, the NBU revised its economic growth forecast for 2019 to 3% year-on-year compared with its April macroeconomic forecast of 2.5% y/y.
The NBU also revised its 2020 economic growth forecast to 3.2% y/y from 2.9%. The revisions were attributed to
"stronger domestic demand, more favourable terms of trade and expectations of a larger harvest of grain crops".
Domestic demand will remain the main driver of economic growth over the coming years. Private consumption growth will decelerate, albeit remaining high owing to an increase in real household income - wages, pensions and remittances from abroad. Capital investment will continue to expand rapidly, which will also provide significant support to the economy,
the NBU added.
Economic growth will be dampened by weak global economic activity and a decrease in gas transits to "European countries starting in 2020, due to the construction of bypassing gas pipelines," the statement reads.
In March, the Ukrainian economy ministry revised downward its forecast for the growth of Ukraine's real GDP in 2019 to 2.8% y/y from 3% y/y. The ministry also forecasts 2020 growth of 3.8% y/y, and in 2021 of 4.1% y/y, according to local media.
The International Monetary Fund (IMF) has kept its forecasts for Ukraine's GDP growth in 2019 and 2020 unchanged at 2.7% y/y and 3% y/y respectively.
The European Bank for Reconstruction and Development (EBRD) has revised downward its forecast for the growth
of Ukraine's real GDP in 2019 to 2.8% y/y from 3% y/y. The multinational lender also forecasts that the nation's economy will expand by 3% y/y in 2020.
The EBRD believes that large payments on public debt scheduled for 2019-2020 pose a serious risk to the economic development of Ukraine. Therefore maintaining co-operation with creditors remains vital for the recovery of the country's economy.
We have launched a new publication bneTech
bne:Tech
May 2019 www.intellinews.com @bneintellinews
CEE Fintech Atlas: Old narratives are changing, innovations may flow now from East to West
Gunter Deuber of Raiffeisen Research in Vienna
After nearly three decades since the end of the socialist experiment many countries in Central and Eastern Europe (CEE) have made enormous progress, but they are still catching up to
their western peers. But not in fintech, which has been
Russia moves towards 5G
Russia has made another step towards launching the
fifth generation of cellular mobile communications (5G),
as state-controlled telecoms operator Rostelecom transferred companies that tested the relevant technology to its
subsidiary, Bashinformsvyaz. See page 5
Contents
CEE Fintech Atlas: Old narratives are changing, innovations may flow now from East to West 2 Russia moves towards 5G 5 IoT network to be set up in Russia 6 Russian online retailers fight for
higher duties on imported parcels 7 Wildberries leads the top 50 Russian e-commerce online stores ranked
by revenues in 2018 9
Leaders 10
Facebook and Twitter given nine more months to comply with Russian data-localisation law 11 Net profit of Russian internet major Mail.ru drops 47% in 1Q19 12 One year after ban, Telegram still accessible from Russia with growing audience 12 Russia’s Sberbank reportedly eyes
media major Rambler, registers Sber trademark 13
Investment 15
Armenia’s censor-defeating secure messaging app Pinngle announces $12mn of funding 15 MTS launches corporate fund to invest $15mn in startups 15 RWuhseseialynrdarisiveesr$b1o5omking service 16
Russian HeadHunter makes first
NASDAQ IPO since 2013 17 Russian Ozon e-commerce major
raises another loan for expansion 18
Fintech & E-commerce 19
Russia’s steel major Severstal to boost online sales 19 Russia’s Yandex said to plan cashback card with Alfa and Tinkoff banks 19 Russian retailer O’key reportedly eyed
by Yandex.Market online marketplace 20
Telecom 21
Romania’s consumer protection body
tells Vodafone to cancel price hikes 21 O2 telecoms operator in Czech Republic records Q1 profit of CZK1.24bn 21 Russia's mobile phone VEON
operator delivers sold earnings
in 1Q19, reiterates guidance 22 T-Mobile in Czech Republic saw
growth of CZK6.7bn in 1Q19 22 Turkish mobile operator Turkcell’s
profit soars 145% y/y in Q1 boosted
by unit sale 23
NIBs 24
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