Page 49 - UKRRptAug19

Foreigner’s share in the total outstanding has risen to 12% of the total amount outstanding from next to nothing at the start of this year.
The amount money going into the local bond market is so great that it has been affecting the currency which has strengthened to its strongest in a decade (see above).
The booming bond sales has allowed Ministry of Finance to toughen the terms and push yields down. It also means the ministry is on track to easily fulfil its borrowing programme this year and cover or redeem outstanding debt payments coming due.
8.5.1 Fixed income - bond news
To catch the eyes of foreign investors, the Finance Ministry plans to increase 3-5 fold its issuance of 5.5-year domestic bonds, to the equivalent of $1-1.5bn, reports Interfax-Ukraine. At this volume, the bonds would be indexed and more readily traded on the secondary market. Tatyana Popovich, Alfa’s director of capital markets, says inclusion on an index draws more foreign investors.
With demand hot for government hryvnia bonds, ICU has opened its first personal service office in Kyiv – dedicated to helping walk-in customers buy hyrvnia treasuries. Located on the ground floor of Leonardo Business centre, the office will make minimum sales of UAH100,000 (currently $3,906) and will charge a service fee of $25, ICU managing partner Konstantin Stetsenko tells Interfax-Ukraine. According to Stetsenko, the tax-free bonds pay annual interest rates of 17–18% in hryvnia and 5–7% in dollars. Comparable bank deposit interest rates are 15% and 2-3%. Bank deposit interest earnings are
49 UKRAINE Country Report August 2019 www.intellinews.com