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03.03.2010
Credit-Rating publishes review of Ukraine’s economy in January 2010
Credit-Rating has today published review of the state of Ukraine’s economy in January 2010, which gives assessment of the real and of financial sectors of economy, balance of payments, currency and stock markets, state debt policy and budget sector.
Credit-Rating notes that the revival in the real economy sector was fueled not only by resumption in the industrial sector, but primarily by growth of economic activities at certain companies, and by low comparison benchmarks of the previous year. We expect low rates of resumption in real economy sector under existing environment in the market of raw materials.
The negative trend of January 2010 was increasing negative national payment balance versus the previous month by almost 5 times due to low pace of foreign investments under increased payments on external obligations of the private sector, and population’s anticipations of depreciation of the national currency and accumulation of foreign currency outside the banking system. Credit-Rating believes that subsided political tensions after the presidential elections should have positive impact on inflow of foreign investments, and, consequently, on the national payment balance.
The negative payment balance had no substantial impact on currency market in January 2010. The currency market’s activity was comparatively low, with the volume of transactions shrunk by almost 50%. The negative currency interventions of the National Bank in the amount of UAH1.1bn resulted in decrease in reserves and were connected with sale of the currency in order to make payments for the natural gas supplies.
Despite the fact that in January 2010 the regulator continued to withdraw free resources from the banking system, the amount of funds on the banks’ correspondent accounts remained stable. The cost of inter-bank resources remained low too, which was prompted by absence of necessity for their urgent substitution, and by low lending activities of the banks. In January the trend of gradual return of population’s funds withdrawn earlier, has retained. As in the previous month, the growth in the amount of deposits was fueled by the national currency, which, in Credit-Rating’s view, was prompted by higher rates by this type of deposits and stabilization of hryvnya’s exchange rate.
Credit-Rating also notes retention of the problems in the budget sector, to name a few are the necessity in repayment of a significant share of the State budget’s accounts payable, which were recorded at UAH2.3bn for 2009, growth in the deficiency of the pension fund, problems associated with VAT compensations, etc. Even though, the budget receipts at UAH328.3bn (according to the Government’s Resolution #1414) can be fulfilled. The agency thinks that the direct debt burden on the budget has moderate nature.
In Credit-Rating’s view the decline of 45% in the volume of stock market versus the previous month was associated with traditionally low market’s activity in that month. The structure of trades has not virtually experienced any changes. Olga Shubina, a Credit-Rating’s Director for Rating Researches Department thinks that the retention of high specific gravity in the market of state securities was underpinned by banks’ and NBU’s transactions aimed at purchase of Naftogaz of Ukraine NJSC papers (contributed earlier by the Government for augmentation of the company’s authorized stock) for funding payments for natural gas supplies.
Review of Ukraine’s economy in January 2010 (rus)
Credit-Rating agency has operated in the Ukrainian market since 2001 being committed to assignment of the national scale ratings. The agency has assigned 1081 ratings since start of its activities. As at March. 1, 2010 the Credit-Rating’s list of ratings is represented with 662 ongoing ratings: 508 in corporate, 105 in financial, and 49 in municipal sectors. In February 2010 Credit-Rating has assigned 8 credit ratings, revised 19 ratings, suspended 5 ratings and withdrawn 15 ratings.
Information on all credit ratings assigned in accordance with the National Rating Scale may be found in REUTERS and BLOOMBERG information systems.
For more information, please contact:
Information and
analytic department
Sergey Rozumyak +38044490 25 50
SRozumyak@credit-rating.com.ua
Denis
Rudenko
