6:22 AM Sunday, October 21, 2018 - Thursday, December 21
Kyiv apartment prices near construction costs; Naftogaz to return to international debt market; 200 state companies up for sale in 2018
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  • Naftogaz plans to offer $1 billion in Eurobonds in a sale in the second quarter of 2018, Yuriy Vitrenko, the company’s chief commercial officer, told Bloomberg in an interview in Kiev on Monday. It would be the first time that the state gas company taps international markets since restructuring its debt a decade ago.
  • Naftogaz hopes the Stockholm Arbitration Chamber will order Russia’s Gazprom to pay $6.5-16 billion in compensation for losing a gas transit contract dispute with Ukraine’s state energy company, Yuriy Vitrenko chief commercial officer of Naftogaz Group, tells UNIAN. The ruling is to be made in February.
  • Noting that royalties on new gas wells have been cut in half – and guaranteed for five years -- a guest opinion writer argues in Wednesday’s Financial Times: “The new tax rules make Ukraine the most attractive country in the region for gas extraction investments.” Citing “de-monopolization and liberalization of our energy markets,” Rada energy committee member Nataliya Katser-Buchkovska says Ukraine now seeks $4bn in international gas investment. She concludes: “If achieved, this would set Ukraine on course to become energy independent by 2022.”
  • Planning to increase gas production by one third over the next three years, Ukrgazvydobuvannya, the state gas producer, has signed a contract with Germany’s Bentec to buy five drilling rigs for a total of $110 million. Scheduled for October delivery, the rigs are part of the gas producer’s three year, 20-rig expansion plan. By 2020, the company hopes to produce 20 billion cubic meters. This year. Ukraine’s gas consumption is 29 bcm.
  • Ukrnafta has conducted three successful hydraulic fracturing operations at its wells. The state oil and gas production company hopes to pump an extra 63,000 barrels through fracking in 2018. Ukrnafta is searching for foreign partners for fracking, a technology which is boosting oil and gas production in the United States.
  • Ukraine’s electricity exports are up 61% through November in dollars, compared to the same period last year. So far this year, Ukraine has earned $222 million selling electricity to its western neighbors, according to the State Fiscal Service. The top buyer is Hungary, accounting for 57.5%, followed by Moldova -- 23% -- and then Poland – 14.5%. Belarus’ decision to stop electricity imports in 2018 will not effect Ukraine. Sales north are negligible.
  • In a rail turnaround, Ukrzaliznytsia’s cargo transportation is up by 2% compared to 2016, according to Yevhen Kravtsov, the acting board chairman. Ukrinform reports he told a government meeting Wednesday: “This means that the Ukrainian economy is recovering. In this process, it is extremely important that Ukrzaliznytsia be able to transport Ukrainian goods and ensure the development of Ukrainian exports.”
  • Ukraine’s solvent banks posted $80 million in net profits through October, the National Bank of Ukraine reports. Retail deposits are up 13% through November, to the hryvnia equivalent of $8 billion.
  • The National Bank of Ukraine is liquidating Rodovid Bank, which was nationalized in 2009. Similarly, the central bank is listing Boguslav Bank as insolvent.
  • Through September, four million square meters of new apartments entered Kyiv’s housing market, a 35% jump over the same period last year, the National Bank of Ukraine reports. During the first six months of 2017, construction permits issued for new apartment buildings jumped 34%. Noting that construction costs are up 15%, slightly higher than the annual inflation rate, the central bank warns: “Lowering the market value of housing and increasing the cost of its construction led to the fact that today the price has practically reached the level of the cost price.”
  • About 200 state companies are listed for sale in 2018 by the State Property Fund. The list includes: Kyiv’s President Hotel, coal mines, 13 Black Sea ports, Ukrspyrt liquor manufacturer, Dniprovsky Electric Locomotive Plant, Ukrainian Danube Navigation, and shares in several regional power companies. The government hopes to raise almost $1 billion through privatizations in 2018. The full list appeared Wednesday in Vidomosti Pryvatyzatsii newspaper.
  • Rinat Akhmetov’s Metinvest, Ukraine’s leading steel holding, increased its EBITDA by 39% through September, to $1.4 billion. According to preliminary financial results, the Mariupol-based company increased capital investments - by 55% - to $308 million. Profits were boosted by mining, where iron ore sales to the EU rose by two thirds to nearly 5 million tons.
  • On GDP growth, Concorde Capital’s Alexander Paraschiy writes: “In light of the poor grain harvest (-6% as of Nov. 1), we still expect 1.5% yoy GDP growth in Q4. For 2018, we anticipate GDP accelerating to 3.5% yoy growth.”
  • Ukraine boosted chocolate exports to EU by 35% through October, to over 10,000 tons, Olha Trofimtseva, deputy minister of Agrarian Policy and Food, tells UNIAN.
  • Neighboring Poland is the top trading partner of Lviv region, accounting for 28% of exports and 27% of imports. Behind Poland, comes Germany, with 13% of exports and 18% of imports. For exports, next comes Czech at 7% and Denmark at 6.5%. Through October, exports to the EU increased by 30% to $1 billion, according to Daily Lviv news site. The region has a nearly $500 million trade deficit, but IT exports do not seem to be counted.
  • More than $1 billion a year moves through Ukraine’s underground lotteries, Finance Minister Oleksandr Danylyuk tells reporters. He said: “Not a single penny is paid to the budget. Everything is in the shadows, while the society suffers negative effects from this business." After the Rada failed to approve a law legalizing gambling, he now intends to issue at least two lottery licenses in 2018 to draw some of this untaxed economic activity out of the shadows.
  • Kyiv’s Premier Hotels and Resorts is overseeing construction of a ‘five star’, 130-room hotel in Bukovel, the nation’s biggest ski resort. The developer, Lev Development of Lviv, hopes to finish the two-year project in early 2019, in time for the tail end of the ski season.
  • A visa-on-airport-arrival policy for Chinese visitors is credited with boosting Chinese visits by 50 percent last year, to 20,555. Now, this e-visa system will be expanded to other nations to allow visa application online before traveling to Ukraine.

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UBJ a.m. is reported by UBJ Editor in Chief. He is reachable at
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