ukraine | fixed income december 2010data.cbonds.info/bondcongress/ua-market-2010/...c c c 200 400...
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Еволюція ринку облігацій: апетит до ризику росте.
Ukraine | Fixed income December 2010
Андрій Герус, Конкорд Капітал
CDS down, ratings up
Page 2
Ukraine Fixed Income December 2010
Sovereign CDS, 5Y USD, bps
Source: Bloomberg, Moody’s, S&P, Fitch
Ukraine’s sovereign ratings, outlooks
Moody’s S&P Fitch
Aaa AAA AAA
Aa AA AA
A A A
Baa BBB BBB
Ba BB BB
B1 B+
(Stable) B+
B2
(Stable) B
B
(Stable)
B3 B- B
Caa CCC CCC
Ca CC CC
C C C
0
200
400
600
800
1000
Jan-10 Feb-10 Apr-10 May-10 Jul-10 Aug-10 Oct-10 Nov-10
Ukraine
Greece
Ireland
Russia
IMF deal boosts CB reserves, sovereign ratings
Page 3
Ukraine Fixed Income December 2010
Source: IMF, Moody’s, S&P, Fitch, NBU, Concorde capital estimates
IMF disbursements to the central bank and gov’t, USD bln NBU reserves cover 89% of S-T external debt, USD mln
0
10
20
30
40
50
2004 2005 2006 2007 2008 2009 2010F
Other DebtBanks DebtState DebtReserves
76%
94%
84%
86%
69%
71% 89%
Reserves/
ST Ext debt
Dec 2010
28/7/10
0.0
0.5
1.0
1.5
2.0
To Gov't To NBU
2011 2012
Page 4
Ukraine Fixed Income December 2010
Real growth 4.4%, inflation 10.5% in 2010E
Inflation expected to be 10.5% in 2010, down from 12.3% in 2009
Source: State Statistics Committee of Ukraine
Real growth stable over 2010
-60%
-40%
-20%
0%
20%
40%
Jan-
08
Apr-
08
Jul-
08
Oct-
08
Jan-
09
Apr-
09
Jul-
09
Oct-
09
Jan-
10
Apr-
10
Jul-
10
Oct-
10
GDPIndustrial productionMetallurgy
-10%
0%
10%
20%
30%
40%
50%
Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10
CPI
PPI
Public debt size is in check, cost declines
Page 5
Ukraine Fixed Income December 2010
Public debt size expected to be manageable 40% of GDP in 2010
Source: State Statistics Committee of Ukraine, National Bank of Ukraine, IMF, Finance Ministry, Bloomberg, Concorde Capital estimates
Cost of public debt declines in 2010, %
34.8%
37.5%
66.1%
40.0%
37.2%
69.3%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Ukraine
Emerging markets
World
2010E2009
Public debt, % of GDP
0
5
10
15
20
25
Jan-10 Feb-10 Apr-10 May-10 Jun-10 Jul-10 Sep-10 Oct-10 Nov-10
UAH debt (primary auctions avg. yield)
USD debt (Ukraine'12 Eurobonds YTM)
Page 6
Ukraine Fixed Income December 2010
USD/UAH stable and BoP improves in 2010
BoP: strong capital inflow (% of GDP)
Source: National Bank of Ukraine, UkrDealing, Concorde Capital estimates
USD/UAH stays stable
7
8
9
10
11
12
13
May-09 Jul-09 Sep-09 Nov-09 Feb-10 Apr-10 Jun-10 Aug-10 Nov-10
USD/UAH
EUR/UAH
-15%
-10%
-5%
0%
5%
10%
15%
2007 2008 2009 2010E 2011F
Current account balanceCapital account balanceOverall balance of payments
Equity market grows, remains volatile
Page 7
Ukraine Fixed Income December 2010
UX vs. global index performance, January 2008 to present
Source: UX, Bloomberg
0%
20%
40%
60%
80%
100%
120%
Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10
UX RTS MSCI EM MSCI CEE + CIS S&P 500
Banking sector liquidity went down
Page 8
Ukraine Fixed Income December 2010
Source: UX, PFTS, Bloomberg
Page 8
0
5
10
15
20
25
30
35
40
45
50
Jan-10 Feb-10 Mar-10 May-10 Jun-10 Jul -10 Sep-10 Oct-10 Nov-10
CDs of NBU outstanding
Banking liquidity, UAH bln
Banks ' corr. accounts
OVDP Holders: foreigners are back
Page 9
Ukraine Fixed Income December 2010
Source: NBU
Page 9
0
20
40
60
80
100
120
140
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q09 2Q09 3Q09 11M10
Foreign Investors
Other domesticLocal Banks
NBU
UAH bln
Buy VAT-bonds, Sell OVGZ
Page 10
Ukraine Equity Fixed Income September 2010
Source: UX, Bloomberg
Due to the political stability, export recovery and IMF support , OVGZ yields decreased by 12-14 p.p. YTD • 2.5-year OVGZ trade with 12.5-13% YTM • 2.2-year VAT-bonds trade with 15%-15.5% YTM
We estimate the yield for both OVGZ and VAT-bonds will be around 13,5%-14% by the end of the year
Due to large amounts of issuances and popularity among the investors, the VAT-bonds are likely to enjoy high liquidity
Recommendation as of September 2010
The forthcoming corporate bonds placement
Page 11
Ukraine Equity Fixed Income September 2010
Source: UX, Bloomberg
Issuer Maturity/put
option Amount, UAH Coupon, %
Akta Bank 1 year 50 000 000 18,0
Avers 1 year 100 000 000 n/a
Credit Agricol 1 year 500 000 000 10,0
Sberbank n/a 750 000 000 n/a
Stalkanat-Silur n/a 100 000 000 n/a
Other 1 500 000 000
Total 3 000 000 000
Page 12
Ukraine Equity Fixed Income September 2010
Source: UX, Bloomberg
Thank you for attention
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Anastasiya Nazarenko | [email protected] Marina Martirosyan | [email protected] Rostyslav Shmanenko | [email protected]
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Domestic Sales & Trading
Yuriy Pilipenko | [email protected] Alisa Tikhomirova | [email protected]
Director of Domestic Fixed Income Roland Vizner | [email protected]
RESEARCH
Director of Investment Research Rebecca Baldridge, CFA | [email protected]
Metals & Mining Andriy Gerus | [email protected]
Utilities, Machinery Yegor Samusenko | [email protected]
Oil & Gas Andriy Gerus | [email protected] Ruslan Patlavskyy | [email protected]
Agriculture, Consumer Goods Ruslan Patlavskyy | [email protected]
Economics, Financial Services Mykyta Mykhaylychenko | [email protected]
Fixed Income Andriy Gerus | [email protected] Mykyta Mykhaylychenko | [email protected]
Politics, Editing Brad Wells | [email protected]
Page 13
Ukraine Fixed Income September 2010
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