Cold bathroom showers are compounding the misery felt by millions of Ukrainians oppressed by the combined effects of Gazprom’s stoppage of natural gas supplies, an economy in free fall and protracted battles between the national army and Russian-backed separatists in breakaway eastern regions.
Vitali Klitschko, the heavyweight boxing champion turned mayor of Kiev, announced on Monday that all hot water provided by municipal boilers to Soviet-built apartment buildings would be shut off through “September, the end of September.”
Though hot water in older apartment buildings is typically shut off for a week or two during summer periods for pipe cleaning purposes, the drastic measure taken by authorities now is necessary – officials say – to ensure that a country without Russian imports can maintain enough natural gas in underground storage facilities to heat homes during the winter. Continue reading »
Getting caught up in a war zone ranks among the worst-case scenarios for an oil company. This has happened to Royal Dutch Shell in eastern Ukraine, where heavy fighting between pro-Russian separatists and Ukrainian military forces continues.
Shell has a hydrocarbons production-sharing agreement at the 8,000 sq km Yuzivska field, which lies across Donetsk and Kharkiv regions. A map of the field shows it covers Slovyansk, the heart of the pro-Russian military uprising.
Such proximity has affected Shell’s Ukraine operations, but only up to a point, according to the company. Simon Henry, Chief Financial Officer said on Bloomberg TV in early June that the oil giant is taking “time out on the actual drilling activity on the ground”, for security reasons. Continue reading »
By Dalibor Rohac of the Cato Institute
Can the European Union help Ukrainians get their country back on track? Notwithstanding the threat the country faces from the east, the bulk of Ukraine’s problems are domestic: lack of economic growth and employment opportunities, rampant corruption, mismanagement of public funds and burdensome regulation.
In the late 1990s and early 2000s the prospect of EU membership served as an impetus for radical reforms across central and eastern Europe. A credible timeline for joining the Union would certainly improve the prospects for similar reforms in Ukraine. On the other hand, given the EU’s internal problems and the current state of disarray in Ukraine, European leaders are not keen to rush into accession talks. Continue reading »
While the government in Kiev tries in vain to pacify the pro-Russian military uprising in the eastern regions of Ukraine, new challenges are arising in the far west of the country. The 150,000-strong Hungarian minority of Transcarpathia region is demanding more rights – including greater autonomy and dual citizenship – and Budapest is supporting them against Kiev.
On Friday, Viktor Orban, the Hungarian prime minister, said that ethnic Hungarians in neighbouring Ukraine should be given political autonomy. “Ukraine can be neither stable nor democratic if it does not give its minorities, including Hungarians, their due. That is, dual citizenship, collective rights and autonomy,” Orban said. Continue reading »
Welcome to Ukraine. You’re running a rickety business, mainly cash-in-hand, that has a big gas bill and is losing money. Your shady Uncle Vlad says he will give you cheaper gas, lend you money on suspiciously favourable terms, and perhaps see his way to giving your workers an extra something in their pay packets. In return, all you have to do is back him up in family disputes in perpetuity. Meanwhile Christine, your steely-eyed bank manager, wants you to turn down the thermostat in your offices, lay off half your staff and stop fiddling the books.
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Rinat Akhmetov, Ukraine’s richest oligarch, claimed to the Financial Times on Monday that he pleaded with Viktor Yanukovich to resign when he last saw him on February 22, two days after nearly 100 anti-government protestors in Kiev were killed amid sniper fire and clashes with riot police. Continue reading »
What price an invasion? Rising alarm at the stand-off between Russia and the west over Ukraine is feeding straight through to Russian assets including the rouble, equities, bonds and CDS spreads.
So it was little surprise that Russia’s central bank decided on Friday that its “temporary” sharp hike in interest rates this month was not so temporary after all. Continue reading »
By Dalibor Rohac, of the Cato Institute, in Kiev
Beside the professional security in front of the building of Ukraine’s Cabinet of Ministers, a small group of volunteers from the Maidan is holding guard, a reminder that the political elite is there to serve the people, not the other way round. Inside, in a quintessentially post-Soviet boardroom with heavily draped windows and photographs of stern-looking former Ministers, a senior government official tells our group that they are “a government of kamikazes.” Continue reading »
The authorities in Kiev are not only in danger of losing control of the political and military situation in the Crimea; they may also lose the major state-owned companies based on the peninsula.
On Wednesday, Rustam Temirgaliyev, Crimean first deputy prime minister, told Interfax that the Crimean authorities were planning to take over state-owned giant, Chornomornaftogaz, which implements offshore oil and gas projects in the Black Sea and Azov Sea, “in the near future”. Continue reading »
By Christopher Granville, Director of Russia Research, Trusted Sources
For investors exposed to Russia and the wider market fall-out from Russia’s military move in the Crimea, it may be helpful to recall the lessons of a previous shock that threatened to undermine the investment case for Russia. The analogy I have in mind is the Yukos affair.
Then, as now, President Putin perceived a paramount interest that he decided to pursue regardless of the high costs to business and financial market confidence. Continue reading »
While the focus in Ukraine has turned to government formation, Russia’s response, and chase-the-president, it’s worth keeping an eye on some of the economic charts.
Here’s a run down. Continue reading »
Ukrainian bonds are rallying strongly on Monday as investors digest the weekend’s dramatic events. Short term bonds issued by the sovereign and by Naftogas, the state gas company, have recovered from their recent panic levels.
But is there so much for investors to cheer about? Continue reading »
We did this a couple of days ago but here it is again: the $1.6bn bond of Naftogaz, Ukraine’s state gas company, due on September 30. If 30 per cent in less than eight months wasn’t apocalyptic enough, its yield has now gone to 34 per cent and counting. Does this look like some kind of endgame?
Source: Thomson Reuters
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This is the yield on the $1.6bn bond of Naftogaz, Ukraine’s state gas company, due on September 30 this year. Thirty per cent for less than eight months, anyone?
Source: Thomson Reuters
Continue reading »
Source: National Bank of Ukraine
Foreign currency reserves of crisis-hit Ukraine plunged $2.6bn in January, the country’s central bank revealed on Friday hours after introducing fresh capital controls that bankers warned could choke trade and boost black market business activity. Continue reading »