Saturday, September 24, 2016

Ukraine on the way to recovery

UAToday:

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Four years on, with investors starting to look past the festering conflict in the nation's east, spending on agriculture and real estate is once again gathering pace. Second-quarter capital investment surged almost 18 percent from a year earlier and 9 percent from the previous three months, data this week showed.

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"Investment started to increase earlier than we expected," said Olena Bilan, chief economist at investment bank Dragon Capital in the Ukrainian capital of Kyiv. "We expect it to expand further in the second half of the year as the economy was heavily underinvested over last two years and many companies need to upgrade equipment."

In order to have sustained recovery the conflict in the eastern part of the country needs to be resolved. I do see an eventual arrangement where the Donbass area remains part of Ukraine but has a certain amount of autonomy from Kiev. 

However this may take some time as there are many factions in the country that really have quite a bit of animosity towards the ethnic Russians in the east. Unfortunately politicians take advantage of this emotion and this leads to a lack of progress.

I am optimistic on Ukraine and it was so cheap I am playing it through agriculture (Agroton and Astarta). Also my holdings in gas producer Cub Energy.

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