Dmytro Tarabakin, Commissioner National Securities and Stock Market Commission, presentation on Adam Smith Institute`s Ukrainian Wealth Management Forum 2019
Investment opportunities in the capital market: Comississioner’s view
1. Investment opportunities
in the capital market:
Comississioner’s view
Dmytro Tarabakin, National Securities and Stock Market
Commission of Ukraine
2. CORPORATE LAW - INNOVATIONS
Implementation of the EU
Transparency Directive into
national law - requirements
for public companies in
Ukraine are the same as in
Europe
Corporate governance has
progressed in the banking
sector and is developing at
SOEs
Independent members have
majority on the supervisory
boards at SOEs, at public
companies - they have a third
The law on squeeze-out and
sell-out, although not perfect,
but works. 301 corporate
actions completed
The first public offer of
corporate bonds completed
(TASKOMBANK) The law implementing a
bondholder’s meeting and a
bond issue administrator is
pending review in the
Parliament
3. UKRAINE'S PROGRESS IN
DOING BUSINESS
2015 2016 2017 2018 2019
109
88 70 81 72
45
2020
RATING COMPONENT
"PROTECTING MINORITY INVESTORS"
IN 5 YEARS +64 STEPS IN
THIS COMPONENT DUE
TO THREE LAWS
MAXIMUM GOAL FOR 2021
IS TO BE IN THE TOP-10
IN THIS COMPONENT
DIRECTOR LIABILITY INDEX
- WILL BE IN FOCUS
4. PRIMARY GOVERNMENT BOND MARKET
12,4%
primary
dealers
The cost of borrowing in UAH, 2019
- GOOD PREREQUISITE FOR THE CORPORATE BOND MARKET TAKE OFF
12
18,50% 18,50%
18,00% 17,98% 17,95% 17,95%
16,50% 16,30%
15,50%
14,65%
14,10%
17,25% 17,25% 17,00%
16,00% 16,00% 15,85% 15,45% 15,30%
14,75% 15,05%
12,40%
January February March April May June July August September October November
1-year OVDP 3-year and more OVDP
5. SECONDARY GOVERNMENT BOND MARKET
21,7 18,9 20,5 21,2 20,5
15,3
28,6
15,0
17,9 16,9 14,5
January
February
March
April
May
June
July
August
September
October
November
Trading volume on exchanges
billion UAH
market
makers5
CONSOLIDATION OF TRADING PLATFORMS WOULD BRING MORE TRANSPARENCY
6. NATIONAL WEALTH
FUND
40 main SOEs, privatization
of which is restricted, to be
transferred for professional
management
100%
The owner of the Fund:
40 SOE
AIM
TO CREATE A
CAPABLE STATE
INSTITUTION FOR
MANAGEMENT OF
STRATEGIC
STATE-OWNED
COMPANIES
STATE
7. Minority stakes (10-20%) of about
20 SOEs from the NWF shall be
transferred to the portfolio of NIF.
To be manageted by a global leader
in asset management. The estimated
net asset value - $4-5 billion.
IPOs AND
ATTRACTING
PORTFOLIO
INVESTORS
NATIONAL INVESTMENT
FUND
10%
IPO та SPOBefore ІРО – 100% owned
by the state
After ІРО – the state,
foreign and local investors
$500 millions
AIM
8. WHAT UKRAINE GETS
FROM LAUNCHING NIF
Attractive
financial
instrument for
foreign and
Ukrainian investors
- good indication
for SOE’s market
value
Preparing of SOEs
for their own IPOs
or successful
privatization
Implementation
of the best
practices of
corporate
governance at
target 20 SOEs
Expanding
opportunities to
finance the
development of
these SOEs
10. The total cost of
the PFU for
payment from the
public pension
system, UAH billion
311,8
The lack money of
the PFU (financed
from the state
budget), %
44%
І LEVEL - PUBLIC PENSIONS
The total number
of pensioners,
millions of
people
11,3
The replacement
rate of the average
wage, %
33%
UNABLE TO PROVIDE A SATISFACTORY STANDARD OF LIVING
AFTER RETIREMENT
11. The total value of
assets of private
funds, billion UAH
2,89
The total number
of participants in
private funds,
thousand people
860
ІІІ LEVEL- VOLUNTARY PRIVATE PENSIONS
The share of
employees
participating in
private funds
6,5%
LOW DEVELOPMENT OVER THE LAST 15 YEARS
12. ІІ LEVEL - MANDATORY PRIVATE PENSIONS
CLEAR
Global standards
High requirements for providers
Constant monitoring efficiency
Transparency and responsibility
RELIABLE SUFFICIENT
One administrator
Easy choice of provider
Automatic distribution of
passive participants
Clear options for investment
portfolios
Increased replacement rates
Contributions - from 2% to 8%
Minimize administrative costs =
pension saving
Exemption from taxes at all
stages
EXPECTED REVENUES IN THE FIRST YEAR OF
IMPLEMENTATION OF MPP, BILLION UAH30