The NBU calls for preparing the capital market of Ukraine for investments for post-war recovery
Ukraine should already prepare the infrastructure of the capital market to attract private and international investments for post-war reconstruction. About this stated Kateryna Rozhkova, first deputy head of the National Bank of Ukraine.
“We will not build a second London Stock Exchange, but our capital market must be commensurate with the size of the economy. It is important that Ukraine not only passes a law, but also prepares the infrastructure of the financial market for post-war recovery.” Rozhkova noted.
According to her, the creation of an efficient capital market is a priority both for the NBU and for international partners, in particular the European Commission.
“We hope for investments, private and from our international partners. It is important that the market is ready for this.” – added Rozhkova.
At present, the domestic market is dominated by bonds of the domestic government loan, which is natural in times of war. However, examples of alternative instruments are already appearing — among them Nova Poshta bonds and NovaPay. According to the deputy head of the National Bank, the issue of municipal bonds is a promising direction.
“For companies and municipalities, involvement in the stock market is a good alternative source of replenishment of working capital and financing of investments in development. It is cheaper than bank lending, obviously. But the necessary tools and procedures have not yet been developed”, – she remarked.
Rozhkova mentioned the successful integration of the NBU depository with the ClearStream international depository in 2019, which became possible thanks to the creation of the corresponding “link”.
“Now we want to expand this “link” to municipal and corporate bonds. But this requires changes in procedures and new solutions in the regulatory infrastructure.”, she explained.
Rozhkova pointed out the limitations in the current amount of bank capital: the banking sector of Ukraine is ten times smaller than in Poland, which makes it difficult to finance large projects. She named syndicated loans and raising funds directly through parent Western banks as one of the options.
“Yes, there is an option of syndicated lending. Just this year, we issued a syndicated loan in one of the strategic directions: state and private banks joined together and issued a loan.” – Rozhkova explained.
She emphasized that global practice shows that the capital market is the main mechanism for attracting funds to large-scale infrastructure projects. That is why, in cooperation with the National Securities and Stock Market Commission, a joint vision for the further development of this segment in Ukraine is already being formed.
