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ALTERA FINANCE IG summarized the results of the last year and made some prognosis on the year 2011


Jan 5, 2011

The year 2010 was a period of activation in different spheres for investment-financial companies.

Thus in 2010 the necessary prerequisites were created for Ukrainian issuers international capital market entry. It is related, firstly, to a recovery of international capital markets and interest resumption to the companies from the emerging markets after the crisis. Ukrainian companies assessments came back to the pre-crisis level and in some cases even exceeded it. Secondly, debt finance inside Ukraine remained quite expensive and was accompanied by the raised standards of Ukrainian banks. Thirdly, many Ukrainian companies, potential IPO candidates were able to improve their economical and financial rates in 2010 comparing to the crisis of 2008. In 2010 Ukrainian Companies from agricultural and extractive industry made 4 IPO and 2 SPO on international markets, during which more than 586 million US dollars were attracted.

In 2011 agricultural and food production, also energy sector, natural resources extraction and processing will be the promising sectors of IPO. In the next year Ukrainian companies may be able to attract more than 500 million US dollars via IPO. Warsaw Stock Exchange will remain the main area for Ukrainian companies, trying to enter foreign markets of shareholders capital. For major companies with capitalization of more than 1 billion US dollars London stock exchange area will also be appropriate.

For bonds market 2010 was a year of activation of demand for bonds, both from the issuers part and from investors part.

This is mostly related to two main factors – a gradual recovery of the country after the crisis and with permission to register issue of bonds without rating them which simplifies the registration of the issue system and decreases its terms greatly.

With the economical upturn of the country in the year 2011 this tool will also be called for. SSMSC legislative projects development will influence the prospects of market development, according to which the requirements to guarantee, underwriters and insurers become tougher, also to the issuers, who issued bonds for housing projects and have broken the securities repayment terms. The rights of investors will be protected thereby.

The changes in Ukrainian laws related to the entry into force of the Law of Ukraine “On joint stock companies” affected the operation of the registrars and depositories greatly.

The process of securities dematerialization continued during 2010 – the transition of securities from documentary form into undocumented. In spite of the deadlines, stated in the Law, only about 40% of issuers have met a norm of securities dematerialization. It is related to the fact that many waited for changes which will either grant a delay or liberalize the requirements of the newly passed Law for private and public joint stock companies (a compulsory listing for public joint stock companies, a maximum number of stockholders for private joint stock companies). Also, after the dematerialization the issuers, dissolved the agreements with registrars were deprived of the consulting support. That is why the demand for corporate management was increased greatly. The demand for corporate secretary services is predicted to grow in the year 2011. Also the registration activity and joint-stock companies transformation into private joint stock companies and public joint stock companies will remain timely.

The depositories continued to work with securities dematerialization. This process was not mass in the year 2010, however it will continue next year. If there will be no shocks in financial sector, private investors will become much more active, which means a powerful push for further development of Internet trading. Mergers and acquisitions are expected to happen inside the depository market in the end of the year, since quite a big number of market participants, who received a depository license in the year 2010 will face a budget deficit in this area. 

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