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Ukraine to join Clearstream post-trade services provider in 2019

Clearstream expects to open an access for foreign investors to domestic state bonds of Ukraine in the first quarter of 2019
17:21, 1 October 2018

Leaprate

The post-trade services provider Clearstream, Deutsche Börse Group, and the National Bank of Ukraine (NBU) assume the joint efforts to open the access for the foreign investors to the Ukrainian state securities through Clearstream as the press service of NBU reported.

Clearstream expects to open an access for foreign investors to domestic state bonds of Ukraine in the first quarter of 2019.

“Such step will allow the settlement of all domestic state bonds in hryvnia through the international system Clearstream, increasing the efficiency of the settlements and at the same time, decreasing their price for the investors,” the NBU reported.

Related: Sberbank of Russia not intended to close Ukrainian branch

It is expected that by making local government securities eligible in Clearstream the demand for Ukrainian government bonds will increase, thereby boosting their liquidity and attractiveness in the international market.

As a result, the Ukrainian government will benefit from a wider range of sources of long-term funding and a lower cost of borrowing. Moreover, the offering will improve the currency structure of public debt and transmission mechanism of the NBU monetary policy, while contributing to the further development of the Ukrainian capital markets.

Related: NBU refuses Belarusian bank to purchase of Sberbank branch in Ukraine

Chairman of the NBU Yakiv Smoly claimed: “Enabling settlement of government securities in hryvnia in Clearstream’s system is a significant step towards Ukraine becoming a full-fledged participant of global capital markets. Ukraine’s integration into the world-wide financial system will help to increase the inflow of foreign capital to the Ukrainian economy and will strengthen its financial stability.”

Related: Appeal court arrests stocks of Russian banks in Ukraine’s capital

Philippe Seyll, the Co-CEO Clearstream Banking S.A. noted: “We are delighted to get an access to the Ukrainian capital market by our local partner – the National Bank of Ukraine. It is a part of our general strategy in the CIS and Central Asia countries – we connect new capital markets of this region to our global network. It increases their attractiveness to the international investors, forming their effective and stable post-trade environment.”

Earlier we reported that Ukraine ranked 134th (out of 152) in the rating of countries by the economic freedom index. The index is calculated on the basis of 42 indicators joined in 5 key categories: size of the government (top marginal tax rate, government enterprises, and investment), legal system and property rights, sound money, freedom to trade internationally and regulation.

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