Michael MacKay, Radio Lemberg, 30.12.2017
Ukraine had the best stock market in the world in 2017, but retail investors missed out because there is no such thing as a exchange traded fund with exposure exclusively to Ukraine. For the sake of liberty of capital, that has to change.
The best performing equity index in the world in 2017 belonged to Ukraine. The Ukrainian Equities Index advanced by 80% over the year, as of December 26. This was reported by Bloomberg, which noted that in May 2017 the International Monetary Fund presented its view of the Ukrainian economy as showing “welcome signs of recovery.” The IMF sees in Ukraine “a promising basis for further growth.” This is a remarkable turnaround from 2015, when the Ukrainian Equities Index had an almost 60% loss.
Volumes are low and trading is thin on the Ukrainian stock market. Market analysis is practically non-existent. What is worst, though, is that it is almost impossible for a retail investor to participate in the Ukrainian stock market. There is no exchange traded fund (ETF) holding assets that are exclusively in Ukraine. There are “Eastern Europe” ETFs that lump Ukraine in with Russia. This is completely unacceptable to an ethical investor who should be able to to choose to invest in democratic, peaceful Ukraine without being forced to invest in autocratic, aggressive Russia.
Ukraine participates in a deep and comprehensive free trade agreement with the European Union; Russia does not. Ukraine has a free trade agreement with Canada; Russia does not. Ukrainians enjoy visa-free travel to all EU member states, except for Ireland and the United Kingdom, as well as four Schengen associated countries; Russians do not enjoy this freedom.
What is missing from Ukraine’s economic renaissance is the participation of ordinary householders in the market economy. Ukrainian and EU and Canadian citizens should be able to investing their savings simply and directly in Ukraine, through ETFs and mutual funds and guaranteed investment certificates and bonds and high-interest savings accounts and stocks. They can’t invest easily now because the banks and the discount brokerages aren’t offering anything accessible. Regular people missed out on the boom in Ukrainian equities in 2017. This has to be corrected in 2018. Ukrainians have made great strides since the Revolution of Dignity of 2013-14, making good on the slogan: “Ukraine: Open to the World.” The next step is a country-specific, Ukraine-only ETF – ethical investing to build the wealth of the Ukrainian nation.