State versus investors – Kyiv Post


Once upon a time there was a scholarship in Ukraine. He disappeared when New York reported that Lehman Brothers employees were coming out of their offices with boxes full of belongings, signaling the start of a major financial crisis. After that, there were attempts to recover the market, which came to nothing. People spoke of the stock market in Ukraine with irony and began to perceive those who still held the shares of Ukrainian companies as masochists.

Well, recent events have once again confirmed this opinion. On November 7, those few stock market investors felt robbed. Stockholders Motor Sich and Ukrnafta found no more shares in their accounts. The state decided that it needed these companies more, down to the last bit.

The authorities expropriated the titles in accordance with martial law, promising to pay something after the war. Moreover, the government put not a period, but an ellipsis, saying that these companies may not be the last. As a result, many business owners and creditors have grown tense.

This news was prominent in the Western media until the liberation of Kherson.

Makes sense, but questions remain

Yes, there is logic in the actions of the state. Each of these companies is now very important in the fight against Russian aggression. Their bankrupt factories are unable to function normally, while their products are extremely important in the fight against the Russian invaders.

Aircraft manufacturer Motor Sich, whose chairman Vyacheslav Bohuslayev was recently charged with treason, is a vital part of Ukraine’s defense industry.

Oil and gas producer Ukrnafta and oil refining company Ukrtatnafta are also crucial. Indeed, it is possible to create a vertically integrated oil company on their bases in the hope that new Russian missiles and drones will not reach Kremenchuk.

But as long as there is logic, when the forest is cut, the chips fly. And now there is even less investor confidence in Ukrainian stocks, more fears from foreign investors and creditors, and even more uncertainty.

A big question is whether all of this will be attributed to the war after it ends. After all, ambitious plans for stock market development and the launch of the second tier of the pension system are currently gathering dust somewhere.

There are a lot of questions based on mistrust. For example, why nationalize an already public company? Isn’t there a deal with an oligarch here? Who will assess the value of stocks after the war and how? Is it worth betting that the oil refinery won’t be hit by a missile? Why does Kolomoisky still control Ukrnafta and Ukrtatnafta even after nine months of war? Who’s next? And couldn’t we do the same with more elegance?

Shareholders have many questions. Foreign investors and journalists also have many questions.

Media attention

At the same time, Ukrainians do not seem to understand at all why this issue receives such attention in the Western media. british newspaper The Financial Times is the testimony. In Ukraine, the focus is on the oligarchs, especially Kolomoisky, while the West, as always, is mostly focused on principles, rule of law and procedures – all the boring stuff that gets in the way of solutions simple.

Perhaps that is why Ukrainians still do not understand why Russian assets are only frozen. Why don’t we build roads, bridges or, at worst, a wall on the border with Belarus with this money?

This difference in perception largely explains the difference in GDP per capita between Ukraine and the European Union.

You can say that we are in a time of war and that we currently have more important issues to deal with than the stock market. For some reason, I remember former British Prime Minister Winston Churchill’s line about funding the arts in wartime. The war also continues for the right to a European future, which is inextricably linked to the sanctity of the right to private property.

The opinions expressed are those of the author and not necessarily those of Kyiv Post.

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