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Retrospective of the XII International PR-Festival: Panel Discussion «IR à la Ukrainian»
Downturn of the Ukrainian economy, which intensively gaining revs, forces to reflect not only on the immediate problems, but also the prospects of further development of the situation. Including how political and economic instability may affect the investment attractiveness of the country as a whole and individual business in particular.
That’s why, the participants of the final discussions of the first day of the XII International PR-Festival, «IR in Ukrainian» – Head of Investor Relations (IRO) at group of companies «Milkiland» Sergei Trifonov and economic expert Boris Kushniruk – basically were talking not about IR tools, but about investment climate, investment forecasts, external criteria of expert assessments of investment projects and investment prospects of Ukraine. Conversation was moderated by Vice President of Ukrainian PR-League, managing partner of PR-Service Elena Derevianko.
Elena Derevianko opened the discussion with brief analysis of the situation. «IR – this is an area which today is the most painful – she said. – On the one hand there is the investment optimism, on the other we see the real economic problems, see sentiments of the owners. Ukraine country ratings and ratings of individual companies are changing within a downward trend. Under these conditions how to build investors relations – aquestion the answer to which we seek today.»
Despite the negative trends in the Ukrainian economy, both invited experts were unanimous that for most investors Ukraine continues to be a promising target investment. Since its investment potential and possible risks are assessed primarily by investors in the long term.
«Today, in Ukraine a basis for positive economic expectations is being created. External experts see the situation from this viewpoint. And can draw conclusions that the investment opportunities being laid for development are extremely large,» – said Boris Kushniruk.
Partially agreed with him Sergey Trifonov, who confirmed that the Ukrainian international investors evaluate investment prospects quite positively. Nevertheless, he assessed the situation more realistically, noting that there are a number of objective factors that can’t be ignored. «Last week (early April – approx.) a meeting of Dragon Gapital took place, which represents investors and investment funds that are invested in shares of Ukrainian companies listed on the Warsaw and London stock exchanges. We can say that they have expectations, the expectations are good, it is believed that Ukraine is waiting for stabilization of the situation, and we can continue our development. At the same timethe same investors primarily take into account the different ratings and so on. Now all of the shares of Ukrainian companies are significantly cheaper. And not because the companies are bad, but because the situation is quite complicated. Therefore, investors expect for help to our country, including financial, and, assuming that we will reach some kind of macroeconomic stabilization, ready to buy attractive assets. In this regard, we have no accidents, we are normally moving to a brighter future.»
Speaking about the impact of the political situation on the investment attractiveness of the business, Sergey Trifonov said that any company in spite of the desire can’t be completely isolated from the macroeconomic problems. Accordingly, the task of a specialist in IR – is to take into account all existing and foresee potential risks. «... The company figuratively – as a cucumber in brine. Can’t be isolated from the environment. And if the country faces macro-economic problems, they are to some extent affect the business – it is impossible to avoid. This so-called country risk. The second risk – the risk of the industry, as each industry has its own advantages and disadvantages. And finally, I would call investment instinct of investor as the third. He must always weigh the risks and opportunities of a particular company. And if the company is in a challenging situation considering its business, you need to understand whether its management sees a way out of this situation, if it can make money under not ideal conditions, and when the company faces some risks.»
Both experts noted among the primary factors that negatively affect the profitability of businesses, political instability and disagreements. «For any business, it is important to keep existing and win new markets, – said Sergey Trifonov. – In this regard, we welcome the signing of a free trade agreement with the EU, and we hope that we can get access to this attractive market. We do not want to lose the existing market and Russia as well. Russia today – the largest importer of cheese in the world. Domestic consumption of cheese – 780 thousand tons along with domestic production volume of 383 thousand. This huge deficit is compensated primarily by Belarusians, who are members of the CU, then Ukraine, including our company.Behind us are the Netherlands, Germany, and Poland. By the way, our Polish neighbors in the past year have increased exports of cheese to Russia by 50%. What does this mean? The fact that our subsequent argument, clarifying of the relationship, and so on lead to the fact that not we will be on this market, but somebody else. Therefore, we are for the peaceful development and normal trade and economic relations with all key partners of Ukraine.»
Answering the final question about the image of Ukraine in the eyes of the international investment community Sergey Trifonov said the situation at the moment is quite uneven. «There are companies that are interested in international investors, but they have not yet assessed the impact of the macroeconomic situation to them. When we have real signs of stabilization, then, perhaps, and the time will come to actively invest in Ukrainian assets. But the time for that will come, most likely after the presidential election.» Boris Kushniruk in turn concluded: «If we can make the necessary inner work, then those positives, which Ukraine has – raw, infrastructure, territorial, intellectual, etc. become the objective premises for Ukraine to become a powerful European state.»