How to Raise Investments and Improve Investment Climate in Ukraine

24 October 2017

Recently SE MBA class discussed investment activities in Ukraine. Serhiy Babur, MIM’s DBA and managing partner of the Profi-T Active Financial Group was a keynote speaker.

Serhiy started with explaining a rather humble position of Ukraine in the global investment marketplace. In particular, he mentioned that out of US$ 40.4 trillion of assets managed by open-end funds together with the mutual funds, exchange-traded funds (ETF) and institutional funds world-wide only US$ 1.97 million of assets were in Ukraine. In comparison, assets managed by public investment funds in Poland reached US$ 32,286 which is nearly 15 times more.

Serhiy also drew attention to the fact that return on investments was the main driver of investments. Unfortunately, Ukraine has the worst record of returns. On the other hand, profitability is high in Ukraine although it is rather a second tire importance factor.

Financial markets participants could improve the investment climate themselves if they improve corporate governance of the market participants. The following principles could secure companies’ good corporate governance:
1. Accountability;
2. Transparency;
3. Employees’ involvement.

Serhiy believes that the situation in the Ukrainian investment market may change only after big global players would come. Those companies could make international standards stick in the market which would improve the investment climate and increase the value of those companies which are ready to follow the international rules.
Serhiy’s lecture was followed by the lively discussion. He believed that it was such discussions which made MIM’s what it is now.