EAVEX Weekly

April 03, 2017

Kyiv-listed Ukrainian equities rallied sharply last week, buoyed by news from the IMF that the board of directors will consider Ukraine’s program review today (Apr 3). The review had been abruptly cancelled on Mar 20 after Kyiv launched an official trade blockade of the occupied Donbass territories, but the quick rescheduling has provided important assurance that the program remains on track. Meanwhile, there was negative but not surprising news that Ukraine lost its case against Russia in the UK High Court in regard to non-payment of a USD 3bn Eurobond case due in late 2015. The judge rejected all defenses of Ukraine, including the Kremlin’s political pressure on the country. However, Ukraine still has immunity to cross-default despite non-payment on the so-called Russian debt after restructuring all of its outstanding commercial debt in late 2015 with a clause that a default on the Russian debt will not be considered as a default event.