Demand in the government securities market is increasing

04/ 10/ 2019

Listen to online Stop     For the second consecutive year, there is a steady demand in the government securities market. The domestic stock market, which has been in stagnation since 2008, shows the first sure signals of its recovery. This opinion was reached by the participants of the expert talk of the European Business Association Securities Market: Realities and Prospects, organized jointly with Freedom Finance Ukraine. Head of the NBU Depository Department, Andrii Suprun explained the increase in activity on the local stock market by the efforts of the National Bank of Ukraine aimed at strengthening the financial system that leads to the increasing confidence in domestic government securities. It is too early to talk about the growth of the stock market, but the revival of activity is a trigger for investors they may trust the market and invest without risk, said Mr. Suprun. Recently, many regulatory restrictions have been lifted to increase the attractiveness of the Ukrainian securities market for non-resident investors. At the same time, residents’ trust should be still earned, as they are anchor investors who are ready to support the national currency and lend to the Government. It is worth noting that confidence is already gradually increasing, partly due to the implementation of sound policies to encourage such investments. If you look at the statistics, at the beginning of 2017, resident individuals invested around UAH 100 million in government securities and by the end of 2018 - UAH 6 billion. At present, this amount has reached UAH 10 billion. The participants concurred that by investing in domestic government bonds as the mass and least risky instrument, market participants can be convinced in the reliability of government securities. In addition, it is a rather liquid tool if compared to deposits with several advantages - higher yields, less taxation, 100% government guarantee regardless of the amount. Olena Logvynenko, an expert of the National Securities and Stock Market Commission, informed that the stock market currently has about 700 professional participants since so many licenses for work in the securities market are now in the hands. The CEO of the international investment holding FREEDOM HOLDING CORP. Timur Turlov is convinced that the stock market in Ukraine can demonstrate a leapfrog in development under the favourable conditions. Securities are not bought they are sold. Indeed, the market needs the active involvement of all participants and regulators. “The infrastructure will not start working itself, it is necessary to make efforts and explain to citizens they should not be afraid of long-term investments. The main problem with the securities market is a lack of trust. Developing long-lasting positive experiences is a key prerequisite for creating a mature stock market in any country. Furthermore, Ukraine has created certain preferences, including tax, for investing in government bonds, and this should serve as a good incentive for revitalizing domestic investors. That is why in the next few years we will work on increasing market activity and building confidence in it,” Mr. Turlov commented. Сo-organizer

For the second consecutive year, there is a steady demand in the government securities market. The domestic stock market, which has been in stagnation since 2008, shows the first sure signals of its recovery.

This opinion was reached by the participants of the expert talk of the European Business Association “Securities Market: Realities and Prospects”, organized jointly with Freedom Finance Ukraine.

Head of the NBU Depository Department, Andrii Suprun explained the increase in activity on the local stock market by the efforts of the National Bank of Ukraine aimed at strengthening the financial system that leads to the increasing confidence in domestic government securities. “It is too early to talk about the growth of the stock market, but the revival of activity is a trigger for investors they may trust the market and invest without risk,” said Mr. Suprun.

Recently, many regulatory restrictions have been lifted to increase the attractiveness of the Ukrainian securities market for non-resident investors. At the same time, residents’ trust should be still earned, as they are anchor investors who are ready to support the national currency and lend to the Government. It is worth noting that confidence is already gradually increasing, partly due to the implementation of sound policies to encourage such investments.

If you look at the statistics, at the beginning of 2017, resident individuals invested around UAH 100 million in government securities and by the end of 2018 – UAH 6 billion. At present, this amount has reached UAH 10 billion.

The participants concurred that by investing in domestic government bonds as the mass and least risky instrument, market participants can be convinced in the reliability of government securities. In addition, it is a rather liquid tool if compared to deposits with several advantages – higher yields, less taxation, 100% government guarantee regardless of the amount.

Olena Logvynenko, an expert of the National Securities and Stock Market Commission, informed that the stock market currently has about 700 professional participants since so many licenses for work in the securities market are now in the hands.

The CEO of the international investment holding FREEDOM HOLDING CORP. Timur Turlov is convinced that the stock market in Ukraine can demonstrate a leapfrog in development under the favourable conditions. Securities are not bought they are sold. Indeed, the market needs the active involvement of all participants and regulators.

“The infrastructure will not start working itself, it is necessary to make efforts and explain to citizens they should not be afraid of long-term investments. The main problem with the securities market is a lack of trust. Developing long-lasting positive experiences is a key prerequisite for creating a mature stock market in any country. Furthermore, Ukraine has created certain preferences, including tax, for investing in government bonds, and this should serve as a good incentive for revitalizing domestic investors. That is why in the next few years we will work on increasing market activity and building confidence in it,” Mr. Turlov commented.

Сo-organizer