Ukraines stock market has dropped -80% and recorded a 1 YR RETURN +46% and +13% YTD. GDP has fallen substantially (Thx to the Putin the other man child, emotional retard) As consumer credit has fallen but seems to be stabilizing. When credit starts to expand again the economy will explode higher as loans, create deposits. MMT.
Demographics 48 million, Ukraine has a 99.4 literacy rate and produces the fourth largest number of academic graduates in Europe. So we are not talking about a bunch of uneducated retards here. Ukrainians are a highly educated people. With an average population age of 40 years old. Which is comparable to Spain, Korea, UK Canada. Side note Germany and Japan are 46, 45. US is 38 ^.^ Youngest is Mexico 26, Brazil, India 27. labor force participation 62% Same as in the US.
Unemployment 9%, wages, $300 per person per month (a lot of upside potential here.) Bank Lending Rate 12.83 %. Government Debt to GDP 79% (Low by today’s standards :P) Paying (printing)14% interest rate. FOREX USD/UAH 27. Inflation rate has fallen to 12% but stock market returns should far exceed inflation over time.Ukraine’s balance of trade has also improved which should also be good for the currency moving forward. Deficits have reduced to -1.6% which should help with the currency devaluation. MMT does not apply in this case since the core problem was “uncertainty” the real kind!
Ukraine made great strides towards reforming its financial sector by closing dozens of banks that did not meet capitalization requirements and those that had large portfolios loans and murky ownership structures. Imagine that! In December 2016 nationalization of Ukraine’s largest bank, PrivatBank finalized.
Airport traffic (which is highly economically sensitive) out of Kiev, (65% of all UKR traffic) recorded double digit growth in 2016 which is a great sign going forward.
Real estate is bottoming out but still falling around -5% in 2016. On the other hand, sales purchase agreements in 2016 were up 15% from previous year which is positive. What is important to note is that only 5% of mortgages were financed in 2016 up from 2% in 2015. This is important because as interest rates continue to fall and financing picks up, it should raise demand and prices in the years to follow.
Natural Resources: iron ore, coal, manganese, natural gas, oil, salt, sulfur, graphite, titanium, magnesium, kaolin, nickel, mercury, timber, arable land.
Overall I think this a great country to invest in. Sure you can give me a huge laundry list of all the negatives Corruption, geopolitical blah blah. But in the end of the day. This economy has great value with enormous long term upside potential. Do not forget that after Russia, the Ukrainian republic was the most important economic component of the former Soviet Union, producing about four times the output of the next-ranking republic with Its fertile black soil.
I have invested in Ukraine real estate as I believe over time I will make money in, rental income, asset appreciation, and currency appreciation simultaneously. Net Income are invested in various bond and deposit that are currently pay me roughly 12% interest which protects me against inflation while I wait for my investment to fully value. 😉 I will now look to buy Ukrainian stocks in the weeks and months ahead.
While I am not telling anyone to do what I did, this is a good quick exercise example of how I do my analysis (among other things which I won’t get into right now, this is Facebook after all.) If you wish to learn how but just never knew where to start. Always I have the MMT fundamental point of view. 🙂
As always, I hope you found this helpful. 🙂 If so, don’t be shy and donate https://www.paypal.me/Minethis1 As i have stated all donations will be added to the QMMT portfolio and 80% of profits will be returned at the end of the year back to you so you may donate the proceeds to your favorite charity. 🙂
Alternatively you can go buy a Robert Kiyosaki Book, Audio, Seminar for thousands of dollars, so he can teach you how cash is trash and to go buy Gold and nonexistent trailer parks in the middle of nowhere with your credit cards! 😛 SIGH!!!
Author Jim Boukis