Fixed Income
Ukrainian sovereigns finished last week marginally higher amid continuing robust international risk appetite, with Ukraine-22s inching up 0.1% to 101.9/102.2 (7.6%/7.5%) and Ukraine-21s adding 0.7% to close at 105.3/106.2 (7.1%/6.9%). The latest macroeconomic data from UkrStat showed a spike in the merchandise trade deficit in December, which finished FY12 at USD 15.8bn (+12% YoY). The government statistics agency also reported a decline in net FDI of 9.3% YoY to USD 4.1bn for FY12. The decrease in foreign investment in the country last year was a troubling sign, as the economy needs a steady inflow of foreign currency to offset the historically negative current account balance. The estimated net FDI-to-GDP ratio was 2.4% for 2012; our view of a healthy figure for this ratio is at least 4%. Corporate debt papers were once again mixed. Mriya-16s declined 0.7% to 102.2/103.0 (9.9%/9.7%) while Metinvest-18s increased by 0.3%, closing at 102.1/103.1 (8.2%//8.0%). PrivatBank-15s appreciate
