Fixed Income
Ukrainian sovereigns sold off last week, with long-term benchmark Ukraine-23s retreating by 1.0% to a near record-high yield of 82.8/84.1 (10.6%/10.4%). With military news flow from the Donbass finally subsiding, bond market players turned their attention to the disappointing absence of serious economic reforms under the post-Yanukovich, pro-European Kyiv government. Amid the economic crisis, we have seen the government returning to populist rhetoric and micromanagement techniques for operating state finances, and the criteria set out by President Poroshenko in his “Strategy 2020” unveiled last Thursday (Sept 25) look exceedingly difficult to achieve. On the gas front, the EU-brokered talks between Ukraine and Russia held on Friday (Sept 26) appeared to yield a breakthrough in the evening, only see Kyiv disavow the deal over the weekend. Russia’s Gazprom is demanding repayment of a USD 2.0bn debt for deliveries to Naftogaz as precondition for further gas price discussions, Interfax rep
