Sokrat investment group participated in the Investing in Corporate Ukraine conference, organized by Financial Times Global Events, on April 23, 2008. At the conference, Sokrat presented during a specialized seminar on mergers and acquisitions. Vladislav Ostapenko, the director of Sokrat’s investment and banking department, Michail Gibbons, the president of Global M&A (USA), Franz Weber, the managing partner of CD Invest Austria&South East Europe, Marc J. Lewis, ZAT Deloitte&Touche USC, Jean-Marc Metzger, the executive director of Financiere de Courcelles (France) and Natalya Polischuk, the director of Advent International (Ukraine), were among the attendees. Within this seminar, the participants addressed international experience in mergers and acquisitions, features of international deals and assessment of recent deals made in Ukraine.
Gibbons was a special, distinguished guest at this conference. Sokrat has been an exclusive partner of this organization in Ukraine since Feb. 2007 and has access to network members’ information resources 35 countries throughout the world. This type of partnership enables Sokrat to quickly provide its customers with information on their business, assessment of business on different markets and receive information from the partners of Global M&A on similar sales, deal values and their connections in the areas where they may be of interest to certain customers. This type of partnership also allows for access to updated information on investment opportunities available in each of the countries that participate in Global M&A.
Vladislav Ostapenko in his speech dedicated to the topic: “Ukraine is an attractive country in respect of acquisitions. The survey of the Ukrainian market for mergers and acquisitions” has marked the key trends and development scenarios in the most attractive sectors of the Ukrainian economy: banking, insurance, pharmaceuticals and retail. Thus, the banking sector of Ukraine features growing capitalization, high rates of asset growth, consolidation and a growing share of foreign capital in the mid-size banks segment. The prevailing development trends in the retail sector, which has demonstrated dynamic growth in the last few years, are increasing their formats to the levels of super and hypermarkets, cash&carry and rapid regional expansion. The pharmaceutical sector is looking forward to foreign companies coming to Ukrainian markets, which could accelerate domestic production modernization, as well as increase the market share for innovative products (both from domestic and foreign manufacturers). The insurance market features growing competition between Ukrainian and foreign insurance companies, active development of regional networks and growing activity in life insurance sector.
Also, within the section dedicated to IPO issues, Sokrat presented a report entitled, “IPO: Optimistic or pessimistic prognosis?”, which was delivered by Oleg Babur, the vice president of the Sokrat Investment and Banking Department. According to Babur, in general, notwithstanding the crisis condition, the valuation of Ukrainian public companies on global stock markets has shown the same indicators as in the period before the crisis and the valuation of some issuing companies has even grown. In 2007, the volume of Ukrainian issuing companies’ public offerings amounted to USD 1.2 bln compared to USD 130 mln in 2006. However, this is less than 1% of the GDP. For comparison, in Russia this ratio is 1.8% and in Kazakhstan it is 5.7%. According to Babur, the shortage in IPO offers (including those on developing markets) accumulates the residual demand and respective liquidity and may be proved economically advantageous for first offerings of issuing companies from Ukraine, even notwithstanding the unfavorable dynamics on the global markets.
“The discussions that took place during the course of the conference have reflected a growing interest on the part of international financial institutions in the Ukrainian market. It is necessary to note that not only Ukrainian investment banks express optimism in respect of the development prospects of Ukrainian economy. However, this attitude is also shared by global investment banks that participated in the conference. Undoubtedly, the global financial crisis will lead to a slowing down in the activities in the field of M&A and public offerings (IPO). At the same time, Ukrainian companies are undergoing the phase of dynamic development and becoming more known. The majority of investors are looking forward to strengthening activity in the capital market as soon as in the second half of this year and considering agriculture, pharmaceuticals and industries oriented to the end consumer as the most attractive industries for further investments,” Vladislav Ostapenko said.
Investing in Corporate Ukraine was organized by Financial Times Global Events. The conference featured more than 30 speakers, among them were representatives of the largest Ukrainian corporations, such as DTEK and SCM, major financial institutions, such as The Bank of New York Mellon, DLA Piper Ukraine LLC, Financière de Courcelles, OJSC Allseeds Group International, The Finance and Credit Bank, The World Bank, Moody's, The European Bank for Reconstruction and Development (EBRD) and key government officials, including Segey Moskvin, the deputy chairman of the board of the Ukrainian State Agency for Investments and Innovations, Anatoly Balyuk, the chairman of the State Commission for Securities and the Stock Market, Alexandr Potimkov, the deputy chairman of the board of the Ukrainian State Property Fund. The main topics addressed at the conference were the prospects of the development of the Ukrainian economy in 2008, the assessment of investment attractiveness of the Ukrainian market for investors, mergers and acquisitions from the point of view of the Ukrainian market, the experience and assessment of Ukrainian companies’ readiness for IPO and privatization processes in Ukraine.