How might the elections in the USA impact the market for government and corporate bonds in Ukraine? Do you anticipate changes in foreign investors' interest in Ukrainian securities?
The market for government bonds in Ukraine is shaped by two primary factors: the Ministry of Finance's need to raise funds for budget financing and investor demand. Thus, when assessing the impact of external factors on the government bond market, it largely revolves around the prospects for financial support for Ukraine from partner countries.
The G7 nations (including the USA) and the EU have already agreed to allocate $50 billion to Ukraine from 2024 to 2027, of which $20 billion is expected specifically from the USA.
Whether the official stance of the USA regarding the timing of this aid will change can only be determined after the new US president takes office next year. Meanwhile, other partner countries have publicly confirmed their readiness to increase funding if necessary. This suggests, in our opinion, that support for Ukraine will remain at a sufficient level.
Moreover, the sharp rise in quotes for Ukrainian Eurobonds following the announcement of the preliminary results of the US elections indicates positive expectations among investors regarding Ukraine's future.
Considering the growing global interest in alternative assets like gold, does it make sense for Ukraine to increase its share in this asset as part of its reserves?
Gold has been a tool for preserving wealth for millennia. The rapid increase in gold prices over the past year demonstrates that interest in it remains strong.
We believe that the rise in gold prices is driven by the following factors:
- the beginning of a cycle of interest rate cuts in major economies around the world;
- the active accumulation of gold purchases by central banks;
- anticipated slowdown in economic growth rates in developed countries;
- a resurgence of interest in funds that invest in gold.
As for investment decisions, they should be made considering the individual circumstances and risk tolerance levels of each investor. Generic investment advice without analyzing the specific situation can be detrimental.