REUTERS
The lion's share of investment from Russia is related to accounting operations, rather than real investment.
Financial analyst at ICU Group Mykhailo Demkiv says Russia was not in the lead in terms of foreign direct investment in Ukraine in the first half of 2018 (H1), as investment outflows and revaluation should also be taken into account.
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"The inflow of foreign direct investment [from Russia] is estimated at $436 million, while a decrease in investment and other operations (including the revaluation of capital) totals $409 million. So, net growth is less than $27 million in the first half of the year," Demkiv wrote on Facebook, adding that earlier conclusions about Russia's FDI leadership in H1 2018 are manipulative.
In addition, the lion's share of investment from Russia is related to accounting operations, rather than real investment. "[Russia's subsidiary] banks are affected by sanctions, so they cannot repay the debt to their parent banks in Russia, so they have to convert it into capital and hope for a buyer or the termination of a banking license," Demkiv added.
He recalled that in H1 2018, some UAH 8.3 billion was injected in additional capitalization of Russia's PJSC Sberbank operating in Ukraine, while UAH 2.2 billion was funneled into VTB Bank, which totaled $403 million, or 92% of total investment from Russia.
As UNIAN reported earlier, the volume of direct foreign investment in the Ukrainian economy (non-residents' equity capital) in the first half of the year increased by $1.039 billion. The greatest boost of investment was recorded coming from the Netherlands ($452 million), Cyprus ($257.8 million), and Germany ($48.9 million).