Photo from UNIAN
Ukrainian Finance Minister Natalie Jaresko may prove to be the savior of the nation’s bond market for a second year if speculation she’s on the verge of becoming prime minister turns out to be true, according to Bloomberg.
Ukraine’s debt will rally as much as four cents on the dollar if Jaresko takes over as prime minister, according to Mint Partners Ltd. and Landesbank Berlin Investment GmbH. The Chicago-born former investment banker became the darling of investors when she negotiated a $20 billion debt deal six months ago that spurred the biggest bond rally worldwide, Bloomberg reports.
“If Jaresko is made prime minister I think the bonds would rally to post-restructuring levels, or even overshoot that,” said Oksana Reinhardt, the head of emerging-market research at the Mint Partners brokerage in London, who told her clients last week to start buying the sovereign’s bonds. “There is optimism that if she comes to office, she will be able to root out corruption and finally get reforms through.”
Read alsoJaresko on IMF Memo: every week, something changes“Since Jaresko has been untainted by the political infighting threatening to stymie government policies needed to rebuild the country, the hope is that she will make headway in tackling graft and appease international donors whose aid is keeping the country afloat,” reads the report. “Speculation in the first week of March that she has been offered the top job wiped out 2016 losses in the nation’s Eurobonds.”
As UNIAN reported earlier, Natalie Jaresko, along with Rada Speaker Volodymyr Groysman, was named a possible successor of Ukraine’s current Prime Minister, Arseniy Yatsenyuk. Jaresko declined comment on the matter stressing that she does not comment on “rumors.”
Jaresko, the founder of a Kyiv-based private-equity firm, has built a rapport with investors since she took over as finance minister in December 2014, 10 months after the toppling of the country’s former president brought a pro-Europe coalition to power.
Within a year, she helped Ukraine avert default by negotiating a restructuring with private creditors including Franklin Templeton and push an unpopular budget through parliament.
“Ms. Jaresko has an excellent reputation locally and abroad,” said Lutz Roehmeyer, a director at Landesbank Berlin Investment GmbH, a holder of the nation’s debt who foresees a two-cent rally if the prime minister appointment happens. “Her appointment would bring more stability and sophisticated financial know-how to the government. That will be regarded favorably by the International Monetary Fund and foreign bond investors.”
Hype related to the potential appointment triggered a 6.2-cent jump last week in bonds due in September 2025, entirely wiping out February’s losses.
One demand of the IMF’s $17.5 billion rescue loan is for Ukraine to push through policies to stamp out corruption that ranks Ukraine among the bottom 40 worldwide in a Transparency International survey. Currently the fight against graft is being hampered by “vested interests,” Jerome Vacher, the IMF’s resident representative in Ukraine said on Thursday.