News (#6 June 2018)

Biznews

Space industry

Antares rocket launched

On 21 May Orbital ATK successfully launched the Antares rocket, which was created with involvement of Ukrainian professionals from Wallops, Virginia, USA.

The satellite will deliver more than 3.3 tons of useful cargo to the International Space Station, including research equipment and materials, as well as rations for the crew and other equipment.

The main structure of the first stage launcher was developed by the Yuzhnoye Design Office and manufactured at Production Association Yuzhnoye Machine-Building Plant named after A.M. Makarov (Dnipro) in cooperation with Ukrainian enterprises Hartron-ARKOS (Kharkiv), Hartron-UCOM (Zaporizhzhya), RAPID (Chernihiv) and others.

Ukrainian professionals took an active part in Antares test launches, which were conducted in the USA.

 

On-line services

Google cooperates with Kiev City State Administration

Google Ukraine and Kiev City State Administration have launched several online services dedicated to Kiev and the region.

These include the Kiev Region tourist site, Kiev current events guide Kiev Maps, as well as 3D tours around inaccessible locations of the capital.

Kyiv Maps is a platform where interesting events are placed by categories: business, art, sports, etc. Here one can search for events by city district, date and preferences (outdoor activities, romance, fair, festival).

There is a separate section about sport called Sport.Kyiv Maps on the platform, where the base of the city’s sporting locations is collated.

Moreover, Google Ukraine and Kiev City State Administration have also launched the Discover Kiev Region site, which contains information on places to visit in the capital and the region.

 

Trade Policy

China proposed set of measures to USA to cut trade deficit

China has a set of measures to US President Donald Trump that would reduce the current deficit in bilateral trade by USD 200 billion a year.

One of the main beneficiaries of this set of measures may be the American company Boeing, which currently sells about a quarter of its aircrafts to Chinese customers.

According to other sources, the package may include removal of already effective Chinese duties to the value of about USD 4 billion imposed against American agricultural products, including fruits, nuts, pork, wine and sorghum.

A reminder that the USA has prepared new duties against goods from China in response to Beijing’s protectionist policy.

In its turn, China has prepared a list of response measures that will affect about 40% of US imports. In particular, duties against food products, cars and aircrafts may be raised.

 

EuroChem leaves Ukraine

EuroChem Group AG has announced the sale of its subsidiary in Ukraine. The transaction value and its terms are not being disclosed.

The company stressed that this decision was due to recent actions taken by the Ukrainian authorities limiting the supply of fertilizers by foreign companies, as well as by the expected further worsening of the business climate in this market.

The subsidiary was sold to a company related to its former management, and means that EuroChem is leaving Ukraine after 15 years of operations on this market.

A reminder that on 26 March the Interdepartmental Commission on International Trade expanded anti-dumping measures on the import of ammonium nitrate of Russian origin coming into Ukraine.

 

Transportation

Beskyd railway tunnel unveiled

The Beskyd Tunnel, a crucial part of railway connection between the Ukraine and the EU, has been put into operation.  The construction of the new 1.8 km-long tunnel has been supported by an European Investment Bank (EIB)loan of EUR 55 million. The tunnel is located in the Carpathian Mountains near Beskyd in south-west Ukraine. It replaces the former single-track tunnel, which was the only single-track section of the line on the otherwise twin-track electrified corridor between Lviv and the Hungarian and Slovak borders.

After the inauguration of the new Beskyd Tunnel, there is great potential for doubling domestic and international freight train operations to 24 million tonnes and 56 trains in both directions over the next ten years. Passenger transport will be able to reach up to 40 trains per day in both directions during this period.  This project is a good example of cooperation between the EIB and the European Bank for Reconstruction and Development (EBRD), which have co-financed this ambitious railway tunnel construction project together with Ukraine.

The project appraisal conducted in accordance with standards applied by the EIB received technical assistance grant support from the Eastern Partnership Technical Assistance Trust Fund (EPTATF).

 

Oil & Gas

Naftogaz hikes price of gas

From 1 June 2018 NJSC Naftogaz of Ukraine will raise the price of gas sold to industrial consumers on an advance-payment basis by 8.9% as compared to the price in April.

The price will rise by UAH 810 to UAH 9,952.8 per 1,000 cubic meters (including VAT).

It is noted that this price is effective for consumers buying gas on an advance-payment basis and in volume of more than 50,000 cubic meters per month, provided that there are no debts owing to the company and to 100% NJSC subsidiaries.

For other customers, the price will rise by 8.5% (UAH 852) from
1 June, up to UAH 10,893.6 per 1,000 cubic meters, (including VAT).

 

Banking & Finance

What should the banks do to take the path of innovation?

EY Global banking outlook 2018 finds all market participants seek to keep pace with advancing modern technology, focusing on innovation. The survey based on comments from representatives of 221 financial institutions across 29 global markets revealed the following priorities for the banks for 2018:

1. Enhancement of cybersecurity systems

2. Implementation of digital transformation programs

3. Acquisition, development and retention of talents

4. Increasing efficiencies through innovations

5. Investing in technology to improve the overall client experience.

Ten years after the global financial crisis the banking industry has successfully recovered. EY’s survey reveals that most bankers are positive about their ability to improve their financial performance in 2018 and beyond. However, conditions favorable for growth are unlikely to remain permanent. The banks need to consider the challenges of the digital age and direct their efforts to achieve more sustainable growth in a rapidly changing economic and technological environment. Investment in technologies to drive greater efficiency while managing evolving risks and benefit from the growth opportunities that will be critical for sustainable success over the long-term business cycle.

The survey found that the vast majority of respondents expect revenues and profitability to improve over the next 1 to 3 years, in spite of rising costs.

Bankers’ expectations for growth are clearly supported in EY’s annual review of the strategies of the top 30 major banks in the world. Managing risks and protecting against internal and external threats was the most highlighted priority, however a greater emphasis is on improving the financial performance through growth and optimization.

 

How do the banks plan to increase their revenues and achieve growth?

The banks are striving to improve operational efficiency while maintaining or improving the quality of customer services. To reduce the impact of a possible downturn on financial performance and business continuity, the banks must complete the transition from a regulatory-driven transformation to an innovation-led change. Banks will need to make meaningful investments in processes and infrastructure aimed at driving real efficiencies across the entire organization.

Banks’ investments in customer technology have largely been focused on front-end interfaces. Also, banks continue to invest in data analysis projects to improve efficiency and find new ways to increase revenues. Almost 80% of the banks surveyed invested in data analytics and plan to increase the volume of such investments over the next three years.

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