Getting Ukranian exposure
The Russo-Ukrainian (a.k.a. Putin’s War) is easily the biggest geopolitical event that has happened in my life. Not only due to the fact it’s a war in a large European country, but also due to the ramifications on international trade as well as relations between nations. Being a speculator, I’m naturally interested in learning more about Ukraine’s footprint on the capital markets, and especially how to get/avoid Ukrainian exposure.
Ukraine have 2 stock and derivatives exchanges: PFTS and Ukrainian Exchange, both of which is quite small and have few domestic listings. Looking at their members, it’s clear that getting access is difficult, as most members is local banks and insurance companies. This makes the shares out of reach of almost anyone outside of Ukraine. Your bank would have to make an OTC trade with a Ukrainian counterpart, which need to buy them in an illiquid market = high fees, spread and slow execution -everything you don’t want in a trade like this!
Ukraine is a commodity economy with agriculture at its heart, so the conflict will inevitably influence the commodities they export in large quantities. Therefore commodity futures and options might be of interest.
Take a look at CME’s list of Grain and Oilseed futures, I especially find the Black Sea Wheat (BWF or BWO) products as well as the Black Sea Sunflower Oil (BSF) interesting.
Most people know ADRs (American Depositary Receipt), GDRs are the more broad description (Global Depository Receipt), this gives almost anyone doing self investing access to some Ukrainian companies with GDRs trading on LSE (London Stock Exchange), FRA (Frankfurt Stock Exchange) and WSE (Warsaw Stock Exchange).
|Ukrproduct Group||UKR||GB00B03HK741||LSE||ukrproduct.com||Dairy products|
|Ferrexpo||FXPO||GB00B1XH2C03||LSE, FRA||ferrexpo.com||Iron Ore Mining|
|MHP||MHPC||US55302T2042||LSE, FRA||mhp.com.ua||Poultry farming|
|AvangardCo Investments||AVGR||US05349V2097||LSE||avangardco.ua||Poultry farming|
|Cadogan Petroleum||CPD||GB00B12WC938||LSE, FRA||cadoganpetroleum.com||Oil & gas|
|Enwell Energy||ENW||GB0031775819||LSE, FRA||enwell-energy.com||Natural gas|
|Arricano Real Estate||ARO||CY0102941610||LSE||arricano.com||Retail Real Estate|
|Agroton||AGT||CY0101062111||WSE||agroton.com.ua||Fishing & Farming|
|Kernel Holding||KER||LU0327357389||WSE||kernel.ua||Vegetable Fat & Oil|
It goes without saying: You need to have appetite for risk, Ukranian companies poses a quite unique risk profile (at the moment), which allows for interesting discretionary trading if you are on-top of the news flow and understand war strategy.