Yevhen Pentsak’s advice: Ukraine's economic scenario - hoping to live to see the election day?

Tags: Yevhen Pentsak, IMF, exchange rate, euro, dollar, investment portfolio

Information background of the week: Ukraine's rating downgraded one more level, counter-crisis reforms exhibited lowest efficiency ever, commercial banks are back in the position to let deposits be withdrawn ahead of maturity date, recapitalization of banking system's postponed for uncertain period, western markets are stagnating, Ukraine's eurobonds continue steady rise, National Bank is getting hryvnya into a tough game.

Wasn't there too many coincidences at the end of last week, yet? National bank removed the ban on hard currency purchases in payment for goods & services (prior to their necessarily having been imported into the country). NBU also lifted moratorium on cancelling deposit agreements before time, thus demonstrating hryvnya's tendency towards gaining strength.

By this NBU gives sure signs to the key currency players:

"there's no fear of speculative attacks against hryvnya and the exchange rate will be firmly supported at the desired level. The upper resistance line of $\3 can be hit. At will. Still, we need finances from abroad and for god's sake, EBRD, WB, IMf - all of you guys, come on support our plan! We do keep it handy and it shall be fulfilled. In case you are out of the game, we are not the ones to take consequences".

This kind of ideas, presumably run in the heads of state economists and NBU management.

Jokes aside, "they are not total morons out there", aren't they? It's an old anecdote I just recalled:

"Politburo are holding a closed meeting. American Moon mission back home alright, so Secretary General is making a motion: "We may be first who will launch a mission to the Sun!" A general: "Comrade Secretary General, the Sun radiates light, the temperature rises to 3000 degrees - such mission's impossible!". "Shut up, general. We're not total morons here. It's going to be a night mission!.."

They are probably figuring it out several moves in advance. Let us try and discern the intentions of our "adversary". 1,5 bln has been received from IMF to finance budget deficit. The money, therefore, should gradually be conveerted into hard currency, at a good rate. Dollar is falling. It can be finished off as well, in which case the government doesn't benefit from the whole idea of it. And new IMf-related problems will arise, instead. Some of the players in the market (general public, for instance) will happen to be stirred up and encouraged to get rid of the dollar, thus enabling NBU's buyout aimed at replenishing dollar reserves.

Importers will enter the play then along with pessimistic public at large to be follwed by stock jobbers fixing profits in dollar value. That will pick up dollar to nine hryvnas and exactly at that moment government will step into the game ... Selling dollar at highest possible rate. The exporters' market will seize to be soft and state-dependent. For a while, the rush will subside so as to rebound in view of the talks about the new IMF tranch.

In fact, the prospective Ukrainian senario seems to be laid out this way:

Luckily, we're out here in the green bleachers. Yet, we oughtn't overlook anything.

Our gold-currency portfolio should stay segmented as follows:

  • 20% - hryvnia;
  • 30% - dollar;
  • 30% - euro;
  • 20% - bar or paper gold (luckily, gold is on the rise and reached the level of $930 per once).

Ukraine's stock market is a tough issue but where else can you have so much fun solving economic puzzles!

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See also:

Мысли среди недели: индуктивные и дедуктивные методы исследования фондовых рынков

Очень часто мне приходится дискутировать о применимости тех или иных финансовых теорий к текущему анализу рынков, осуществление на его основе прогнозов и инвестиционных решений. Еще чаще мне приходилось наблюдать за спорами теоретиков и практиков на финансовом фундаменте. Меня всегда удивляло, почему они спорят? Ученые и исследователи используют общепринятые модели, описанные во всех классических учебниках, их знает каждый магистр по финансам. Почему выводы этих моделей не нравятся практикам?

Comments:

gost99 28/05/2009 23:07

Чи правильно я вас зрозумів-на початку виборчої компаніїї слід очікувати курса 9грн за дол?

pentsak@kmbs.com.ua 29/05/2009 13:36

Я звик робити прогнози на основі інтервальних показників. Я вважаю, що долар на початку вересня буде в коридорі 7,20-9,5 грн. за долар. Якщо на літні місяці з ймовірністю 70% долар перебуватиме в межах 7,20-8,3, то восени з ймовірністю 70% - у межах 8,2 - 9,5 грн. Відповідно до таких очікувань і формується золото-валютний портфель, змінюється співвідношення між гривнями, доларами, євро та золотом, щоб збалансувати ризики.

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