The prices of Ukraine's sovereign bonds have surged sharply as investors bet that the incoming administration of U.S. President Donald Trump will push for a swift end to the war with Russia.
This is reported by Financial Times.
The U.S. Presidential Elections: How Global Markets Reacted to Trump's VictoryHow markets responded to the reelection of Republican Donald Trump as President of the United States – in an infographic.In the past month, dollar-denominated bonds have risen by 12% amid expectations that Trump's reelection will lead to a ceasefire and enhance Ukraine's ability to repay its creditors.
This increase followed just two months after Ukraine completed the restructuring of over $20 billion in debt.
Bond investors are betting that the country will be prepared to accept a "peace agreement" that involves ceding some territory and that its economy will recover rapidly in the coming years.
Ukraine's bonds maturing in 2036 increased from 44 to 49 cents on the dollar over the past month. So-called GDP warrants saw an even sharper rise.
Ukrenergo bonds have surged more than 160% this year, reaching 67 cents on the dollar, despite renewed Russian attacks on infrastructure.
However, some investors caution that the outlook for Ukrainian bonds is far from certain. In particular, portfolio manager at Federated Hermes, Mohammed Elmi, expressed skepticism regarding the market's faith in Trump's ability to swiftly negotiate a peace agreement.
As a reminder, "Slovo i Delo" reported on how global markets reacted to Trump's return to the White House.