A union of Ukrainian companies listed abroad is seeking to revamp the nation’s tattered image and improve the level of investor relations.
This, the companies hope, will help create a communication-friendly culture in Ukraine and instill long-term thinking among the nation’s firms.
Some of Ukraine’s top Warsaw-listed companies have joined together to set up the Ukrainian Issuer’s Club. Created as a result of a cooperation agreement signed in February this year by the Polish-Ukrainian Chamber of Commerce and the Warsaw Stock Exchange, the organization will seek to improve the quality of investor relations and burnish the country’s image among Polish investors.
The club, which held its inaugural meeting on Aug. 21 in Kyiv, comprises publicly traded Ukrainian companies Astarta, IMC, KDM Shipping, KSG Agro and Milkiland, all listed on the WSE’s main trading floor, as well as Agroliga from the alternative market NewConnect.
The image of Ukrainian companies has been bruised in recent months. Failures to meet unrealistic targets and late filings tested investors’ nerves. These were further rattled by a qualified auditor’s report for agribusiness company Agroton, who could not account for $66 million in revenue.
Polish business daily Parkiet blamed irresponsible management and poor communications for the negative sentiment towards Ukrainian companies, whose index on the Warsaw market dropped 20 percent in May.
“Investors have become disillusioned by the behavior of Ukrainian companies, and will be wary of any new offers from the region,” the newspaper wrote, adding that problems with individual companies were spilling over onto investor perceptions of the region as a whole.
That is precisely what the new club’s founders want to avoid.
“The point is to give an example [to companies with poor communication track records],” said Beata Jarosz, board member of the WSE. While the club is mainly focused on post-IPO companies, she said potential candidates will also have a chance to cooperate, so as to learn the best practices for their more experienced peers.
So far, the situation has been far from perfect.
“To say that investor relations work in Ukraine is being carried properly would be incorrect. Of course there are companies that do this properly, but there are also ones that don’t and their actions impact everybody,” said investment holding ProCapital Group head Dmytro Oliynyk.
The idea of common responsibility was also confirmed by Sergey Kasyanov, chairman of the board of KSG Agro, who praised the project.
“We all want the companies listed on the exchange to be successful. Because any failure of any company immediately impacts the others. We are all in the same boat. And so this is a very good initiative, in which we will be happy to participate very actively,” he said.
Oleg Dubish, deputy head of the Polish-Ukrainian Chamber of Commerce, added that the group would seek to influence the actions of underperformers in communications, so as to raise the general level among Ukrainian issuers.
While this is the number one priority, the club could also later engage in lobbying activities and push for pro-business reforms, Dubish noted.
Ukrainians citizens trying to invest abroad run into a number of hurdles, like the requirement of individual permits to open foreign bank accounts. Institutional investors are also limited by legislation, notably the lack of pension reform.
Kyiv Post staff writer Jakub Parusinski can be reached at [email protected].
