Ukrainian Exchange launches government bonds market

On August 10, 2010, 30 issues of the most liquid internal government loan bonds (government bonds) and one issue of VAT-bonds were added to the list of instruments trading on the quote-driven market of the Ukrainian Exchange.

In the government bonds market of the Ukrainian Exchange market participants can post indicative repo quotes in addition to the firm quotes.

The main advantages of the settlement technology implemented at the government bonds market are:

• reliable, simple and speedy execution of trades;
• no need to sign a hard copy of the securities sale and purchase agreement;
• bonds are to be deposited by the seller before the settlement day;
• opportunity to change the settlement day for an earlier date agreed by the parties to the trade.

In order to be admitted to trading on the government bonds market exchange members are to register at least one customer code or a proprietary trading code linked to an account in the depository NBU.

There will be no exchange commission charged on trades executed on the government bonds market until the end of 2010. The exchange commission rate that will become effective January 1, 2011 will be established by the Exchange Council this autumn.

"Troika Dialog welcomes the launch of government bonds trading at the Ukrainian Exchange, as it will allow local private investors to access this tool in the future via the Internet trading platform that is already up and running. In addition, we expect the start of trading in government bonds on the Ukrainian Exchange to facilitate a more transparent price discovery for government bonds at the secondary market and to improve their liquidity", - says Artemiy Ershov, Director of Troika Dialog Ukraine.

"Government bonds are the most reliable collateral for repo transactions, and we hope that this instrument will attract a substantial amount of cash to the securities market. At the first stage we admitted to trading only the most liquid bond issues, and in the future we plan to expand this list, depending on the needs of market participants, - comments Oleg Tkachenko, CEO, Ukrainian Exchange. - So far, the government securities market has been available to mainly big players. But we believe that further development of the settlement technology will make government bonds a convenient instrument for private investors as well".

Ukrainian Exchange is the leading stock market operator and the center of Internet Trading liquidity in Ukraine. It went live in March 2009 to immediately become the most advanced local exchange in terms of the trading technologies. It was the first exchange in Ukraine to offer an order-driven market, internet trading, a repo market, settlements via the CCP and a derivatives market.The Ukrainian Exchange provides market participants with a full range of services: trading in the stock, bonds and derivatives markets, IPO opportunities and participation in privatization auctions.

The UX Index has been calculated by the Ukrainian Exchange since the start of equity trading on March 26, 2009. Its initial value was set at 500 points. Currently the UX Index tracks 15 most liquid local securities.

The UX Index futures is the top liquid instrument of the Ukrainian market.

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