President of ALFA CAPITAL (UKRAINE)
The years of
independence have been marked by Ukraine with
New opportunities for investors in various sectors of
Ukraine’s national economy have been opened.
The process of privatization attracts a growing number of
investments not only from domestic but also from foreign
investors. Any kind of financial activity in such a
rapidly changing environment is a risky and challenging
business and demands a lot from those who are involved in
One should have enough experience, be well informed,
understand the situation well and be capable of assessing
investment possibilities and risks.
CAPITAL (UKRAINE) does have all these qualities.
It entered the Ukrainian market 30 months ago and has
become since then the leading investment house in
Ukraine. It is one of the participants of the Ukrainian
Association of Investment Business. ALFA CAPITAL
(UKRAINE) also participates actively in the work of the
Council and the committees
of the Electronic Securities Trading System Association
which is the major entity of its kind in Ukraine.
No wonder that ALFA CAPITAL’s experts
have gained considerable experience and have made
important contributions to the development of the
Ukrainian securities market. At the same time they have
achieved a high reputation in their sphere of activity.
Mr. Johann Jonach, President of ALFA CAPITAL
(UKRAINE) spoke to Welcome-to-Ukraine correspondent
Andriy Shestakov about his company’s work, achievements
were you planning to achieve when you entered Ukraine’s
Jonach: We began functioning in
1995 when, for all practical purposes, there was no such
thing in Ukraine as a securities market. And now we are
not only one of the «veterans» of this market but also
the biggest brokerage in Ukraine. From the very start we
were striving to be a link between the interests of
Ukrainian companies on the one hand and investors,
particularly foreign ones who are looking for attractive
investment targets, on the other.
I believe that we have achieved this goal which is being
confirmed by our success in working mainly with portfolio
investors during 1997 which made Alfa Capital (Ukraine)
the biggest player in the market. Then the sector which
attracted most interest was energy production and
distribution. It was also the area where privatization of
the biggest Ukrainian companies started. Today’s
situation in the securities market is much more complex.
It has been affected by the crisis which started in
South-East Asia last fall and continues to depress equity
prices in Ukraine. Especially in these circumstances
investments in high quality companies and adequate advice
as available from us is of major importance. At the same
time Ukrainian share prices are now probably among the
cheapest in the world which offers lots of opportunities
for the astute investor.
which way has this situation affected your company?
Jonach: Given the decline in
interest among portfolio investors for equity investments
into Ukraine we were forced to come up with other
investment possibilities. Currently investments into
Ukrainian treasury bills and private equity investments
are on top of the agenda. We noticed this change of
attitude early enough in order to develop the necessary
infrastructure within our company and again managed to
achieve a leading position in these areas. We work with
quite a few strategic investors who want to invest into
projects in Ukraine in order to get a position in this
big and quickly developing market.
At the same time it has to be said that Ukraine will be
able to use its enormous potential only if it manages to
speed up economic reforms, increase privatization and
work out a more stable legal basis. A lot will depend on
the work of the authorities and the new Parliament.
Principal interest among strategic investors is very high
but concrete results are much more difficult to achieve
than in the sphere of portfolio investment. We hope that
our investment banking and corporate finance activities
will contribute to a size-able increase in direct
investment into Ukraine.
Which branches of Ukraine’s economy are foreign
investors interested in most, and what is your
contribution to getting them interested?
Jonach: The biggest interest
from portfolio investors is in the energy sector and in
the metallurgical and chemical industries. Strategic
investors so far are mainly interested in food
processing, media, services and in machine-building. Alfa
Capital has built up extensive research capabilities and
takes an active part in promoting Ukraine as an
interesting country for investment worldwide via
conferences, seminars and many direct contacts.
Would you say a few words about your confidence in
success and which factors of your activities you consider
to be the most important?
Jonach: The main factor
for success in our business is reliability and
professionalism. The best way to show that is to build up
a corresponding track record. I believe that we were able
to do just that since the start of our activities and
this helps us today. We see this in the increasing number
of our clients, most of whom are referred to us by
Another important factor are our employees. Our staff are
mainly Ukrainians who were trained by us and are working
according to international standards which they managed
to achieve very quickly. Ukraine’s intellectual
potential is extraordinarily high which, by the way, can
also be seen in the high-tech industries. This is one of
the reasons why we are currently working on creating a
Technology Fund. Finally, I would also mention openness
and transparency as a major guideline in our work. This
is something where Ukrainian capital markets still have
to improve considerably to be successful in the longer
Could you, please, say a few words about your cooperation
with the EBRD?
Jonach: We have good
contacts with the Kyiv representative office of the EBRD
and with its headquarters in London. At the moment we are
working on some concrete projects, one of those is the
Technology Fund mentioned already. We value the
experience of the EBRD in the transition economies of
Central and Eastern Europe highly and see many parallels
in our work. Generally, we are interested in good
contacts not only with institutions like the EBRD but
with all major players in the Ukrainian market. We
consider wide contacts and good business practices as our
CAPITAL (UKRAINE) has sponsored many cultural projects in
Ukraine. By being a patron of the arts it contributes to
the promotion of art in Ukraine and art has always been
one of the things we take pride in. Using this occasion
we would like to join our artists in expressing gratitude
for your patronage of art. But what is it exactly that
motivates your sponsorship?
Jonach: Our life does not
only consist of money but also of feelings, emotions of
the heart, culture. Striving for all of these things has
always been important and especially now, at a time when
Ukraine is going through considerable hardship, we
believe that it is our duty to give encouragement and
financial support to art in Ukraine and we intend to
continue along those lines also in the future.
Welcome to Ukraine Magazine, one of whose main aims is to
acquaint the world with the artistic and other
achievements of Ukraine, wishes your company success in
its fruitful work in Ukraine and will be always glad to
meet you again on its pages.