Anna Konstantinova
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Concorde Capital announces the results of its latest survey of the corporate governance practices of Ukrainian publicly traded companies

Kyiv, May 29, 2013 – The research team at investment bank Concorde Capital presented the results of its fourth survey of corporate governance standards and practices among Ukrainian publicly traded companies, “Corporate Governance in Ukraine – May 2013.”The goal of the research was to present stock markets players with instruments that can help them better understand corporate governance practices among Ukrainian companies in reaching well-grounded investment decisions.

The project involved 111 companies operating on Ukraine’s territory, issuers of equity or debt traded on the Ukrainian and international stock exchanges. Debt issuers were included for the first time in the examination of corporate governance standards and demonstrated higher results than equity issuers in many categories.The focus of the new research, colorfully titled “Not Gone with the Wind,” became companies that maintain high-quality corporate governance standards. Out of 188 companies covered by all of Concorde Capital’s previous surveys, only six issuers extended high-quality corporate governance standards into the latest 2013 survey: Astarta, JKX Oil & Gas, Galnaftogaz, Ferrexpo, MHP and Milkiland.

The corporate governance leaders for the year 2013 were Astarta, Kernel, MHP, Megabank, and Ukrprodukt, as well as survey debutantes and bond issuers DTEK, Metinvest and First Ukrainian International Bank.“The time has passed when investment analysts were the single intermediaries between investors and Ukrainian equity issuers quoted on the stock markets,” said Alexander Paraschiy, the head of the research department at Concorde Capital. “Now investors pay more attention to protecting their investments in Ukrainian assets and the demand for high-quality corporate governance and access to information has significantly increased as compared to the time of our first research, conducted in 2007 and 2008.”The main conclusions of the 2013 survey:The number of companies demonstrating high corporate governance standards is increasing with time. As a rule, the majority of “quality” issuers are debutantes to our survey and rookies to the capital markets. But not all debutantes have preserved high corporate governance standards throughout the years.High corporate governance standards are more often demonstrated in companies in which the owners don’t have alternatives in attracting external financing.Ukrainian owners reluctantly allow independent directors into the controlling divisions of companies.The stock market has become much more sensitive to corporate governance standards.

The quality of corporate governance appears to be an important argument for credit rating agencies and an important prerequisite for making debt financing less expensive.

Although high-quality corporate governance is a necessary condition for successfully attracting financing on capital markets, it’s not enough in and of itself.The 2013 survey renews research on the state of corporate governance in Ukraine, conducted by Concorde Capital’s analysts starting in 2007.Among the partners in the research were the Ukrainian Exchange and the Kapital daily business newspaper.A full version of the survey can be downloaded at: http://concorde.ua/en/research/corp-governance/