ALEXANDER VERBITSKY
PORTFOLIO MANAGER
UNIT LINKED UKRAINE
Score prediction: UKRAINE 1 – AUSTRIA 0
INVESTMENT INSIGHT:
Tonights opponents, Austria, are often touted as being at the centre of Europe, the “crossroads” of Europe, but I am here to tell you that, in the 21st Century that moniker may be taken further to the East!
Ukraine is a major transport and transit hub, connecting Western and Eastern part of Europe, the Baltic States and south-west Asia. Ukraine has a very convenient access to sea routes (both on land and on water), which, provide the circulation of traffic flows from Europe and the CIS to Turkey, the Middle East and North Africa.
Additionally, Ukrainian railways has around 22,000km of track, thus with some proper investment in infrastructure, Ukraine can be a logistics centre serving all points of the compass.
How can this be played by the investment community – one way is to focus on the production of new equipment required for building and running these infrastructure improvements – such as Svet Shakhtyora or Kryukovsky Railways, who will be able to match the demand for new machinery and rolling stock to service the increased volume.
Another way to play this is to look at the domestic agribusiness community who will find it easier to transport their products, not only across the country, but to seaports for export and local foreign markets, including European Union neighbours. The picks in this sector would be Kernel and Ukrprodukts, and indeed our old friend MHP Agribusiness.
ALBERT REITER
CHIEF EXECUTIVE
INVESTRFP.COM and INVESTESG.EU
Score prediction: UKRAINE 1 – AUSTRIA 2
INVESTMENT INSIGHT:
The Austrian stock market is old but rather small compared to other countries. What makes the domestic market interesting for asset managers is the open architecture of many fund selectors, private banks and insurance companies.
Net assets of private households grew from €362bn in 2010 to €560bn in 2020. A huge portion of around €250bn is sitting in low or non-yielding savings accounts and losing money in real terms. The domestic fund market is actually smaller than that amounting €210bn.
Asset managers with clever solutions for a low yielding market environment could gain big points by teaming up with local asset managers and/or distribution channels.
Time is changing but it is a slow process. Coming back to the topic of sustainability again we can see very promising trends for sustainability investments of institutional and private investors.
With more focus on a circular and sustainable economy it makes more sense to raise money in the local market and invest in a diversified portfolio of domestic or regional projects instead of sending money to far away investment destinations. I am positive for the future and it can be expected that Austrians will invest part of their savings money in smart sustainable regional and local investment products or impact projects in the future.
