As a whole, the banking sector across the CEE region remains profitable. Interest margins have tightened recently, but are still much higher than in Western Europe. Lending growth has softened and banks have increasingly focused on attracting fundings from domestic sources, increasing competition for deposits. Western European banks, which hold more than two thirds of the CEE banking sector’s assets, have withdrawn significant amounts of parent funding, pressured by heightened capital requirements in their home countries, but are believed to remain committed to the region, which has a strong growth potential. The main weakness of the CEE banking sector is the high level of bad loans and the trend for further worsening of the asset quality in view of the weak economic environment.
Much more in the Intellinews report: CEE Banking Sector Report
Tags: Bank for Reconstruction and Development (EBRD), Bank of Lithuania, banking, banks, Bulgaria, CEE, clients, credit institutions, Croatia, Czech Republik, deposits, domestic deposit, domestic loan, Estonia, European Investment Bank, foreign corporations, GDP, Germany, Goldman Sachs, Hungary, Latvia, lending, Lithuania, macroeconomy, MFI loans, National Bank of Poland (NBP), nn-performing loans, NPL ratio, Poland, Romania, Slovakia, Ukraine, UniCredit Bulbank
The European Bank for Reconstruction and Development (EBRD) passed a negative economic growth outlook for kraine for both 2012 and 2013 citing faster decline in industrial production in the last two quarter of 2012. In its latest Regional Economic Prospects Report published in January, the EBRD said it expects Ukraine’s economy to post a zero growth in 2012 and expand by 1% in 2013, cutting its forecasts from earlier expected growth of 1% and 2.5%, respectively. Ukraine’s industrial production in 2012 contracted by 1.8% from 2011 with the annual fall in December deepening to 7.6% from 3.7% in November, according to data from the State Statistics Service. Agricultural production is no exception, declining by 4.5% y/y in 2012 versus a 19.9% growth in 2011. Crop production last year fell by an annual 8.2%, with commercial farms’ production going down by 10.9% and that of private farms decreasing by 4.6%, – animal goods’ production, on the other hand increased by 3.8%. Specifically, output of commercial farms was higher by 7.6% and of private farms by 1.2%. According to
preliminary data, the strongest annual output growth was registered in Khmelnytsky (+12.9%), Ternopil (+9.8%) and Kyiv (+9%) regions, while the steepest decline was reported in the regions of Dnipropetrovsk (-20.3%),
Zaporizhzhia (-19.2%) and Odesa (-19.1%).
Much more in the Intellinews report: Ukraine Food Sector Report
Tags: agriculture, alcohol, Alcohol Traditions, Avangard, bakery, beer, beverages, Biscuit-Chocolate, bread, caramel, cheese, Chumak, dairy, EBRD, EconMin, export, fish, flavoring, food, fruits, Global Spirits, Globino, government, grain, import, investment, Konti, Kremenchukmiaso, Kyiv, loss, meat, milk, Milkiland, Nestle, Panda, production, profit, Roshen, Stable, sugar, Svarog West Group, Ukraine, Ukrmolprom, vegetables, Vodka, wheat, wine, Zhytomyrski Lasoschi
Ukraine seems interested in developing own shale gas resources as a diversification from predominant Russian imports, but the business climate in the country looks problematic. The state is very interested in energy projects; however investors are cautious of moving into Ukraine’s energy business at the moment, as this often meant joining up or competing with state-based organizations, or groups that could be linked to state officials or their relatives.
Ukraine has significant shale oil gas reserves, according to the existing estimates, equal to those of Sweden and roughly one quarter of the reserves of the major reserve holders Poland and France. OECD/IEA indicates roughly 1,100bn m3 of gas reserves. Wood Mackenzie however indicates that the Lublin basin, in Poland, could have reserves in excess of 1,400bn m3 and have equal reserves in the Ukrainian portion of the basin.
Main shale gas basins in Ukraine [Source: Advanced Resources International, IntelliNews]
With Europe’s fourth largest shale gas reserves according to the OECD/IEA, and hopes for even more as supported by prognoses like those put forth Wood Mackenzie and others, the production stakes in Ukraine have aroused international interest. Exploration on the Ukrainian side of the border so far has been narrow however. This is largely the purview of internationals. TNK-BP, Gazprom and Shell are looking at Ukrainian exploration. There are also several junior explorers, such as Eurogas, actively exploring in Ukraine.
This is only a small extract of the insights in the IntelliNews Special Report, Ukraine Shale Gas Sector; read more and purchase>>
Tags: Balchem, Cadogan, Chevron, cost, development, East Europe, economy, Eni, export, Exxon Mobil, frackling technology, Gasfrac Energy Services, Gazprom, government, hydraulic, import, investors, KUB-Gas, Natural Gas, OMV, OMV Petrom, politics, price, production, profits, risk, Russia, shale gas, Shell, size, Svenska Capital, technologies, TNK-BP, TPAO, Trican Well, Ukraine
Poland is in the front line of Europe’s shale gas operations. According to the Environment Ministry’s data, 18 research drillings were successfully conducted and 14 another were under preparation. Still these drills are not enough to reasonably assess the actual potential for commercial use of shale gas. Even if the existence of gas is confirmed, it does not necessarily mean that there is potential for commercial use. From the tests made so far, the only concession, which may hold a satisfying amount of gas is PGNiG’s Wejherowo concession in Lubocin.
Apart from uncertain resources, experts mention several other potential barriers, which may increase the risk for shale gas investors in Poland and may even make such investments unreasonable:
- Protectionism of local service sector especially regarding drilling firms
- Restrictions to foreign drilling firms to enter the Polish market (for example a requirement to operators of drilling equipment to have local permissions)
- Long lasting procedures for importing the drilling equipment from outside the EU
- The necessity to announce tenders for drilling operations;
- Uncertainty concerning the price of gas on the regulated market;
- Complicated regulation concerning access to geological information and high price of such information;
- Changing and unclear regulation regarding the environment protection.
This is only a short extract from all the insights provided in the IntelliNews Special Report, Poland Shale Gas Sector; read more and purchase>>
Tags: 3 Legs resources, Balchem, Bulgaria, Chevron, cost, development, East Europe, economy, Eni, export, Exxon Mobil, frackling technology, Gasfrac Energy Services, Gazprom, government, hydraulic, import, investors, KGHM, Lotos, Marathon Oil corporation, Natural Gas, OMV, OMV Petrom, Petrolinvest, PGNiG, PKN Orlen, Poland, politics, price, production, profits, risk, Romania, San Leon Energy, shale gas, Shell, size, technologies, TNK-BP, TPAO, Trican Well, Turkey, Ukraine
In the US, 12 years after the start of significant operation, shale gas flows reached some 170bn m3. The real impact was visible in the second half of the cycle, when supplementary non-conventional gas pushed exports and consumption up and imports down.
Will this be the case in Europe? Our findings point to the fact that even if certain areas of the continent (Eastern Europe particularly) are strongly interested in grasping this opportunity, a would-be shale boom in Europe reach neither the magnitude nor the speed of development seen in the US.
Europe will rather seek to diversify its external gas resources by building LNG terminals or investing in pipeline to gas rich regions. Actually, the shale gas at global level will not reach the magnitude seen in the US recently, as suggested by the consensus projections.
More detail, including extensive analysis of markets, technologies, political landscape and specific businesses, in the IntelliNews special report, East Europe Shale Gas Sector; read more and purchase>>
Tags: Balchem, Bulgaria, Chevron, cost, development, East Europe, economy, Eni, export, Exxon Mobil, frackling technology, Gasfrac Energy Services, Gazprom, government, hydraulic, import, investors, Natural Gas, OMV, OMV Petrom, Poland, politics, price, production, profits, risk, Romania, shale gas, Shell, size, technologies, TNK-BP, TPAO, Trican Well, Turkey, Ukraine
Ukraine claims its position as one of the leading agricultural countries in the world.
The country possesses 30% of the world’s black earth– the most favorable soil for agriculture.
In 2011, the agricultural production increased by 17.5% year over year, reported the State Statistics Service. The highest growth was seen in the north eastern Ukraine (Kharkiv, Poltava, and Symy regions). Interestingly, both agricultural firms and households experienced production growth of 23.8% and 12.3%, respectively.
The sector is making more money. In 2011 State Statistics Service data show agricultural profits rose by 52.3% year over year, to UAH 19.8bn (USD 2.5bn). Not only that, it seems more farmers are getting better at becoming profitable. Income 79% of enterprises engaged in agricultural production and services we profitable.
The EBRD believes Ukraine has great potential in agriculture, and should be attracting investors Indeed, they are unafraid to put their money where their mouth is. Others are less intrepid. Frequent changes in legislation tend to impede investment.
These are only a few of the insights found in the June 2012 number of the IntelliNews Ukraine Food SectorReport,.. Read more and purchase>>
Tags: Agroton Public Ltd (A2TA), Astarta Holding N.V. (AST), Avangard, AVK, Bel Shostka Ukrainy, Bershadmoloko, EBRD, Globino, Industrial'na molochna kompaniia ZAT (IMC), Kernel Holding SA (KER), Kontsern Khlibprom VAT (HLPR0, Kreatyv Hrup VAT, Kremenchuk, Kremenchukmiaso, Lityn Dairy, MHP, Milkiland, Myronivsky Hliboproduct (MHP) S.A. (MHPC, Obolon, Odessa Cognac, Regina, San Inbev Ukraina VAT (SUNI0, Slavutych Brewery (SLAV0., Svitoch, Ternopil Dairy, Ukraine, Ukraine Agriculture Research, Ukrspyrt, Vodka
Hydraulic fracturing (fracking) offers an opportunity to extract an abundant and cheap resource, in shale gas. Countries with potential shale gas resources (particularly in Central Eastern Europe) long for alternatives to their dependence on oil-rich countries, and in many cases fracking has the potential to turn energy net-importers into energy net-exporters.
Get your critical questions for risk and investment management answered:
Will environmental issues make or break the opportunity?
In three countries, environmental concerns threaten to shut down fracking before energy concerns can turn a profit. Find out which investments are at risk.
Russian gas to lose its stranglehold?
New sources for natural gas could completely transform the figure below, showing imports from Russia compared with other sources.
The colours could be completely reversed within a relatively short time-frame and cause dramatic alterations in the economic landscape.
More thunder than lightning?
There’s great excitement and buzz around the potential of hydraulic extraction of natural gas. How much is warranted and how much hyperbole?
Our analyst breaks through the dramatics to provide solid analysis to help you manage your risk.
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Tags: Bulgaria, fracking, natural gas extraction, Poland, Romania, Russia, Turkey, Ukraine