Today's Contents
Reporter's Notepad:
- 99 stock-buying ideas ahead of the historic $1 trillion reconstruction of Ukraine
Just The Facts:
- US entitled to revenue Ukraine gets from some resources under proposed economic partnership deal, Treasury Secretary says
- European officials expect Trump to insist they pay for Ukraine's reconstruction, FT reports
- Ukraine kicks off bilateral screening on financial services chapter under EU accession process
- Boryspil, Ukraine's largest airport, holds talks with Wizz Air on relaunch of flights
- How UkraineInvest managed to defy FDI logic by attracting investors to the war-torn country: Investment Monitor
Here's What They Think:
- Internationale Politik Quarterly: Europeans must find a way to influence Trump's peace deal for Ukraine
- Politico: Ukraine peace talks will be a lengthy, complex process
Sober Second Thought:
- Ukraine's economy ministry must help boost investment into science sector: CEPR policy insight
Dear subscribers,
What stocks to consider buying to get ahead of the reconstruction of Ukraine?
URN Daily today brings you a comprehensive analysis of this question by guest writer Swen Lorenz, CEO of Sarnia Asset Management and the face of UndervaluedShares.com.
In a nearly 4,000-word chart-laden analysis for URN, Swen touches on Ukrainian stocks such as Ferrexpo, Astarta, MHP and others, as well as international transport plays such as WizzAir and Ryanair, banking stocks such as Erste Group Bank and Raiffeisenbank International, and "idiosyncratic opportunities" such as Cadogan Energy Solutions and Cohen Circle Acquisition Corp.
He ponders the potential return of Ukrainian consumer demand, the possibility of a new convergence theme as the European Union extends its embrace of the East, a Polish reconstruction-fueled boom and the strengthening of the defense sector in a new secular trend.
What is already priced in? Are there opportunities to buy the dip? What are the considerable risks that still remain?
Swen's analysis is too long to reprint here. Please read it on our website at https://www.ukrainerebuildnews.com/99-stocks-you-c-ahead-of-the-historic-1-trillion-reconstruction-of-ukraine/.
US entitled to Ukraine's revenue from some resources under proposed economic partnership deal, Treasury Secretary says
US Treasury Secretary Scott Bessent told Fox Business that a blueprint of an economic partnership deal he presented to Ukraine's President Volodymyr Zelensky on Wednesday anticipates that the US has the right to revenue Ukraine is already receiving from some resources.
Bessent presented the draft document on the bilateral economic partnership between Ukraine and the US to Zelensky during his visit to Kyiv. The partnership is tied to US President Donald Trump's earlier proposal that Ukraine give the US access to its rare earth minerals in exchange for military aid.
Bessent told Fox Business that how quickly the agreement, of which details remain unknown, will be implemented depends on "the appetite for risk-taking" from the sides that want to commit.
"The real payoff will be when the conflict ends and there is the rush to rebuild Ukraine," Bessent stated.
Bessent also said the economic partnership deal is the first step in Trump's plan to end the war in Ukraine. "It will be showing the Russians that we have an enduring alliance with Ukraine, and then more assets that the US government, US entities have on the ground in Ukraine — that should act as a deterrent over the long run to any more incursions by the Russians," he noted.
"I think by going into partnership with the US, it gives a new level of transparency to Ukrainian business. And the way we are going to structure the US interest in the fund is very high corporate hygiene standards, best practices. And one assumes that will then be transmitted to the larger Ukraine as a whole," Bessent said.
Following the meeting with Bessent, Zelensky stated Ukraine will review the details of the proposed agreement ahead of the Feb 14-16 Munich Security Conference in Germany where he is set to meet with US Vice President JD Vance and State Secretary Marco Rubio.
European officials expect Trump to insist they pay for Ukraine's reconstruction, FT says
European officials anticipate US President Donald Trump will insist they fund Ukraine's reconstruction and station troops there to uphold a peace deal they wouldn't be a part of, the Financial Times reported on Thursday, citing more than half a dozen unnamed senior European officials.
"The Americans don’t see a role for Europe in the big geopolitical questions related to the war. It's going to be a real test of unity. Trump sees us as money. And frankly, we haven't been clear on what our seat at the table would look like in exchange for that money," one senior official said.
The comments come after Trump on Wednesday announced he had a phone call with Russian President Vladimir Putin during which they agreed to "immediately" start talks about ending the war in Ukraine, surprising European leaders.
A scenario in which "the US says, 'We did the ceasefire, and all of the rest is for you to clean up' … wouldn’t work [for us]," one EU diplomat involved in discussions between European capitals told the FT. "There is a limit to what the EU alone can realistically provide in terms of money, arms, and at some point maybe boots on the ground," they added.
Officials in Kyiv have voiced frustration with European leaders. "It's clear that everyone is waiting for Trump to tell them what to do," a senior Ukrainian official told the FT.
Details of Trump's peace deal for Ukraine remain unknown, but more clarity is expected this weekend when a group of senior White House officials, including US special envoy for Ukraine and Russia Keith Kellogg, Vice President JD Vance, and Secretary of State Marco Rubio, is expected to attend the Munich Security Conference in Germany.
On Wednesday, US Defense Secretary Pete Hegseth said that returning to Ukraine's pre-2014 borders was an "unrealistic objective," ruled out Ukraine's NATO membership, and also stressed that US troops won't be deployed to Ukraine as part of any security guarantee to the war-torn country.
Ukraine kicks off bilateral screening on financial services chapter under EU accession process
Ukraine's government said on Thursday it has launched bilateral screening with the European Union to determine the compliance of the country's legislation with EU law under Chapter 9, Financial Services, as part of its path to accession.
During the meetings between Ukrainian and EU officials on Feb 13 and 14 in Brussels, the Ukrainian delegation is presenting reports on banking and financial conglomerates, financial market infrastructure, securities markets and investment services, insurance, sustainable finance, and digital technologies.
"Ukraine has all the necessary prerequisites to achieve this goal (of joining the EU): an effective mechanism of cooperation between the Government, Parliament, the central bank and other stakeholders has been established; moreover, work is underway to strengthen the capacity to implement the necessary reforms," the government said in a press release.
Ukraine applied for EU membership several days after it was invaded by Russia in February 2022, and was granted candidate status in June that year. Membership negotiations opened in June 2024.
Under changes made in 2020, EU accession negotiations are divided into six "clusters," or areas of interest: Fundamentals; Internal Market; Competitiveness and Inclusive Growth; Green Agenda and Sustainable Connectivity; Resources, Agriculture and Cohesion, and External Relations. Chapter 9 falls under the Internal Market cluster.
The bilateral screenings allow for assessing a candidate country's legislation for its compliance with the EU law in each of 33 negotiating chapters. Based on the screenings, the European Commission drafts a report which later serves as the basis for the negotiations on the chapters.
Ukraine has so far held screenings for several chapters. The EC said earlier it aims to open talks with Ukraine "as soon as possible" in 2025 on the Fundamentals, which include chapters on public procurement; statistics; judiciary, and fundamental rights; justice, freedom, and security, and financial control. Negotiations on fundamentals open first and close last.
Boryspil, Ukraine's largest airport, holds talks with Wizz Air on relaunch of flights
Ukraine's largest airport, Boryspil International Airport near Kyiv, said on Thursday its top management has held talks with low-cost carrier Wizz Air on the relaunch of air traffic once the country's airspace is opened.
The airport's management briefed the airline executives on its operational readiness, infrastructure status, airfield, terminals, ground handling equipment, and measures to maintain certification standards, staff qualifications, and safety and security.
A visit by the Wizz Air delegation to Boryspil will follow to inspect the airport, as per a press release from the airport.
"This is one more necessary step that is making us closer to the resumption of flights. Every day we are working to be ready to immediately start receiving flights, handling passengers and cargo, and to reconnect Ukraine and Ukrainians with the world," said Boryspil Airport CEO Oleksiy Dubrevskyy.
Apart from the internal preparations, the readiness of airlines is a key factor towards the resumption of flights, Dubrevskyy noted, adding that Wizz Air CEO Jozsef Varadi "confirmed that Wizz Air has a clear and ambitious plan to return to the Ukrainian market."
Earlier this week, Varadi said Wizz Air plans to start flying to Ukraine within six weeks of any ceasefire agreement with Russia, reinstating about 30 inbound routes into Ukraine.
In 2021, a year before the Russian full-scale invasion of February 2022 when Ukraine's airspace was closed, Boryspil Airport handled 9.4 million passengers and 50 thousand tonnes of cargo, representing 60% of passengers and 80% of cargo that arrived or departed from Ukrainian airports.
Longer Reads:
How UkraineInvest managed to defy FDI logic by attracting investors to the war-torn country: Investment Monitor
The Ukrainian government's private investment promoter UkraineInvest has been successfully attracting investments into Ukraine even after the start of the war with Russia even though political stability is one of the most sought-after qualities in foreign direct investment (FDI) destinations, Investor Monitor reported in a feature analyzing the paradox of FDI in conflict zones.
Investor Monitor quoted Courtney Fingar, an FDI specialist and former editor-in-chief of the publication, who talked about FDIs in conflict zones during a recent seminar in Paris.
At the event, Fingar gave the example of the Irish building materials company Kingspan which announced plans for a €280 million direct investment in Ukraine just months after the full-scale Russian invasion in February 2022.
Fingar noted that this investment was no coincidence. Only a month after the invasion, UkraineInvest conducted a "full-on outreach campaign while Russian tanks were rolling around," she stated.
At the time, UkraineInvest started revising investment laws to boost incentives. The updates, which became effective in 2023, lowered the investment threshold for incentives, expanded eligible project types, simplified land rights, and introduced tax benefits.
A strong media campaign supported this effort. Fingar said that Sergiy Tsivkach, the then CEO of UkraineInvest, "was out front," in the "international media, saying to investors, don't wait until the war is over […] We're open for business."
However, FDI inflows in Ukraine still dropped sharply after the invasion, Investor Monitor reported. According to data from UN Trade and Development (UNCTAD), inward FDI that Ukraine received fell from $7.3 billion in 2021 to $848 million in 2022.
Before the invasion, Ukraine had a mid-sized economy and is geographically close to major markets like the EU and the UK, which are advantages in attracting FDI that many developing countries hit by violence don't have, the report said.
Attracting FDI during a conflict is possible and can offer long-term benefits, but the industry type and the country's broader circumstances remain key to the investment's value, Investor Monitor concluded.
Internationale Politik Quarterly: Europeans must find a way to influence Trump's peace deal for Ukraine
European leaders have to find a way to influence and shape any peace deal for the war in Ukraine proposed by US President Donald Trump instead of opposing it, but to do that they would first need to reach a consensus between themselves on the issue, Claudia Major, an incoming senior vice president of the German Marshall Fund of the United States, and Jana Puglierin, head of the European Council on Foreign Relations' Berlin office, wrote in an op-ed for the Internationale Politik Quarterly.
They would need to work together to persuade Trump that both his personal interests and those of the US are served by Ukraine emerging from the war as a strong country even if its full territorial integrity isn't restored, the authors wrote. "As long as Europeans fail to agree, however, the risk of the next war in Europe will increase," Major and Puglierin concluded.
Politico: Ukraine peace talks will be a lengthy, complex process
Negotiation for ending the war in Ukraine will be a complicated process that will take many months despite the belief that it can be reduced to setting a cease-fire line along the current front line and providing a security guarantee to Ukraine, Wolfgang Ischinger, a former German ambassador to the US and the UK, wrote in an op-ed for Politico.
During the negotiations, the security situation in Europe, the lifting of sanctions against Russia, nuclear and conventional arms control, and overall strategic stability, will all have to be discussed, Ischinger wrote. In all this, it is important to avoid short-sighted solutions, establish long-term priorities, and prepare for a challenging negotiation process, he noted.
Ukraine's economy ministry must help boost investment into science sector: CEPR policy insight
Ukraine's Economy Ministry must work to increase investments into the restoration of the country's science and innovation sector which has suffered significant damage since the full-scale Russian invasion in 2022, according to a policy insight published by the Centre for Economic Policy Research.
Most notably, Ukraine's science and innovation sector suffered a loss of human capital, as many scientists have been unable to continue their research within Ukraine, while others have left the country; a loss of physical capital, due to the destruction of university buildings, research facilities, and other essential infrastructure; and disruptions to international collaborations, the paper read.
Although it is too soon to fully quantify the effects of the invasion on Ukrainian science, the impacts are already apparent, the authors wrote. Survey data indicates that the war has triggered a significant emigration wave from Ukrainian universities. In 2022, the Ukrainian Ministry of Science and Education estimated that around 6,000 researchers—10% of the country’s total of 60,000—left Ukraine within the first few months following the invasion.
These immediate concerns related to the science sector typically fall within the responsibility of the Ministry of Science and Education, but economic policies for which the Economy Ministry is in charge - related to taxation, employment, intellectual property, and entrepreneurship - are closely connected to science and innovation policies and can play a vital role for the future of the sector.
The paper recommends expanding existing tax policies that exempt international funds received for scientific research in Ukraine from income tax. In addition, targeted investments in training and R&D, especially in areas relevant to wartime and recovery needs, can stimulate innovation and boost productivity.
As the Economy Ministry is responsible for implementing the Ukraine Plan—a vital tool for the country's recovery, reconstruction, and modernization—it is essential to secure dedicated funding from the Ukraine Facility to support the development of science and innovation, the authors wrote.
The Ministry of Economy can also utilize the National Council of Ukraine on Science and Technology Development for cross-government coordination and to establish a robust science-for-policy system, and engage the diaspora for science policy advice and active participation.
Apart from human capital, physical capital is important for scientists to carry out research, the paper noted. The reconstruction period presents an opportunity for Ukraine to 'build back better' in its science and innovation system. Currently, the country faces challenges such as outdated infrastructure and remnants of the Soviet system, including weak connections between research and teaching and low levels of research commercialization, according to the study.
Ukraine was ranked 55th out of 132 economies in the 2023 Global Innovation Index (GII) (WIPO, 2023). This is a slight improvement from 57th in 2022, but a decline compared to its ranking of 49th in 2021, 45th in 2020, and 47th in 2019, the authors noted.
Social Media Posts
Concern over Unplanned Inspections
The European Business Association, which represents European businesses in Ukraine, posted that businesses are worried by "an increase in unplanned inspections regarding compliance with legislation on the prevention and reduction of tobacco product consumption and their harmful impact on public health."
"These inspections are mostly conducted based on individual complaints without proper justification," the EBA said, and called on authorities to "suspend unplanned state supervision (control) measures and to conduct them in the future only in exceptional cases and by individual decisions of the Ministry of Health."
Secrecy of Mineral Deposits Questioned
In a separate post, the European Business Association said it has asked the government of Ukraine to drop the "secret" classification of information on many mineral deposits, as it hinders "the signing of international agreements in the subsoil use sector and complicate cooperation with strategic partners."
"Currently, information on the reserves and resources of many mineral deposits in Ukraine is restricted under the classifications “secret” or “for official use only.” This includes data on deposits of diamonds, gold, lithium, titanium, platinum, and other strategic materials. Closed information can reduce investor interest."
Mineral Wealth Is 'a Unique Chance' for Ukraine
Roman Opimakh, a former director general of the Ukrainian Geological Survey, published an article stating that "The arrival of international investments in the development of critical minerals is a unique chance for Ukraine. US business can become the best "iron dome" for Ukrainians."
"Ukraine holds 23 of the 50 strategic materials identified by the US as critical, and 26 out of the 34 recognized by the EU as critically important," the article states. "Particularly, Ukraine holds very competitive positions in five key ones: titanium, graphite, lithium, beryllium, and REEs."
Norway Helps Emergy, Tschudi Logistics and Fenix Repower
The Norwegian - Ukrainian Chamber of Commerce (NUCC) said the Norwegian companies Emergy, Tschudi Logistics Group and Fenix Repower are the first Norwegian companies to benefit from the government program supporting firms investing in Ukraine.
The Norwegian government has earmarked 40 million kroner ($3.6 million) for the program, which "aims to strengthen trade relations, secure energy supplies, and improve infrastructure as part of the country's reconstruction efforts."
Self-Energy Generation in Industrial Parks?
UkraineInvest, the state investment promotion agency, posted that parliament approved in the first reading a draft law that "aims to remove excessive regulatory barriers and improve the operating conditions of industrial parks in Ukraine."
The draft would broaden the range of facilities that an industrial park can hold, introduce the concept of eco-industrial parks, expand the list of activities allowed with industrial parks, including electricity generation, and regulate the location of non-industrial facilities in industrial parks.
Ahler Talks Logistics
The government Swiss-Ukrainian Reconstruction Agency, SURA, promoted an article by Ahlers Logistics offering a "firsthand perspective on the evolving logistics landscape in Ukraine."
"Military actions have severely damaged critical infrastruture, including roads, bridges, railways, and warehouses, while ongoing hostilities continue to restrict access and complicate cargo movements. Rising fuel costs and increased logistics expenses add further challenges, and air transportation remains non-operational."
Sustainability Reporting in Ukraine
Nataliia Hutarevych, senior associate at the Sayenko Kharenko law firm, posted the key points of a new draft law introducing sustainability reporting in Ukraine.
The draft introduces the concepts of "sustainability reporting" and "sustainability standards" and stipulates that the government will detemine reporting procedures and deadlines. Companies affected include "large enterprises and parent companies of large groups."
URN Daily: Sense Bank and Ukrgasbank for sale? And US seeks to cancel $4.7 billion of Ukraine's debt
