One Step Back and.........Another Step Back

A recent report in the Kyiv Post tells us about Brian Mefford who acted as an election observer in the city of Odessa on election day 31st October 2010.
Read what he says.......

"During Ukraine’s Oct. 31 local elections, I served as an international election observer on behalf of the Committee for Open Democracy The Committe for Open Democracy was the largest accredited observation mission from abroad with 96 observers from 14 countries.We focused our efforts on Odesa (Odessa) due to its history of problematic and competitive elections.

For example, the 2002 election results there were later overturned by the courts due to fraud and use of administrative resources. Our official statement criticized the intentionally slow vote counting process, hostility to some international observers, use of administrative resources, and wide scale use of technical parties (parties that exist only on paper) to staff commissions.Simply put, the Odesa election was a setback for democracy and free elections in Ukraine.The oldest and largest domestic observation organization, the Committee of Voters of Ukraine, characterized the Odesa election as “chaotic” and resembling “the 2004 presidential election.” They added that the Odesa election “represents a big step backwards.”

Well there you go again in Odesa Ukraine.

See the full article here:

Things are getting better.....Really?

Let slook at the property market in the UK, always a good guide for the health of the economy.
What does the RICS tell us:

Royal Institution of Chartered Surveyors will release data for housing survey for the month of October. House prices in England and Wales suffered their sharpest fall last month since May 2009. The RICS house price index dropped to -36 in the three months to September from -32 in the three months to August. RICS spokesperson Ian Perry said: "The fresh influx of property to the market combined with a lack of buyers remains the key problem affecting the sector.”
The Royal Institution of Chartered Surveyors' survey is expected to show a further weakening in house prices, in line with other recent data suggest-ing the housing market is continuing to weaken fast after a modest recovery last year.

Not good is it...

Step forward Ukraine...According to Ukraine Prime Minister Azarov:

VIENNA, Nov 8 (Reuters) - After a terrible 2009, Ukraine's economy will grow five percent in 2010, higher than earlier government predictions, and then another five to ten percent next year, the prime minister said in an interview on Nov. 8.

"The growth in gross domestic product will be about five percent this year. Next year the minimal growth we see is five percent. At maximum, we'd get to around 10 percent," Mykola Azarov told Reuters in an interview during a visit to Vienna.

Really? Ukraine's economy will grow by 5% in 2010.?

I hate being a negative person put right now all the evidence points in another direction about Ukraines economy. Each week I meet bankers, lawyers, accountants, and many people involved in 'making things'. I have yet to meet one of these people who can tell me that the economy is looking good for them. I heard one banker quote this last week:
"The sector (banking) is on a life support machine and very soon it will flat line"

Draw your own conclusions

HONG KONG and SHANGHAI BANKING CORPORATION

HSBC as it is commonly known is thinking about leaving London and setting up its HQ in another country. HSBC is the UKs largest bank in terms of market value and did not need any help from the government during the financial crisis. Interesting? Where would it go I wonder....China?

See: http://www.independent.co.uk/news/business/news/hsbc-in-new-threat-to-leave-the-uk-over-osborne-banking-levy-2126760.html

Great Concern about recent events in Ukraine

It has always been difficult trying to convince inward investors that it’s safe to put their money into Ukraine property/companies/projects etc.

Events this week in Ukraine, if they are found to be accurate and true, are a cause for great concern about the climate for inward investment into the country.

To highlight these concerns let me turn things around and demonstrate how serious the situation really is. Imagine that a British company had invested say GBP 100 million into developing a leisure resort in Majorca, Spain. The investment proved successful and the resort employed over 1500 people and was a major contributor to local taxes and was a positive benefit for the Spanish economy. Imagine that the Spanish tax authorities then suspected the mayor of Majorca has been stealing money from state funds, so to find out what was happening they send in 100 armed security police together with the state security service and confiscate computers, files, all digital information and cause great stress to the employees of the resort complex. All this without any prior warning and an assumption that the resort owners must be doing something illegal. The British owners of the resort are also the owners of well known newspapers in London. By pure coincidence articles had recently appeared in these newspapers which criticized the Spanish government. (Obviously this kind of situation would never occur inside the European Union)

Well, this IS what happened this week in Alushta, Crimea. (Replace above instead of Majorca, Spain.)
Alexander Lebedev and his son Evgeny Lebedev, who is a British citizen and lives in London. Invested hundreds of millions into the Alushta complex and is one of the best resorts on the Crimean peninsular in Ukraine.

Alexander Lebedev is one of the richest men in Russia and faced a similar stressful situation in Moscow a few days earlier when his bank was raided by Russian authorities.

See: http://www.independent.co.uk/news/world/europe/moscow-police-criticised-for-circus-raid-on-lebedevs-bank-2123558.html

See: http://www.telegraph.co.uk/news/worldnews/europe/russia/8114216/Alexander-Lebedevs-hotel-raided-in-Ukraine.html

See: http://www.independent.co.uk/news/world/europe/independent-owners-hotel-is-raided-in-row-over-charity-fund-2126735.html

Maybe the Ukrainian authorities claim to have good reason to storm a hotel resort/complex looking for evidence related to a suspected crime, but it clearly demonstrates that here in Ukraine they operate on a totally different wave length when compared to civilised countries in the European Union.

When British people read about this in British national newspapers, how on earth can I start to defend any of the actions taken by the Ukrainian authorities?
How can I claim that it’s safe to invest in Ukraine and you do not have to worry about any actions from the state?

Maybe the Ukrainians think it’s OK to act in this way as the owners of the resort are just ‘Russians’?

The situation in Ukraine is not looking good for investors. This is very sad news.

Its not the voting but the counting that matters....

Take FIVE days in a democratic civilised developed nation to count the votes after an election and you would expect that the public would be wondering what monkey business the government is up to. But in Ukraine no one appears to care. As if their voices would be heard anyhow?
How on earth can it take five days to count the votes? More like it takes five days to make sure the desired result is announced. Anyhow the media are not happy, or should I say the media who are not afraid to say so are not happy.


The Economist
see: http://www.economist.com/node/17421444?story_id=17421444


Kyiv Post
See:http://www.kyivpost.com/news/nation/detail/88821/

Ukraine Local Elections - Observations

It would appear that the turnout in most of the regions has been very low.
Electoral commissions have been quick to point out that 'everything has gone smoothly'.
The Council of Europe observers even reported: "In general the elections were conducted in a calm and peaceful atmosphere,".

However local observer groups like OPORA are reported to claim: "There have been so many violations that we cannot say that it was democratic, fair and open,".

No suprises that the Party of the Regions (POR) claim to have done well and are happy with the results. Lets be honest...IS ANYONE in Ukraine suprised that the POR did well?
It was a given from the start. The jokes circulating in Kyiv include: "I didn't vote, I didn't even leave the apartment, but I bet the POR managed to get my vote some how".

We all wait the official results with a little interest. APATHY is the word I would apply to these elections. People were just not so interested. Very sad, but that's democracy for you or....mmmnnn is it?

The State of the Property Market(s) Just want to get this off my chest

It would appear that things are not looking good for property owners or buyers in the UK.
According to the International Business Times:

U.K. house prices recorded their largest fall since January 2009 in October signaling that the property market is cooling fast. The average cost of a
home dropped 0.9 percent as compared to the previous month dip of 0.4%. The average cost was at 156,200 pounds ($248,764) in October,
marking the fourth month of falling prices.
Buyers demand also fell 2 percent, while the number of homes for sale rose 1.9 percent. The number of home loans approved also stood about half
that seen at the peak of the boom in 2007.
The figures, were released soon after the latest Bank of England statistics which showed that September U.K. mortgage approvals fell, suggesting
that U.K. housing market is still fragile and might not be ready for another quantitative easing (QE) planned to be implemented by the national bank.
Mortgage approvals were little changed at 47,474 in September more than the economist forecasted.
Even Nationwide Building Society recently said that U.K. house prices fell to an eight- month low in October. Obtaining a mortgage will get even
more difficult after the new regulation kicks in. First time buyers will also face difficulties as lenders make it more difficult by asking for larger
deposits. Even the Bank of England have raised concerns over the increased number of borrowers that are unable to pay back their mortgage.
Despite strong economic growth between July and September, there are still concerns that the last month's government spending cuts may further
hit consumer confidence, making the recovery fragile.

What about Ukraine? - I would like to make a very clear and loud statement to the many property developers and owners in Ukraine, particularly in the city of Kyiv.
THE PRICE OF PROPERTY AND LAND WILL NOT COME BACK TO THE LEVELS IT WAS PRIOR TO 2008.
WE WILL NOT...REPEAT NOT... SEE A RETURN TO THE CRAZY PRICES WE SAW BEFORE.
SO IF YOU HAVE A CHANCE TO SELL A PROPERTY NOW, JUST SELL IT. IF YOU HAVE A BUYER TREAT THEM LIKE VIPS BECAUSE YOU DO NOT UNDERSTAND HOW LUCKY YOU ARE TO FIND SOMEONE WHO HAS CASH TO BUY ANY PROPERTY.

You would think it was easy being a BUYER in Ukraine when you are looking to buy land or a house. Plus when you do not need a mortgage. But no this is Ukraine, the owners/developers are still dreaming about selling property at higher prices. The banks are NOT providing mortgages unless a client has a large cash deposit and is prepared to pay very high interest on the loan.

There have been very few property sales in Ukraine during 2010. DO NOT let any agency or others involved in property tell you otherwise.
In fact come to think of it, winter is now fast approaching. My advice is DO NOT buy any property in Ukraine until Spring 2011