EBA Investment Attractiveness INDEX
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Transcript of EBA Investment Attractiveness INDEX
Investment Attractiveness Index with the support of theInMind research company
EBA Investment Attractiveness INDEX
III/2011Conducted by EBA with the support of
InMind research company
Investment Attractiveness Index with the support of theInMind research company
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Project summary• The results of 13th wave of investment climate in Ukraine tracking research.
• Methodology: The EBA Investment Attractiveness Index is assessed as the mean value based on the following five questions:
• What do you think about the investment climate in Ukraine?
• How would you estimate the investment climate for your company in Ukraine at the moment compared to the previous three months?
• What are your expectations of the investment climate in Ukraine over the next three months?
• In your opinion, would it be profitable for new entrants to invest in Ukraine over the next three months?
• What are your expectations of the business environment of your primary industry over the next three months?
• Participants: 122 CEOs of EBA members companies
• Timing: September 7th, 2011 – September 23rd, 2011
• Survey Implementation: the Survey was conducted by EBA with the support of InMind research company
Investment Attractiveness Index with the support of theInMind research company
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Key findings
2,56 2,57
3,08 3,25 3,20 3,28 3,40 3,392,56
2,642,222,22
3,14
0
1
2
3
4
5
III/2008IV/2008 I/2009 II/2009 III/2009IV/2009 I/2010 II/2010 III/2010IV/2010 I/2011 II/2011 III/2011
EBA Investment Attractiveness Index
Investment Attractiveness Index with the support of theInMind research company
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Key findings
3,7 3,7
2,1
3,5
2,3
3,53,63,8
2,7
2,12,22,3
2,0
2,3
3,1
2,5
3,63,43,2
2,62,5
1,8
2,8
3,2
2,73,23,23,22,7
2,3
3,3
3,13,12,72,7
0
1
2
3
4
5
III/2008 IV/2008 I/2009 II/2009 III/2009 IV/2009 I/2010 II/2010 III/2010 IV/2010 I/2011 II/2011 III/2011
Current Investment Climate evaluationInvestment Climate Dynamics: changes to the previous 3 monthsExpectatin on Investment Climate change within next three months
Investment Attractiveness Index with the support of theInMind research company
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Key findings
III/2008 IV/2008 I/2009 II/2009 III/2009 IV/2009 I/2010 II/2010 III/2010 IV/2010 I/2011 II/2011 III/2011
Investment Climate in Ukraine 3,1 2,3 2,0 2,3 2,2 2,1 2,7 3,8 3,6 3,5 3,7 3,7 2,3
Investment Climate Dynamics: last 3 months
2,8 1,8 2,1 2,7 2,5 2,6 3,2 3,2 3,1 3,4 3,6 3,5 2,5
Investment Climate Dynamics Expectations: next 3 months
3,1 2,2 2,2 2,8 2,6 2,8 3,4 3,0 3,2 3,2 3,2 3,2 2,7
Profitability for new entrants: next 3 months
3,4 2,3 2,4 2,7 2,6 2,5 2,9 3,3 3,2 3,2 3,4 3,4 2,6
Investment Climate of Primary Industry: next 3 months
3,3 2,5 2,4 2,7 2,9 2,8 3,2 3,1 3,0 3,1 3,1 3,2 2,7
General EBA Index 3,14 2,22 2,22 2,64 2,56 2,57 3,08 3,25 3,20 3,28 3,40 3,39 2,56
Investment Attractiveness Index with the support of theInMind research company
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Key findings
3,2 3,3 3,4 2,63,43,12,62,62,63,1 2,2 2,2 3,3
3,53,3
3,53,7 3,6
2,42,7
3,2 3,1 3,1 3,2 3,2 3,3
2,72,9
2,42,3
3
2,5
2 2
2,72,3
2,7
3,3
2,3
III/2008Sep,3-Oct,2
N=151
IV/2008Oct,23-Oct,31N=53
I/2009Jan,19-Feb,12N=103
II/2009Apr,6-May,14N=78
III/2009Sep,2-Sep,30N=59
IV/2009Dec,14-Jan,12N=99
I/2010Mar,9-Mar,31N=61
II/2010Jun,1-Jun,18N=113
III/2010Aug,30-Sep,18N=96
IV/2010Nov,11-Dec,3N=110
I/2011Feb,7-Feb,23N=91
II/2011May,16 -
Jun,1N=124
III/2011Sep,7-
23,N=122
General EBAIndex
PresentInvestmentClimate
FutureInvestmentClimate(Expectations)
Investment Attractiveness Index with the support of theInMind research company
EBA – Index: Components
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Investment Attractiveness Index with the support of theInMind research company
Mean3,1 2,3 2,0 2,3 2,2 2,1 2,7 3,8 3,6 3,5 3,7 3,7 2,3
Investment Climate in Ukraine
The Investment Climate in Ukraine is… (5 point scale)
0
–
+
4%
24% 35% 24%22%
19%
12%
2% 2%
20%
16% 12%
44%
18% 15% 7% 12% 15% 15% 22% 24% 22% 27% 25%
37%
6% 15% 5% 3%20%
50% 49% 49% 51%35%
11%
8%
3%5%
19% 13% 13% 18%24%
2%11% 15%
33% 47% 46% 53% 59%42%
8%
51%
20%19%8%
5% 3%3%4%
III/2008 IV/2008 I/2009 II/2009 III/2009 IV/2009 I/2010 II/2010 III/2010 IV/2010 I/2011 II/2011 III/2011
5 - definitely favourable to investing
4 - rather favourable to investing
3 - neutral to investing
2 - rather unfavourable to investing
1 - definitely unfavourable to investing
Mean
8
Investment Attractiveness Index with the support of theInMind research company
Investment Climate Dynamics: last 3 months
The Investment Climate in Ukraine is… (5 point scale)
0
–
+
7%
41%36%
13%17% 10%
3%0%
1%
14%
28%36%
22% 29% 34%13% 23% 24%
15% 13%15%
34%
50% 19% 17% 49% 47% 50% 56% 46% 51% 36% 30% 43% 40%
12% 13% 5% 4%
26%20% 19% 35% 43% 20%
11%
3% 4%
5%10% 6%
11%14%
22%
1%
40%
6%
2%2%
5%
III/2008 IV/2008 I/2009 II/2009 III/2009 IV/2009 I/2010 II/2010 III/2010 IV/2010 I/2011 II/2011 III/2011
5 - definitely became better
4 - rather became better
3 - remained the same
2 - rather became worse
1 - definitely became worse
Mean
Mean2,8 1,8 2,1 2,7 2,5 2,6 3,2 3,2 3,1 3,4 3,6 3,5 2,5
9
Investment Attractiveness Index with the support of theInMind research company
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Investment Climate dynamics expectations: next 3 months
The Investment Climate in Ukraine is… (5 point scale)
0
–
+
2%
24%29% 6% 12% 3%
1% 1% 2%11%
22%33%
29% 32%37%
7%27% 24% 22% 16% 17% 27%
50% 36% 29% 50% 39% 45% 53% 47% 46% 39% 47% 51% 47%
17% 8% 14% 13%
37%
17% 21% 29% 29% 22% 15%
9%6% 3% 1%
3%
7% 9% 9% 7% 9%
3%38%
6%2% 3%
III/2008 IV/2008 I/2009 II/2009 III/2009 IV/2009 I/2010 II/2010 III/2010 IV/2010 I/2011 II/2011 III/2011
5 - will definitely become better
4 - will rather become better
3 - will remain the same
2 - will rather become worse
1 - will definitely become worse
Mean
Mean3,1 2,2 2,2 2,8 2,6 2,8 3,4 3,0 3,2 3,2 3,2 3,2 2,7
Investment Attractiveness Index with the support of theInMind research company
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Profitability for New entrants: next 3 months
Profitability for New Entrants … (5 point scale)
0
–
+
2%
30% 23%14%
19% 16%5%
2% 3%1% 2%
15%
14%32% 24% 39%
30% 28% 15% 19% 16%15% 15%
26%
40% 21% 32% 41% 19% 38% 44% 49% 44% 48% 36% 40% 42%
27%
11%15%
12%13%
18% 23% 29% 25% 38% 30%15%
17%
5%12%
2%5%
12% 6% 8%9%
13%
2%
2%34%
4%4% 9%
III/2008 IV/2008 I/2009 II/2009 III/2009 IV/2009 I/2010 II/2010 III/2010 IV/2010 I/2011 II/2011 III/2011
5 - Definitely profitable
4 - Rather profitable
3 - Difficult to say
2 - Rather not profitable
1 - Definitely not profitable
Mean
Mean3,4 2,3 2,4 2,7 2,6 2,5 2,9 3,3 3,2 3,2 3,4 3,4 2,6
Investment Attractiveness Index with the support of theInMind research company
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Investment Climate of primary industry: next 3 months
Investment climate of primary industry…(5 point scale)
0
–
+
2%
23%23% 6%
10%5% 2% 3% 3%
3%
9%
17% 33%31%
16%24%
13% 18% 24% 23% 19%18%
23%
45% 38% 30% 51% 48% 58% 52% 57% 52% 48% 54% 44% 57%
16%7%
6%22% 13%
33%16% 16% 19% 15% 23% 11%
20%
5%
3%2%
7% 6% 7% 9% 12%
3%25%
10%
7%4%
III/2008 IV/2008 I/2009 II/2009 III/2009 IV/2009 I/2010 II/2010 III/2010 IV/2010 I/2011 II/2011 III/2011
5 - will definitely become better
4 - will rather become better
3 - will remain the same
2 - will rather become worse
1 - will definitely become worse
Mean
Mean3,3 2,5 2,4 2,7 2,9 2,8 3,2 3,1 3,0 3,1 3,1 3,2 2,7
Investment Attractiveness Index with the support of theInMind research company
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Positive Changes in Investment Climate during the last 3 months
3%
2%
2%
2%
2%
2%
2%
6%
6%
3%
66%
9%
No changes
Positive changes in legislation
Business/market growth
Currency and exchange rate stabilization
Stability
Tax Code
Corruption acknowledgement /anticorruption actions
VAT refund
Dialogue with business
Some improvements in agriculture
Other
Difficult to say/no comment
When asked about positive changes that took place during the last 3 months two thirds of respondents (66%) state that they can not name any. Another 9% find it difficult to answer, totaling 75% (or three quarters) of investors who fail to name any improvements in the investment climate recently. This share significantly increased compared to II quarter 2011.
Among some positive changes in legislation there is a variety of singular comments included mentioning the Pension law, Subsoil and PSA law, Car leasing legislation, etc. Other trends marked by 3% each are business and market growth and currency stabilization.
Investment Attractiveness Index with the support of theInMind research company
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Negative Changes in Investment Climate during the last 3 months
16%
9%9%9%
7%7%
4%4%
3%3%3%
2%2%2%2%2%
8%7%
12%11%
No changes
Pressure & inspections from state administrations
Corruption and bureaucracy
Taxation
Problems with VAT refund
Uncertainty/instability
Opposition, freedom oppression
Customs procedures & legislation
Political control over the courts
No actual actions are taken
Export obstacles in agriculture
International financial crisis anticipation
Numerous negative changes / without specification
Weak energy policy
Inflation expectation
State control on economy
Raids on companies
Criminal structures influence increase
Other
Hard to say
The variety of negative changes mentioned by investors remains high. Main concerns are related to continuous pressure from state administrations, corruption practices, taxation, problems with VAT refund and general uncertainty.
The share of those who underline opposition oppression and political control over the courts as the negative driver of the investment climate has increased.
Among newly added comments there are the expectations of the international recession impact on the Ukrainian economy, weak energy policy of the government, and criminal structures influence increase.
Among other comments there are such issues as difficulties for small businesses, IMF requirements neglecting, worsening relations with Russia, and many others
Investment Attractiveness Index with the support of theInMind research company
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Estimation of the situation with solving issuesThe situation with solving 7 issues that EBA has raised remained unchanged compared to II quarter of 2011. Corruption and court system are still considered as the most problematic issues as over 75% of investors evaluate the situation in these areas as definitely or rather unfavorable.
Mean1,8 1,8 2,4 2,9 2,3 2,3 2,3
+0,1 0,0 -0,1 -0,1 0,0 +0,1 +0,1
Corruption Court system reform
Land reform Currency regulation
VAT refund Customs Procedures
simplification
Technical barriers to
trade
51% 43%
19%7%
30% 28%16%
25% 35%
33%
20%
29% 27% 43%
20%19%
35%
52%
29% 30%34%
2% 1% 12% 19% 11% 14% 6%1% 2% 1% 2% 2% 2% 2%
definitely favourable
rather favourable
neither unfavourable nor favourable
rather unfavourable
definitely unfavourable
Investment Attractiveness Index with the support of theInMind research company
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The 2nd wave of the economic recession expectations
Yes, it is definitely probable
Yes, it is rather probable
Difficult to say No, it is rather improbable
No, it is definitely improbable
15%
36% 34%
14%
1%
Estimating the probability of the second wave of the crisis in their sectors of business activity in Ukraine investors expressed apprehension of its rather high probability.
51% consider the next wave of recession in their industry definitely or rather probable, while only 15% consider it as rather or definitely improbable. Every third investor found it difficult to evaluate the crisis probability
Investment Attractiveness Index with the support of theInMind research company
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Key findings
• Five-grade scale is used to evaluate the investment climate, where 1 stands for the lowest evaluation and 5 stands for the highest evaluation
• In III quarter of 2011 the EBA Investment Attractiveness Index has averaged 2.56 on a 5 point scale compared to 3.39 in II quarter of 2011 reflecting the investors evaluation and expectation of the investment attractiveness of Ukraine.
• The main components of the Index were as follows:• the current investment climate evaluation received the lowest mark (2.3)• the climate changes during the last 3 months were evaluated at 2.5• future expectations of the investment climate received 2.7 on average
Investment Attractiveness Index with the support of theInMind research company
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Key findings
Considering progress with 7 key points that EBA raised in the context of business and authorities interaction the situation still remained unchanged while corruption and court system issues are evaluated as the most problematic issues.
In evaluation of the recent changes in the investment climate the negative feedback significantly prevails. Major concerns are related to continuous pressure from state administrations (12%), corruption practices (11%), unfavorable taxation, problems with VAT refund and general uncertainty (9% each). The share of those who underline opposition oppression and political control over the courts as the negative driver of the investment climate have increased. While 16% of investors stated that no negative changes took place recently the share of those who reported no positive changes significantly increased to 66%.
51% of investors consider the next wave of recession in their industry definitely or rather probable, while only 15% consider it as rather or definitely improbable. Every third investor found it difficult to evaluate the new crisis probability.
Investment Attractiveness Index with the support of theInMind research company
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