By Ivan Anderzhnov
BG Capital, the investment banking arm of Bank of Georgia, is closing down its Ukrainian office to focus on its domestic market where it has much more positive prospects for growth, according to Kyivpost.
“As of today, the Kiev office is officially closed,” said Nick Piazza, CEO of BG Capital, in a letter to clients on November 1. The decision is based on a negative outlook and concerns about the country’s risks and political situation, which echoes many investors’ attitude to the whole country.
Combined with the high volatility and uncertainty on global markets this adds up to the overall gloomy situation in Ukraine were the investment climate is poor and even those few investors who have stayed are pulling their money out of the market now.
A number of other smaller investment firms and brokers like Arsenal and Energy Capital and international companies like Czech utility CEZ have closed down their Ukraine operations earlier this year because of difficult market conditions. Local stock market went south, with the UX Index dropping 50% since its peak in March this year, and it looks like it’s not going to come back any time soon.
So BG capitulated and went home to Georgia. There are still too many brokers in Kiev.