<\/p>\n
Investors are throwing their support behind Ukraine and pocketing some of the most lucrative gains in bond markets.<\/p>\n
The country\u2019s resiliency on the battlefield against steep odds, along with billions in fresh European aid and restructuring deals with creditors, add up to a new sense of confidence that\u2019s powering Ukraine\u2019s bond prices higher. Since the start of 2023, an index of the debt has returned 150% and this year is shaping up to be another run of double-digit gains.<\/p>\n
\u201cThese drones have helped defend the Ukrainian front line,\u201d said Roger Mark, an analyst at Ninety One Asset Management in London. \u201cThat\u2019s just fundamentally altered the narrative from a year ago from \u2018this country\u2019s losing the war and we don\u2019t know what the funding outlook is looking like\u2019 to \u2018this is a country that now has funding secured and if anything, might actually be winning\u2019.\u201d<\/p>\n
Read:
The world economy: A tale of two shocks
Russia piles up debt<\/p>\n
Skeptics warn that the peace talks are still sputtering and winter could turn the war in Russia\u2019s favor if the Kremlin intensifies its bombing campaign and once again plunges Kyiv and other cities into darkness. There\u2019s also an argument that the Ukrainian bond rally has been inflated by investors rushing headlong into all kinds of risk. But emerging-market fund managers say that despite the drawbacks, Ukraine is a high-octane bet too tempting to ignore.<\/p>\n<\/p>\n
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Of course, Ukraine is not your average bond market. Only the specialists adept at navigating restructurings tend to trade this kind of speculative and less liquid debt. Prices don\u2019t move in line with mainstream markets, which have been selling off on worries about inflation and rising levels of debt worldwide.<\/p>\n
Ukrainian bonds, instead, essentially behave like a one-way bet on whether the country can eventually negotiate an end to the war and revive its economy. Take the country\u2019s notes due in 2029, currently yielding 13%. They trade around 85 cents on the dollar. Back in June 2025, the bonds were deeply distressed at 58 cents.<\/p>\n
Even though prices have wobbled in the past month, the returns are still better than last year. Ukraine\u2019s sovereign bonds have risen 12% so far in 2026, according to a Bloomberg index tracking nine dollar-denominated securities. In 2025, the gauge was up 10%.<\/p>\n
Investors believe Ukraine has bought itself more time and a stronger negotiating hand with its surprise wins on the battlefield. And just as important, Europe is showing a willingness to step into the gap left by the US, with policymakers approving a \u20ac90 billion ($106 billion) loan to Ukraine earlier this year.<\/p>\n
\u201cUkraine is militarily doing a lot better and shown a lot of adaptability in drone technology,\u201d said Anthony Kettle, an emerging-markets fund manager at RBC BlueBay. \u201cWhat it lacks in manpower, it has made up for in technical nous.\u201d<\/p>\n<\/p>\n
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Ukraine hits Russian refineries as Kyiv faces missile barrage<\/p>\n
As a result, the extra yield that Ukrainian bonds pay over Treasuries has shrunk dramatically. The spread is around 7.4 percentage points, according to a JPMorgan Chase & Co index, about 2.5 percentage points less than in January. Corporate debt has also done well, with bonds from Metinvest NV returning 31% this year and those from energy firm Naftogaz up 23%.<\/p>\n
That rapid rally is a red flag, says Daniel Wood of William Blair International. Ukraine has been running out of the missiles it needs to defend itself against Russia\u2019s intensified attacks, and airstrikes on the Black Sea ports look set to halve this year\u2019s grain exports, a mainstay of the economy.<\/p>\n
\u201cUkrainian bonds are a little overpriced,\u201d said Wood, who has taken his position down to neutral. \u201cThere is perhaps too much optimism priced into the market.\u201d<\/p>\n
Ukraine is going through its own internal power struggles. Mykhailo Fedorov, the country\u2019s popular ex-defence minister, has strongly hinted at his political ambitions with a video calling for wartime elections. Lawmakers also approved a new defence minister on Wednesday.<\/p>\n
Then there\u2019s the question of how the country will pay back all the debt it\u2019s taken on. Even with the strong backing of its allies, it\u2019s difficult to make any accurate forecasts about Ukraine\u2019s funding needs, said Pavel Mamai, co-founder of ProMeritum Investment Management. The country\u2019s debt load is more than its annual economic output, the Kyiv School of Economics estimates, with that ratio expected to reach 110% by 2027.<\/p>\n
Taken together, the bonds are a bold bet with potentially a lot of upside, according to Matthew Vogel, head of EM strategy at Marex. Even though Ukraine is heading into a dangerous stretch, he still sees good reasons for investors to keep owning the debt.<\/p>\n
\u201cThe opportunity cost of not being involved is massive,\u201d Vogel said. \u201cThe outlook is fraught with risk,\u201d but \u201cthat\u2019s why we\u2019re at a 12% yield and not at a 10% or a 9% yield,\u201d he added.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#bond #rally #Ukraine #shows #beat #odds<\/p>\n","protected":false},"excerpt":{"rendered":"
Investors are throwing their support behind Ukraine and pocketing some of the most lucrative gains…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[1659,1286,2586,64,565,5266],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/14242"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14242"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/14242\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14242"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14242"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14242"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}