OREANDA-NEWS. February 20, 2008. I would like to thank the last speaker Nikolay Lavrenko and in fact everyone who has taken part in the very successful first day of our conference.

Now I have the privilege – and the challenge – of being the last person to speak as the day comes to an end. And I am going to be mercifully brief in my summing up.

Purpose of the conference

We at Renaissance have a reputation for creating a different sort of partnership. The company has an outstanding record of matching companies to investors to create profitable futures together.

We're very proud to have helped companies as diverse as Industrial Union of Donbas, Universalna insurance group, Ukreximbank and Marine Transport Bank, Furshet and Stirol, Karavan and KDD real estate developers and others to raise finance from both the debt and equity markets and to have helped our clients make attractive returns on their investments.

And during this conference we hope to preside over the start of some new and harmonious partnerships. Partnerships on the one hand between the Ukrainian companies and enterprises who need investment to realise their ambitious plans and, on the other hand, the investors who can help bring these plans to life.

We have heard today from an excellent cross-section of Ukrainian business: we've heard from some of our largest industrial groups, that have modernized Ukraine's largest productive assets and built them into integrated businesses fully capable of thriving in the modern global market place.

And we've heard from young, fast-growing companies who are serving the various needs of the new Ukrainian economy: modern real estate, insurance and high-quality food products.

Ukraine is a highly dynamic economy. It has averaged 7% growth a year over the last ten years.

Such dynamism offers fantastic opportunities to the international investment community.

2008 as a key point in the market's development

We see 2008 as a key point for the market, a year when it starts to change from an opportunity for the few into a market for the many, creating widespread national wealth and benefiting the entire country.

We have heard a lot about the market today, and of course the title of our conference is ‘Ukraine: Building Market, Creating Wealth'.

While the Ukrainian stock market rose by 135% last year, to become the second fastest-growing in the world, it is still lagging far behind the needs of the economy in its ability to channel capital to where it is needed.

Just one stark fact illustrates this. The annual volume of the Ukrainian stock market in 2007 was almost $1.9 billion. Contrast that with daily dealing on the Russian stock market of $3.5 billion. It's a massive difference, and one that shows how far the Ukrainian market has to go.

The stock market needs to broaden and deepen.

Why?

Well let's remember why capital markets exist. They are not an end in themselves. Their purpose is to move a country's savings into factories, shops and businesses where they can create jobs and income and raise living standards. In other words, to get money from the trading floor to the shop floor and factory floor.

If we want the Ukrainian economy to prosper, we need to develop the investment environment so that we see far larger flows of capital through the stock market.

One way of achieving this will be to open up markets to the people.

In America, some 80% of the population have shares of their own. For Americans, it's just a normal, everyday thing to do.

In Ukraine, the figure is less than 1%. We clearly have no history or habit of popular capitalism in this country.

It is essential that we develop investment instruments so that ordinary people can see the very real opportunities opening up and begin to invest in business and in the economy.

When the ordinary people has their own portfolio of shares, then the nation's savings will be working to boost the whole economy. People will be investing in their own future, and the future of Ukraine.

Market on the verge of a breakthrough

I mentioned popular shareholding as one of the cornerstones of future business and economic success. The other cornerstones are political stability, a strong and fair legal system and a well-structured and regulated financial market.

We believe the Ukrainian market is on the verge of a breakthrough to maturity.

We invited the Government and the regulatory authorities here to the conference to give us their vision for the future. The Government wants to create more stability for investors and an improved investment climate.

We must have a legal system that protects investors' rights and that is fair and independent of any undue influence – dependent on one thing only and that is justice.

The system must protect the weak just as it protects the strong, so that minority shareholders can have the same confidence as any major shareholder.

We are also looking to the Government to secure greater transparency in the domestic equity market and to thoroughly modernise the regulatory system.

Signs of change: a boom in IPO

Anyone looking for positive signs of change will find them.

Despite the turmoil on some international markets at the start of this year, 2008 looks set for a spectacular leap in the number of companies raising capital through Initial Public Offerings.

So far, just $1 billion has been raised by Ukrainian companies going public on the world's stock markets. Again, that is in stark contrast to Russia, where business understands the advantage of this tool as a means of boosting the country's reserves in order to develop its economy.

Yet all that could be about to change. We think we are about to see an IPO boom in Ukraine.

At least 30 Ukrainian companies publicly declared that they have decided to prepare for an IPO. And it could lead up to $12-15 billion dollars being injected into the Ukrainian economy.

Closing remarks

I started by saying we are hoping to see some happy, long-term and fruitful partnerships being struck up here.

Partnerships of course work best when the parties have strong interests in common.

What unites investors from all over the world and Ukrainian businessmen is the desire for a profitable future.

Warren Buffet had a saying that we may all be able to learn from: "The investor of today does not profit from yesterday's growth."

So 7% growth in Ukraine over the last ten years is great, but even more important is growth tomorrow.

We at Renaissance have been actively creating value in a very dynamic Ukrainian market. We see clearly that there is a national desire to develop.

Ukraine is a country with a future, and we hope you will be a part of that future.

Gregory Gurtovoy, CEO Renaissance Capital Ukraine sees 2008 as "a key point for the Ukrainian market, a year when it starts to change from an opportunity for the few into a market for the many, creating widespread national wealth and benefiting the entire country".