STOCK MARKET IN UKRAINE: PROBLEMS AND PROSPECTS OF DEVELOPMENT

Abstract

The article is devoted to the study of the problems of the stock market in Ukraine. It is noted that economic, political, and financial shocks, protracted crisis phenomena, and the ongoing war have led the domestic stock market into a depressed state, with the exception of one segment — trading in government securities (domestic government loan bonds, or OVDP).
An analysis of the functioning of the exchange and over-the-counter segments of the stock market, along with a comparison of trading volumes, revealed a preference for transactions on the over-the-counter market. The share of the over-the-counter market in total trading volumes exceeds that of the exchange market by almost two times, indicating a lack of transparency in Ukraine’s stock market.
The low capitalization of the domestic stock market during the war, particularly in 2022–2023, is attributed to the decline in the issuance of securities, especially shares, and a significant reduction in trading across all types of financial instruments on the exchange segment. According to international classifications, experts note that the domestic stock market is underdeveloped, as it fails to meet the minimum criteria for size and liquidity and is associated with significant risks for foreign investors. The primary issue is the extremely low level of liquidity in Ukraine’s capital market compared to other countries.
Among the key problems of the domestic stock market is the declining number of all types of professional market participants, which stems from imperfect regulatory oversight and a limited demand for securities from the general population. However, individuals have begun actively investing in state war bonds during the conflict.
For the development of Ukraine’s stock market, it is essential to strengthen the economy as a whole, create favorable conditions for attracting foreign investors, and expand the range of financial instruments.