China’s Bohai Commodity Exchange Co., or BOCE, has been cleared to acquire more than 25 percent of Ukraine’s PFTS Stock Exchange, a leading Ukrainian stock exchange and trading system based in Kyiv.
On Dec. 7, Ukraine’s main competition regulators, the Antimonopoly Committee of Ukraine, announced that they had approved BOCE’s request from earlier this year to purchase a large stake in the Ukrainian exchange.
In May 2018, when BOCE first requested that the committee review their bid to acquire a sizeable stake in the PFTS Stock Exchange, the application was returned to BOCE due to “insufficient information disclosure,” as reported at the time by Ukrainian news agency UNIAN.
This time, the committee approved their proposal, freeing BOCE to move ahead and acquire the shares in Ukraine’s leading stock exchange.
In September 2018, it was reported that BOCE representatives were negotiating with another Kyiv-based stock exchange, PJSC Ukrainian Exchange, with a plan to acquire a 36 percent stake in the company.
At the time, Ukrainian Exchange’s Business Development Director, Alexey Sukhorukov, was quoted as saying that his firm was in the process of issuing shares to a new, strategic investor.
At the time of writing, it’s not yet clear if any deal has been struck or if BOCE succeeded in acquiring the stake it wanted.
In June 2017, BOCE purchased the previously state-owned Ukrainian Bank for Reconstruction and Development for UAH 83 million ($2.96 million).
At the time, the CEO of BOCE, Yan Dong Sheng, said that taking over the previously state-managed bank was intended to “help Ukraine carry out effective privatizations” and that BOCE would endeavor to work with the Ukrainian state to better sell the idea of privatizations to the Ukrainian people.
Other observers have said that Chinese interest in acquiring Ukrainian banks and exchanges is driven by a larger commercial interest in the country, where Chinese investment has sky-rocketed in the past year or so.
As previously reported by Kyiv Post, China is on track to replace Russia as Ukraine’s largest, single-nation trading partner by the year 2020, even though many observers warn that Chinese investments can be a double-edged sword with unforeseen, negative consequences.
BOCE, founded in Tianjin province in 2009, is China’s largest spot commodity exchange and reports an annual turnover of $1 trillion. It’s jointly-owned by private investors and several state-owned companies linked to the Chinese Communist Party.
The PFTS Stock Exchange, founded in 1996, is broadly seen as Ukraine’s most important exchange: about 220 companies are listed on the PFTS, which have a total market capitalization of $140 billion.
