Expert advises caution on investing in Ukraine

Ukraine’s bid to join the World Trade Organisation (WTO) was approved last week by the organisation’s general council, clearing the final obstacle to its accession. The decision was enthusiastically greeted by Viktor Yushchenko, the Ukrainian president, who saw the panel’s decision as a “colossal positive signal” for the Ukrainian economy.

Edward Conroy, assistant investment manager of Aberdeen Asset Management’s Global Emerging Market team, says despite the move investors should be cautious about investing in the country.

“Ukraine has seen more drastic political reforms than Russia has,” says Conroy. “Corporate governance, however, is a long way behind the UK.”

Another worry for Conroy is that Russia can put political and economic pressure on Ukraine by turning off the natural resources “tap”.