There are more investors
The main part of new market participants is natural persons. On average, since the beginning of the year, the number of investors increased by more than 6 thousand every month.
Such dynamics show that Ukrainians, even during the war, are increasingly actively looking for ways to save and multiply their own funds through financial instruments.
At the same time, the increase in the number of investors does not yet mean the formation of significant domestic capital. The next task for the market should be the transition from short-term interest to long-term investing.
What Personal Investment Accounts Can Change
One of the proposed tools for this is personal investment accounts (PIA). The corresponding draft laws No. 15314 and No. 15314-1 have already been registered in the Verkhovna Rada.
The idea is to make investing more accessible to citizens and at the same time encourage them to keep funds in the market for a long period of time.
Through OIR, it is planned to allow investment, in particular, in:
Tax relief for long-term investments
The main bill provides tax advantage for those who will not withdraw funds from the account for at least three years.
Under such a scenario, investment income is proposed to be exempt from taxation. If the investor decides to withdraw the money earlier, the general rules of taxation will apply.
Alternative draft law No. 15314-1 offers another mechanism — reduce the personal income tax rate for certain types of investment income from 18% to 5%.
Thus, the final model of OIR has not yet been determined.
Why is it important for the economy?
The massive attraction of private funds to the domestic market can become an important source of financing for the Ukrainian economy.
This is an opportunity for citizens to systematically form own capital, for business — to obtain additional internal resources, and for the state — to gradually reduce dependence on external financing.
This can be especially important for the future reconstruction of Ukraine, when the economy will need significant amounts of long-term capital.
There are already investors — now we need money for the long term
271.3 thousand investors is an already formed base of potential domestic demand. However, the main question now is not only how many people are ready to invest, but also how whether they will leave their funds in the market for years.
At the same time, the state continues to attract funds through OVDP. At the August 11 auction, the Ministry of Finance halved the supply of one-year and 1.7-year military bonds — to UAH 1 billion for each issue.
This happened after the increase of the NBU discount rate to 15.5% per annum, which also affects the cost of government borrowing.
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