Wednesday, June 25, 2014

Spotlight On: Kassandra Luciuk

This is the first in a fresh series of "Spotlight On" profiles that aims to share the exciting work and efforts of young Ukrainian-Canadian leaders today, and how their work is shaping the future of our community. From the arts to academia, there are many exciting conversations and events happening around us that should be celebrated and promoted. There is much to be learned from their fresh perspectives on our community, and we ask that you please take a moment to support their efforts by spreading their messages, sharing events and info, and perhaps getting involved yourself!

Last week I had the opportunity to sit down and chat with Kassandra Luciuk, recipient of the 2014 UCU Board Chair's Scholarship to hear about what she's up to and learned about the Ukrainian Jewish Encounter - a very interesting conversation that's come to surface within the turmoil in Ukraine.

Tynia Soltys: Hi Kassandra! How's it going!

Kassandra Luciuk: Hi! I’m doing great! How about you?

TS: I firstly wanted to congratulate you on your UCU Board Chair's Scholarship - it is very exciting for us to see young community members involved in such an interesting array of projects and causes.

KL: Thank you! It was unexpected but much appreciated. I’m not sure if people realize how far a scholarship like this can go for a graduate student. I was actually able to travel to Winnipeg and Edmonton for research and got to spend some really productive time in the archives. I honestly could not have done that without Ukrainian Credit Union Limited and so I’m extremely grateful.

TS: So tell me a bit about yourself! How do you stay involved in the community?

KL: Well, my parents are both really involved in the organized Ukrainian community, which inspired me from an early age. My greatest passion is Ukrainian dancing – I’ve been dancing for twenty years – and being able to pass that on to others is really important to me. Since moving to Kingston in 2008 to start university I’ve been a dance instructor with Maky Ukrainian Dance Ensemble. During my time in Kingston I also served as the President of the Queen’s University Ukrainian Students Club. Since starting graduate school I’ve tried to pick projects that highlight my academic interests and serve as practical, “hands-on” outlets for that. For the last year I’ve served as the Youth Liaison for the Ukrainian Jewish Encounter Initiative.

TS: By the way, what are you studying?

KL: I’m a PhD Candidate in the Department of History at the University of Toronto. My thesis looks at the politics of citizenship and identity in postwar Cold War Canada with an emphasis on the Ukrainian experience. But, when my friends ask, I like to joke that I’m studying their babas and didos.

TS: Why did you decide to go on and do a PhD in Ukrainian Canadian history?

KL: Well, first of all, I’m a big advocate of doing what you love. If the work you do doesn’t enliven you then I don’t see the point. So, I think the simple answer is that I couldn’t see myself doing anything else. But, also, there were just a lot of unanswered questions for me when it came to my own community and it was important for me to have those answers.

TS: You mentioned you are involved with the Ukrainian Jewish Encounter. Can you tell me more about the organization and what interested you in working with them? 

Tuesday, June 24, 2014

CALL TO ACTION: Write to your MP and ensure Canada supports Ukraine!
Photo from
As Canadian citizens we should all be very proud of how our nation has supported Ukraine thus far in its battle for basic freedoms of democracy and rule of law.

While Canada has done a lot already, as attentions are diverted to other world events, the situation in Ukraine is getting increasingly dangerous and precarious and additional action needs to be taken.

To make that happen, your help is paramount.

In short, the Ukrainian Canadian Congress asks that you take a bit of time to write to your MPs and remind them of the importance and commitment our nation has made to help see Ukraine through its most dramatic restructuring and period of change since independence.

Please read the following letter template from UCC and send it to your MPs, or write your own:

See below a summary of the letter:

Re: Urgent Support for Ukraine

The Ukrainian Canadian community is grateful for Canada’s unwavering support for the people of Ukraine. .... We appreciate Canada’s unwavering support for Ukraine in its continued democratic development, and its recognition and support for the new government in Ukraine.

Today, Ukraine needs Canada’s help more than ever...

The government of Ukraine asked NATO and its Western allies in late March for military assistance.... Unfortunately, very little military aid has been provided.

In this context, we call upon the Government of Canada to:

1. Work with her NATO allies to provide critical military assistance (force equalization equipment, communications technology and training) to Ukraine as it faces serious military aggression funded and carried out by Kremlin-backed saboteurs and terrorists as Russia’s aggression continues to escalate;

2. Provide lifesaving equipment including anti-terrorist equipment, medical field kits and body armor to Ukraine’s armed forces;

3. Sanctions – impose wide sectoral sanctions against the Russian Federation’s energy, defense, and financial services sectors;

4. Expedite humanitarian and technical assistance projects to assist in Ukraine’s continued reform and democratic development;

5. Advance trade and visa liberalization with Ukraine.

Thank you ....

Please act urgently as the number of casualties continues to mount daily.
Yours very truly,

Paul M. Grod
National President
Ukrainian Canadian Congress

Friday, June 20, 2014

Корпоративні облігації

by Michael Zienchuk
(Originally published in Meest newspaper, June 19, 2014)

Ми продовжуємо розмовляти про боргові зобов'язання або облігації, які представляють собою цінні папери, що можуть забезпечити менший ризик для інвесторів. У попередній статті ми писали про державні боргові зобов'язання, які зазвичай вважаються найменш ризикованими у цьому класі активів. Зараз звернемо увагу на корпоративні облігації, які мають широкий діапазон якості, відповідно до кредитоспроможності емітента. У цій статті ми зосередимося на найбільш кредитоспроможних корпоративних облігаціях та інвестиційних можливостях, які вони представляють.

Головний інструмент, який ринок використовує для визначення кредитоспроможності боргових зобов'язань, є кредитний рейтинг корпоративного емітента, з деякими корегуваннями для окремого боргового зобов'язання. Кредитні рейтинги видаються незалежними рейтинговими агентствами. Ключовим фактором, що визначає кредитний рейтинг емітента облігації, є його здатність своєчасно здійснювати купонні виплати та погашати основну суму облігації. Існують чотири основні кредитні агентства, які оцінюють усі облігації, що обертаються на ринку. До них відноситься «велика трійка» рейтингових агентств - Moody’s, Standard and Poor’s (S&P) і Fitch Ratings, а також канадське агентство Dominion Bond Rating Service (DBRS).

Рейтинги, які агентства призначють корпоративним емітентам та індивідуальним облігаціям, мають літерні позначення, від потрійного A (AAA або Aaa) для найвищої якості до одного D, який представляє собою емітента або облігацію, що знаходиться в стані дефолту (не в змозі зробити купонні виплати або погасити основну суму непогашеної заборгованості). Кредитно-рейтингові агентства також додають + або - (мінус) до відповідної літери для більшої точності. Облігації з кредитним рейтингом BBB- і вище вважаються такими, що мають інвестиційний рівень, а ті, що припадають між BB+ і C, вважаються тими, що не мають інвестиційного рівня, або високоприбутковими облігаціями (сміттєвими облігаціями в популярному жаргоні).

Thursday, June 19, 2014

Stop the Bleeding in Ukraine

Ukrainian Canadian Congress is launching a series of mini-campaigns to target fundraising for certain specific needs in Ukraine. The first one is called Stop the Bleeding in Ukraine. The goal is to raise money for blood clotting medication that is desperately needed in Ukraine.

The goal of each mini-campaign will be to raise a minimum of $10,000, more depending on the generosity of the donors, to address some of the most pressing needs in Ukraine. While we here in Canada cannot solve the acts of terrorism sponsored by Putin that are currently besetting Ukraine, we can help in small but very important ways to make life a bit better for those who are suffering from the chaos that Putin has cynically unleashed on a country that has until this point lived in peace and quiet.

You can read more here: Stop the Bleeding in Ukraine

Wednesday, June 18, 2014

The Risks of Investing in Putin's Russia

Today an action was held outside the Ritz Carlton where senior officials for the Government of the City of Moscow were trying to convince Canadian companies to invest in Putin's Russia (you can see more about the protest here: No Business with Moscow! No Support for Terrorism. You can also see some pictures of the demonstration on our FB page in the album titled "Say No to Putin".

The point of the action was to educate Canadian business people on why doing business with Putin's Russia is not a good idea. Below is the text of the informational flyer they were distributing:


Today, senior officials of the Government of the City of Moscow are trying to convince you to invest in various business projects in the capital of Russia. While there may be some attractive opportunities, any investor should weigh the risks related to such ventures. Here are our seven questions to you:

1) Russia is a country with rampant corruption. It ranked 127 among 175 countries by Transparency International Corruption Perception Index in 2013, behind such countries as Belarus, Niger and Sierra Leone. Is there a risk of violating your country’s anti-corruption laws?

2) Working on a possible investment in Russia, remember that you will have to play with an open deck of cards. Your counterparts or your local competitors will be able to pay for most sophisticated surveillance and wire-tapping. The information asymmetry between the buyer and the seller is often extreme in Russia. Do you know how to play this game?

3) As a minority investor, you have no chance of controlling anything in Russia. In late 2013, Rosneft bought out the remaining minority shareholders of BP-TNK at 44% discount to the price that Rosneft paid to oligarch holders of large share blocks. Do you know what your investment is really worth, when it comes to liquidation?

4) Justice in Russia is very different from what you are used to. In 2009, Sergei Magnitsky, an accountant and a lawyer who served foreign investors, was jailed without a trial for almost a year and died in prison because he was denied medical care he needed. It’s impossible to do due diligence without visiting the country regularly and having agents there on a permanent basis. Are you willing to risk your life or the lives of your agents?

Crisis in Ukraine - June 18 Briefing from UCC

Crisis in Ukraine: Daily Briefing 
18 June, 2014, 8PM Kyiv time

1. Kremlin-backed violence in Eastern Ukraine
The active phase of the anti-terrorist operation (ATO) in Donetsk and Luhansk continues. ATO press representative V. Seleznyov stated that ATO forces continue to contract the ring around areas controlled by Kremlin-backed armed extremists, and that in Shchastya, Luhansk oblast, some 30 Kremlin-backed armed extremists were killed in a battle that lasted several hours. The State Border Service of Ukraine reports that on 17 June the situation at the border was “characterized by fighting to renew the defense of the state border and the destruction of terrorists in controlled regions of Luhansk and Donetsk oblasts." Several media sources quoted the representative of the so-called "Minister of Defense" of the "Donetsk People's Republic" complaining about a catastrophic lack of "recruits" for Kremlin-backed extremist forces. The State Security Service of Ukraine (SBU) reports that 2 of the Kremlin-backed armed extremists who were detained near Dyakovo, Luhansk oblast on 14 June, stated during interrogation that they(ie. Kremlin backed armed extremists) were recruited to participate in the armed conflict by leaders of the local branch of the Communist Party of Ukraine, and that representatives of the Communist Party who also organized the supply of small arms to the extremists.

2. President of Ukraine’s plan for peace

Corporate Bonds

by Michаеl Zienchuk

We are continuing our focus on debentures or bonds, as they are securities which may provide less risk for investors. In the previous article we wrote about government debentures which are generally considered the least risky in this asset class. We turn our focus to corporate bonds, which come in a wide range with respect to quality – based on the creditworthiness of the issuer. Here we focus on the most creditworthy corporate bonds and the kinds of investment opportunities they present.

The main gauge, which the market uses to identify creditworthiness of a debenture, is the credit rating of the corporate issuer, with some adjustments for the individual debenture in question. This credit rating is issued by an independent third party credit rating agency. The key factor in determining the credit rating of the issuer of the bond is their ability to make timely coupon payments on the notes, and to repay the principal outstanding of the note. There are four main credit agencies which rate all bonds issued to the market. These include the "Big Three" credit rating agencies – Moody’s, Standard and Poor’s (S&P) and Fitch Ratings, as well as the Canadian credit rating agency, Dominion Bond Rating Service (DBRS).

Bond rating agencies assign corporate issuers and individual bonds with ratings based on letter designations, from triple A (AAA or Aaa) for the highest quality to single D (D) representing an issuer or note that is in default (either unable to make coupon payments or repay the principal outstanding). Credit rating agencies also assign + or – (minus) to a letter level for greater precision. Bonds with a credit rating of BBB- and higher are considered to be investment grade, while those between BB+ and C are considered non-investment grade, or high yield bonds (junk bonds in popular jargon).

Table 1: Bond ratings by Credit Rating Agencies
Lowest Risk
Low Risk
Low Risk
Medium Risk
Ba, B
High Yield
High Risk
High Yield
Highest Risk
High Yield
In Default
Source: RBC

Tuesday, June 17, 2014

Crisis In Ukraine - June 17 Briefing from UCC

Crisis in Ukraine: Daily Briefing 
17 June, 2014, 6PM Kyiv time

1. Kremlin-backed violence in Eastern Ukraine
The active phase of the anti-terrorist operation (ATO) in Donetsk and Luhansk continues. At 2 PM Kyiv time, the Ministry of Defense reported that in Slovyansk, Donestk oblast, Kremlin-backed armed extremists are purposefully burning residential and administrative buildings. In eastern Luhansk oblast, ATO forces reportedly killed 30 Kremlin-backed armed extremists; one Ukrainian soldier was injured. The Ministry of Defense reports that the most tense situation is in Slovyansk and Stanychno-Luhanske, where Kremlin-backed armed extremists are reinforcing roadblocks and defensive positions. “With the help of foreign experts they are installing radio-controlled explosive devices.” ATO forces continue to detain citizens of the Russian Federation who are taking part in the fighting; the State Security Service of Ukraine (SBU) reports that on 15 June a citizen of the Russian Federation was detained in Slovyansk after firing on a Ukrainian armed forces checkpoint; during interrogation he stated that a representative of the so-called Donetsk “Peoples’ Republic” offered him $1000 for killing Ukrainian soldiers. According to unconfirmed reports, the National Guard of Ukraine has broken through the defenses of Kremlin-backed extremist forces in Luhansk; there are unconfirmed reports that the Kremlin-backed extremists are using artillery. The State Border Service of Ukraine reports that from 2:00 am to 2:40 am Kyiv time, a camp of border guards and Ukrainian armed forces near Oleksyivka, Donetsk oblast, were fired upon by 8 mortars. 31 armed forces personnel and border guards were injured. A spokesman for the National Security and Defense Council V. Chepoviy stated that "Terrorists are getting the coordinates of deployment sites of Ukrainian security forces from a Russian satellite."

2. Parliament passes resolution on Ukrainian-Russian border

Monday, June 16, 2014

Фінансовий Коментар - Кінець Великої Ротації?

Кінець Великої Ротації?

Волатильність на американському ринку акцій у березні-квітні спричинила численні розмови серед аналітиків про традиційне явище “продай у травні і гуляй”. Протягом цього періоду, акції технологічних та невеликих компаній постраждали найбільше: високотехнологічний індекс Nasdaq Composite втратив більше 8%, тоді як індекс акцій малої капіталізації Russell 2000 впав більш ніж на 9%. Здавалося, що наступає справжня корекція ринку.

Під час розпродажу акцій малих і технологічних компаній гроші перекидалися у фонди та індексні фонди облігацій. Це явище було названо Великою Ротацією з акцій в облігації. Згідно компанії Lipper Inc і дослідницької фірми ETFGI (за даними Financial Post), інвестори цього року вклали $ 22 млрд. у ETF-фонди облігацій, або більш ніж 5% від загального обсягу їх активів. Високий попит на облігації спричинив їх дефіцит, і інвестори все частіше купували облігації більш низької якості (так звані "високоприбуткові облігації"). За останні 12 місяців фонд SPDR Barclays Short-term High Yield Bond ETF отримав $ 2,7 млрд. чистого припливу або 64% від загального обсягу своїх активів.

Водночас, корекція американських акцій на даний момент майже повністю завершилася: Nasdaq Composite та Russell 2000 вже досягли або знаходяться близько своїх рівнів початку березня. Корекція також не перекинулася на більш широкий ринкок: індекс S&P 500 зараз б’є свої історичні рекорди. Ми очікуємо, що ближче майбутнє покаже, чи інвестиційні потоки знову повернулися в сектор акцій і чи Велика Ротація стала справою минулого.

Українська Кредитова Спілка Лимитед

Financial Comment - Sell in May and Go Away?

Is the Great Rotation Over?

The volatility of the March-April period led many analysts and pundits to believe that the American equity market was setting up for the traditional “sell in May and go away” phenomenon. During this period, the technology and small cap sectors were most visibly impacted by this volatility, as the NASDAQ Composite index fell by 8%, and the small cap Russell 200 index fell by over 9%. This seemed to portend the start of a proper equity market correction.

As technology and small-cap stocks were falling in value, capital was flowing into bond funds and bond exchange traded funds (ETFs). There appeared to be a Great Rotation in the works (out of equities and into bonds). According to Lipper Inc and research firm ETFGI, investors made net deposits of $22 billion in ETF bond funds year-to-date, representing more than 5% of total bond ETF assets. Strong demand for bonds made them scarce and investors, ever searching for higher yields, increased their appetite for lower-quality government and corporate (so-called “high-yield”) bonds. Over the past 12 months, the SPDR Barclays Short-term High Yield Bond ETF has received $2.7 billion in net inflows or 64% of its total assets.

At the same time, the anticipated correction in U.S. equity markets appears to be over, as the NASDAQ Composite and Russell 2000 indices are at or near their early-March highs. The heightened volatility in these benchmark indices did not spill over to the broader S&P 500 index, which is making new historic highs. We expect that the near future will show whether the investment flows have reverted back to equities and the “Great Rotation” has been halted.

By: Ukrainian Credit Union Limited

Friday, June 13, 2014

Державні Облігації

Михайло Зінчук, Manager, Wealth Strategies Group

У періоди підвищеної волатильності на фондових ринках багато інвесторів звертаються до облігацій (bonds) чи боргових зобов'язань (debentures), особливо державних облігацій, задля підвищення безпеки інвестицій. Перш за все, давайте розглянемо деякі основні відомості про облігації і державні облігації зокрема. Облігація є борговим цінним папером, емітент котрого (позичальник) зобов'язується повернути кошти, надані йому тримачами облігації (кредиторами). Більшість облігацій мають відсоток (купон) і всі облігації повинні бути погашені в повному обсязі на дату погашення. Купон зазвичай виплачується через фіксовані проміжки часу (щомісяця, раз на півроку або раз на рік). Більшість облігацій торгуються на фінансових ринках.
Один з основних факторів, які впливають на прибутковість облігації, є її кредитний ризик (ризик емітента або позичальника). Державні облігації, як правило, вважаються найменш ризикованими. У деяких випадках державні облігації вважаються безризиковими, тому що уряди мають можливість друкувати гроші або підвищувати податки, щоб забезпечити виплату зобов'язань, в тому числі за облігаціями. Незважаючи на це, історія знає багато прикладів, коли уряди об’являли дефолт за своїми облігаціями. Державні облігації можуть бути деноміновані у власній валюті країни (у цьому випадку вони продаються всередині країни) і в інших валютах (продаються закордоном). Державні облігації, які випускаються в іноземній валюті, називаються зовнішніми облігаціями, Єврооблігаціями або суверенними облігаціями.

Government Bonds

by Michael Zienchuk
Manager, Wealth Strategies Group
During periods of heightened volatility in equity markets many investors turn to bonds or debentures, especially government bonds, for safety. First of all, let’s consider some basic information about bonds and government bonds in particular. A bond is a debt security whose issuer (the borrower) agrees to repay the money given to them by the holders (the lenders) of the bond. Most bonds bear interest (the coupon) and all bonds need to be repaid in full at a maturity date. The coupon is usually paid at fixed intervals (monthly, semiannual or annual). Most bonds are traded on financial markets.
One major component impacting the yield of a bond is its credit risk (issuer or borrower risk). Government bonds are generally considered the least risky. In some cases, government bonds are considered risk-free because governments have the ability to print money or raise taxes to provide the capital to redeem their outstanding obligations, including their outstanding bonds. That being said, historically various governments have defaulted on their bonds. Government bonds can be denominated in the country's own currency (in which case they are sold internally) and in other currencies (sold abroad). Those government bonds, which are issued in foreign currencies, are called external bonds, Eurobonds or sovereign bonds.
When Canadians hear about government bonds, Canada Savings Bonds (CSBs) often spring to mind. CSBs are investment instruments offered by the Government of Canada to the public in October-December of every year. At the same time, CSBs are not really bonds, they are debentures. The difference between bonds and debentures is that while bonds are secured by specific assets, debentures are unsecured. Nevertheless, CSBs are cashable at any time and have a guaranteed minimum interest rate. In April 2014, CSBs offered up to 1.40% in annual interest payments.
Canadian federal government debentures or benchmark bonds include bonds which have 2-30 years to maturity (maturing between 2016 and 2045). These bonds are available at auctions to institutional investors who act as market makers. Depending on maturity date, government bond yields are currently in the range 1.00%-3.00% (see the table).
Canadian government and quasi-government bond yields
Yield, %
Federal Government

Can. Govt 2 Year
Can. Govt 5 Year
Can. Govt 10 Year
Can. Govt 20 Year
Can. Govt 30 Year

Ontario Prov
Ontario Prov
Fin Quebec
Ontario Prov
New Brunswick
Agency, municipal

Ontario Electr Fin Corp
Ontario Hydro
NS Power

Canadian provincial bonds with comparable maturity dates are trading at lower prices or have higher coupons, and hence have higher yields than federal ones, in the range of 1.4%-3.9%. This is explained by the fact that the federal government is generally considered more creditworthy because it has more economic and financial levers to use in meeting its obligations.
Down the food chain, provincial agency and municipal bonds usually have somewhat higher yields. Some agency and municipal bonds may sometimes trade at lower yields than provincial and even federal government bonds because bond yields reflect the level of re-payability which the market assigns to a particular borrower and their outstanding obligations.
Michael Zienchuk, MBA, CIM
Investment Advisor, Credential Securities Inc.
Manager, Wealth Strategies Group
Ukrainian Credit Union
416-763-5575 x204

Mutual funds and other securities are offered through Credential Securities Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual funds and other securities are not insured nor guaranteed, their values change frequently, and past performance may not be repeated. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This article is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell any mutual funds and other securities. The views expressed are those of the author and not necessarily those of Credential Securities Inc.®.  Credential is a registered mark owned by Credential Financial Inc. and is used under licence. Credential Securities Inc. is a Member of the Canadian Investor Protection Fund.

Thursday, June 12, 2014

Crisis in Ukraine - June 12 Briefing from UCC

Crisis in Ukraine: Daily Briefing
12 June, 2014, 7PM Kyiv time

1. Kremlin-backed violence in Eastern Ukraine
The active phase of the anti-terrorist operation (ATO) in Donetsk and Luhansk continues. The Minister of Internal Affairs, A. Avakov, stated that a column of military materiel (armored personnel carriers, artillery instruments) have moved through from the Russian Federation through border points seized by armed Kremlin-backed extremists, towards Snizhne, Donetsk oblast and moved towards Horlivka, where they were attacked by Ukrainian armed forces. The column of Kremlin-backed extremists includes three tanks. As of 5 pm Kyiv time the battle is ongoing, a part of the column has been destroyed, and according to the website of Ukraine's president, the situation has been brought under control. Ukrainian President P. Poroshenko held an emergency meeting with the heads of the security agencies; the Ukrainian military has regained control of more than 100 km of the border. The self-proclaimed "mayor" of Mariupol, O. Fomenko, was detained by National Guard forces, along with two "activists" of the self-proclaimed Donetsk "Peoples' Republic." According to reports, a conflict amongst the Kremlin-backed extremists in Lysychansk, Luhansk oblast, has occurred, and another "Peoples' Republic" has been proclaimed in that city. There are now two self-proclaimed "Peoples' Republics" in the oblast. Battles between ATO forces and armed Kremlin-backed extremists continue in and around Slovyansk, Donetsk oblast. The State Security Service (SBU) of Ukraine states that the Anti-terrorism Centre at the SBU is continuing preparations for the establishment of a corridor through which civilians can leave the region in which the ATO is being carried out.

2. Donetsk oblast State Administration: "DNR" trying to forcibly take children to Russia