Ukrainian Stock Market Research Articles

REACTION AND ADAPTATION OF THE STOCK MARKETS TO THE FULL-SCALE INVASION OF UKRAINE

This article investigates the reaction and adaptation of stock markets in response to the Full-Scale Invasion of Ukraine in February 2022. It examines the immediate effects on the Ukrainian stock market, highlighting the significant decline in trading volumes and stock prices due to geopolitical uncertainty. The study analyzes the behavior of major indices, including the PFTS and S&P 500, and explores investor sentiment during this crisis. Notably, while the S&P 500 experienced an initial drop, it rebounded as investors perceived a buying opportunity, reflecting resilience in more diversified markets. In contrast, the Ukrainian market faced severe disruptions, prompting regulatory responses and measures to restore confidence. The paper also considers gold’s reaction as a safe-haven asset, emphasizing its role in mitigating risks amid heightened geopolitical tensions. The findings underline the complexities of market dynamics during crises and the varying impacts on domestic and international investors.

Reform of Stock Market Activity in Ukraine

The article examines in detail measures to improve stock market activity in Ukraine, their prerequisites, and consequences. Currently, exchange trading takes place exclusively in the electronic system. The activities of the exchanges are aimed at administering the electronic trading system to ensure its functioning. The mechanisms for carrying out exchange trades have been unified, and the procedure for conducting trades, accreditation, monitoring the execution of contracts, and sanctioning violators has been improved, making it impossible to engage in shadow deals or hide sums to avoid taxes. The exchange acts as a guarantor of the execution of transactions. These measures should contribute to the transparency and formalization of economic transactions, increasing their reliability. Additionally, these improvements are expected to enhance investor confidence, attracting both domestic and international investments. By reducing the opportunities for fraudulent activities and tax evasion, the Ukrainian stock market can achieve greater stability and credibility. Furthermore, the standardization and modernization of trading procedures can streamline operations, making the market more efficient and accessible. This, in turn, could lead to increased market participation and liquidity, fostering a more vibrant and dynamic financial environment. Overall, these reforms are crucial for the sustainable development of Ukraine's stock market and its integration into the global financial system.

РОЗВИТОК ТА ІНСТИТУЦІЙНІ ТРАНСФОРМАЦІЇ ФОНДОВОГО РИНКУ УКРАЇНИ

The article examines the development and institutional transformations of the Ukrainian stock market. It has been confirmed that in Ukraine there is a pronounced bank-centric nature of the financial system by comparing indicators of the ratio of capitalization of listed companies and bank loans to Ukraine's GDP. It was determined that the Ukrainian stock market during the research period is constantly developing and transforming and attracts the attention of both domestic and foreign investors. Ukraine follows international standards in the field of exchange activity and works to improve the regulatory framework for market development. The most important institutional transformations in the domestic stock market under the influence of legislative changes are characterized. Separate quantitative aspects of the development of the domestic stock market for 2012-2022 were analyzed. It was noted that the transformations of the stock market were characterized not only by changes in the quantitative indicators of the development of the securities market of Ukraine, but also had a significant impact on the institutional, regulatory, intermediary, technical and information infrastructure of the domestic stock market. The most important directions of the transformation of the stock market of Ukraine, in particular of an institutional and digital nature, are substantiated. The key aspects of the transformation of the stock market related to digitalization processes are highlighted: electronic trading is a tool that allows you to trade securities online directly through electronic trading platforms; increasing transparency promotes quick and effective dissemination of information about companies, their financial condition and development prospects; the growing role of robot-advisors who can provide investment advice, analyze markets and predict risks; increasing the availability of services for small investors through digital platforms; changes in the structure of the market due to digital technologies lead to changes in the structure of the stock market, in particular, to an increase in the role of alternative trading platforms and a decrease in the importance of traditional exchanges. In the institutional environment, increased requirements for companies wishing to go through the listing procedure on the stock exchanges contributed to the exit of inefficient and fictitious issuers, ensuring a higher level of investor confidence in the market. However, we note that this has also led to a narrowing of the number of companies willing and able to meet these requirements, which may limit investment opportunities in the market.

Transformation of the Ukrainian Stock Market: A Data Properties View

This paper investigates the evolution of the Ukrainian stock market through an analysis of various data properties, including persistence, volatility, normality, and resistance to anomalies for the case of daily returns from the PFTS stock index spanning 1995–2022. Segmented into sub-periods, it aims to test the hypothesis that the market’s efficiency has increased over time. To do this different statistical techniques and methods are used, including R/S analysis, ANOVA analysis, regression analysis with dummy variables, t-tests, and others. The findings present a mixed picture: while volatility and persistence demonstrate a general decreasing trend, indicating a potential shift towards a more efficient market, normality tests reveal no discernible differences between analyzed periods. Similarly, the analysis of anomalies shows no specific trends in the market’s resilience to the day-of-the-week effect. Overall, the results suggest a lack of systematic changes in data properties in the Ukrainian stock market over time, possibly due to the country’s volatile conditions, including two revolutions, economic crises, the annexation of territories, and a Russian invasion leading to the largest war in Europe since WWII. The limited impact of reforms and changes justifies the need for continued market reform and evolution post-war.

THE IMPACT OF THE BANKING SYSTEM LIQUIDITY ON THE VOLUME OF LENDING AND INVESTMENT IN GOVERNMENT SECURITIES DURING THE WAR

In the context of escalating military and political uncertainties, a crucial component of banking system stability is the establishment of an adequate level of resource provision – liquidity. The research aims to analyze the transmission impact of the banking system's liquidity and its structure on the volumes of financing for the real sector of the economy in the second year of the war in Ukraine. In the conditions of war and the corresponding intensification of military-political threats and uncertainties, the regulator has made numerous complex decisions and restrictions aimed at balancing the challenges with the current situation in financial markets.The research found that the banking sector of Ukraine currently accumulates a significant amount of excess liquidity and demonstrates high profitability. However, in the conditions of war, the transmission mechanism works improperly, requiring constant intervention from the regulator to balance the liquidity of the banking sector and state finances, which, in turn, affects the behavior of commercial banks and changes the structure of their asset portfolios. An analysis of the structure of active operations portfolios of the banking, corporate, and private sectors provides grounds to assert that there is no reason to expect a change in investment behavior from these groups in the perspective of the next year due to the specificity of the conditions imposed by the Ministry of Finance and the regulator. To maintain macroeconomic stability in the national economy in the conditions of martial law it is necessary to introduce conditions to reduce demand for foreign currency and, as an alternative, offer the preservation of savings solvency through simplifying access to investments in government securities for households. The low financial literacy of the population and the underdeveloped stock market in Ukraine, as well as the more complex mechanism of purchasing government bonds or military bonds compared to deposit services, make such investments by the population insignificant and limited in demand.

Foreign securities: Issues and prospects for the Ukrainian stock market

The analysis of the current state and identification of problems of foreign investment in Ukraine are related to various factors and aspects, including the instability of the economic environment, insufficient development of the legal framework, etc. Therefore, the study aims to analyse the circulation/use of securities and identify problems and opportunities for the development of the Ukrainian stock market. To achieve this goal, various scientific methods were used, including synthesis and analysis, formal legal and other methods. It is established that due to the implemented reforms aimed at modernisation, the financial market of Ukraine is open to investors and has expanded opportunities compared to the past. It is noted that the war initiated by Russia has led to a significant increase in the investment gap between Ukraine and other countries. It is emphasised that new measures are needed that have the potential to contribute to economic recovery in the future and strengthen its resilience to possible economic shocks. To ensure the efficiency of the investment process, it is proposed to use the most appropriate and effective strategies that should be included in the provisions of the Resolution of the Cabinet of Ministers of Ukraine “On Approval of the State Strategy for Regional Development for 2021-2027”. The author proposes an integrated mechanism for attracting foreign investment, which provides for the establishment of a favourable investment climate and intensification of investment activity. Recommendations that can be used to improve legislation on attracting foreign investment in securities have been formulated and substantiated. These proposals may be useful for the practical activities of state authorities aimed at supporting foreign investment in securities in the current stock market of Ukraine

THE PROBLEMS OF THE FUNCTIONING OF THE STOCK MARKET OF UKRAINE UNDER THE CONDITIONS OF WAR STATE

Introduction. The stock market is a multifunctional system that contributes to: accumulation of capital for investment in the production and social spheres; structural reorganization of the economy; positive dynamics of the social structure of society; improving the welfare of citizens, due to the ownership and free disposal of securities. The Russian Federation's full-scale war with Ukraine, which has lasted for more than a year and a half, has brought Ukraine large-scale financial and economic instability, which is manifested in the deterioration of the socio-economic condition and the deterioration of the state of the financial system, regarding its performance of its functions. The purpose of the article is to understand the processes of development and analysis the main trends of the current state and to identify the problems of the functioning of the stock market of Ukraine under martial. The results. The main ways of attracting funds on the stock market are: 1) covering the shortage of money for financing activities; 2) restarting and modernization of existing capacities; 3) replenishment of working capital, restructuring of indebtedness; 4) development of core activities and maintenance of production level; 5) development of innovative projects and diversification of activities; 6) creation of an enterprise, subsidiary companies and structural units; 7) development of financial infrastructure; 8) formation of exchange history. During the studied period, the stock market in Ukraine consisted only of DGB, the rest of the instruments were small deals that did not have a significant impact on liquidity. In order to restore Ukraine in the post-war period, business development requires the involvement of additional sources of financing. Therefore, planning and preparing new financing mechanisms today will increase the chances of success on the stock market. Among the main problems that have arisen acutely on the way to the recovery and development of the stock market are: insufficient legislative regulation; low liquidity (in the event of a crisis situation on the stock market, as well as when investors wish to sell their own securities, the market is unable to fully absorb the volume being sold, as a result, sellers significantly reduce prices and the market falls; lack of new financial instruments (a low share of shares the stock market of Ukraine in the pre-war period and the dominance of bonds in the conditions of military aggression). Conclusions. The main priorities for the development of the Ukrainian stock market are: - the creation of an appropriate legal framework that will regulate the rights and obligations of all participants in the stock market and ensure the creation of an appropriate system for the protection the rights of investors and securities owners; - integration of the domestic stock market into international financial markets; - the development of the stock market infrastructure and the development of a wide range of tools, the availability of effective mechanisms for the interaction market participants; - formation of a new infrastructure of the stock market (a new model) that meets the norms of the international market; development of financial market segments (banking, insurance, pension sector, etc.); - increasing the investment literacy of the population.

ЗАХИСТ ІНВЕСТОРІВ ЯК КЛЮЧОВА ПЕРЕДУМОВА МОБІЛІЗАЦІЇ КАПІТАЛУ ДЛЯ ПІСЛЯВОЄННОГО ВІДНОВЛЕННЯ УКРАЇНИ

The article investigates the problems of protecting the rights and interests of individual investors in the Ukrainian stock market, which have become especially urgent in the context of russia's full-scale military aggression. The study aims to identify the key problems of the Ukrainian stock market, particularly in the context of protecting the interests of individual investors, as a necessary prerequisite for the effective mobilization of capital for the post-war reconstruction of the Ukrainian economy. The research methodology combines general scientific and special approaches. The key challenges identified in the study include the blocking of access of investors to their assets, the lack of reliable legislative guarantees for the inviolability of private property rights, and the insufficient institutional capacity of the regulator. The article analyzes the recent court decisions, which demonstrate that the current legislation of Ukraine allows for the forced alienation of the shares of individual investors in favor of the state during martial law without their participation and full compensation. The study concludes that the key problem in protecting the rights of individual investors in Ukraine is the insufficient institutional capacity of the National Securities and Stock Market Commission and the lack of a necessary legislative framework. The article proposes a set of measures to improve the regulation of the stock market in order to create a favorable investment climate and ensure reliable protection of the rights of individual investors. These measures include ensuring the fundamental principle of inviolability and the constitutionally guaranteed rights of investors, creating an analogue of the American SIPC, developing a dedicated website for investor protection, aligning national legislation with global standards, creating conditions for the active development of collective investment institutions, revising tax policy, increasing the transparency and accountability of public companies, and facilitating the digitalization and innovative development of stock exchanges. The implementation of the proposed complex of measures will contribute to the formation of a full-fledged capital market in Ukraine with reliable guarantees of the preservation of assets and legitimate interests of individual investors, which will become a key prerequisite for the active mobilization of domestic and foreign investments in the process of rebuilding the national economy after the war.

Ринкові інвестиційні механізми у формуванні господарської системи України (друга половина ХІХ – початок ХХ ст.)

The study of economic heritage and the historical trajectory of the formation of the economic system of Ukraine is an important scientific task. The relevance of the problem of the formation of effective capital formation and investment mechanisms is increasing in the conditions of macroeconomic destabilization and the destruction of economic potential caused by the military attack of the Russian Federation. The purpose of the publication is to present the results of a comprehensive study of the main factors, prerequisites and trends in the formation and development of institutions and mechanisms of the functioning of the stock market in Ukraine during the second half of the 19th and early 20th centuries. Special attention is paid to the study of the components of the institutional structure of this market, which stimulate its formation and development in Ukraine. The peculiarities of the functioning of the Ukrainian segment of the stock market of the Russian Empire are determined. The process of circulation of securities on the Odesa, Kyiv, and Kharkiv stock exchanges was characterized by a lower level of state regulation compared to other stock exchanges. This contributed to the activation of investment processes and the acceleration of the development of stock market institutions and mechanisms. The contribution of Ukrainian scientists-economists of the second half of the 19th and the beginning of the 20th centuries is revealed. In the development of scientific analysis of the stock market and practical approaches to the formation of market institutions and mechanisms. A historical regularity in the formation of the stock market under the influence of state regulation of the circulation of securities has been revealed. This practice was a driver of the development of the stock market in the short term, but became an institutional barrier to the implementation of long-term investment strategies. The banking structures' monopolization of the over-the-counter circulation of securities and the establishment of control over transactions on the stock exchange led to the destruction of the mechanism of market pricing in the stock market and the increase in the cost of investment resources. The conclusion is argued that the first wave of market transformations of the Ukrainian economy (the second half of the 19th century - the beginning of the 20th century) ensured the formation of institutions and mechanisms of financial support for economic development with significant features and limitations.

Перспективні напрями розвитку фондового ринку України з урахуванням сучасних тенденцій

Introduction. The recovery of Ukraine's economy in the war and post-war periods is impossible without rebuilding the modern institutional structure of the financial sector, in which the leading place will be occupied by the domestic stock market. Problem Statement. Taking into account the fact that the stock market of Ukraine is not formed and does not correspond in most parameters to other countries of the Eastern European region, it is advisable to consider its features in more detail and propose more effective reforms in this area. Purpose. To identify the key problems that led to the decline of the domestic stock market, analyze the best practices and successful approaches to the development of securities markets in the world, as well as formulate proposals for the reconstruction of a more modern and efficient market in Ukraine. Methods. Theoretical and methodological basis of the research is scientific works of foreign and Ukrainian scientists, modern statistical information base of the stock exchanges. The study of problems and approaches related to the peculiarities of the development of the Ukrainian stock market was carried out using the methods of critical and scientific analysis, comparative analysis, scientific generalization and systematization, induction and deduction. Results. The development of the stock market in the context of digitalization opens up significant opportunities for a more innovative and rapid renewal of Ukraine. But the essential problems of the domestic stock market remain: 1) non-performance of the basic functions that are typical for other countries; especially the asset pricing function; 2) insecurity of the rights of citizens of Ukraine on the stock market; 3) lack of corporate efficiency and clear specialized vertical integration of large Ukrainian enterprises; 4) payment of dividends only to the majority shareholders, the state and manipulation with them. Conclusions. Modern developed stock markets of the world have a significant potential in the context of the development of both traditional and digital economies, so there is an urgent need to modernize the domestic stock market. At the same time, the development of the stock market will have great prospects if the infrastructure is significantly improved, the ownership of assets in Ukraine is respected, and the corporate sector respects the public interest.

ESG vs conventional indices: Comparing efficiency in the Ukrainian stock market

This paper explores market efficiency in the Ukrainian stock market to determine whether there are differences between traditional and ESG indices. Different data properties related to market efficiency are explored: persistence (R/S analysis is used for these purposes), stationarity (ADF tests), normality (Kolmogorov-Smirnoff, Anderson-Darling test, etc.), resistance to market anomalies (Day of the week effect, abnormal returns and patterns they generate are tested using parametrical and non-parametrical statistical tests), etc. Database includes daily data from 2 conventional Ukrainian stock market indices (UX and PFTS) and ESG index (WIG Ukraine) over the period 2015–2022. The following hypothesis is tested in this paper: ESG indices are more efficient than traditional ones. The findings suggest that there are no significant differences between traditional and ESG indices: they have the same persistence, stationarity, do not fit normal distribution and are not influenced by explored market anomalies. So, despite the fact that companies listed in the ESG index are more transparent and thus characterized by lower information asymmetry, they are more liquid and popular among investors, ESG index is not more efficient than traditional ones. This might be the result of unfair practices called “washing” aimed at signaling the active ESG involvement with actual absence of it. This means that many ESG companies are actually traditional. To prevent such practices, the ESG reporting regulation needs to be revised. AcknowledgmentAlex Plastun gratefully acknowledges financial support from the Ministry of Education and Science of Ukraine (0121U100473).

War build-up and stock returns: evidence from Russian and Ukrainian stock markets

PurposeThis study examined the impact of war/conflict-related news on the Russian and Ukrainian stock markets in the build-up and beginning of the war that sparked in the year 2022.Design/methodology/approachIn order to examine the impact of war-related news on stock returns, data were gathered from the United States (US) and Russian stock indices, oil price and volatile index (VIX) from Yahoo.finance; Ukrainian stock values from pfts.ua website and daily related news retrieved from nexis.com were analysed. The data were gathered from January 1, 2022 to February 24, 2022. Seeming unrealated regressions (SUR) and exponential generalised autoregressive conditional heteroscedastic (EGARCH) models were carried out to determine the formulated correlations. This study controlled the oil price, US stock returns, Chicago Board Options Exchange (CBOE) VIX and difference in stock returns of Russia and Ukraine.FindingsThe results are presented two-fold: first, war-related news between the two countries enhanced volatility and caused a significant decline in the stock market indices for both countries. Second, the Russian stock market faced a steeper decline in the build-up and the actual beginning of the war than the Ukrainian stock market. Notably, the Russian markets feared the adverse economic consequences that stemmed from the sanctions the US and the Western world imposed.Research limitations/implicationsAs this study was based on early evidence, future studies with a longer window may provide better insights. This present study is restricted to the stock returns of the countries directly involved in the build-up towards war. Studies focusing on the impact of other asset classes, currencies, commodities and global stock markets might offer holistic insights.Practical implicationsThe study outcomes suggest that global portfolio investors should stay away from stock markets of the war-raged countries and equity markets in general, but instead look for safe-haven assets.Originality/valueThe paper evaluates stock markets' performance during the pre-war period, considering the context of this historical war between the neighbours. It is important to understand this issue as this war is subject to sanctions by the US and leads to a global supply chain crisis.

Green bonds as a perspective financial instrument for bank investment in Ukraine

Banks, as the main institutional participants in the securities market, play an important role in ensuring green investment processes, positioning themselves as socially and environmentally responsible financial institutions, which confirms the relevance of the research topic. The purpose of the study is to disclose the essence of green bonds as a new financial instrument on the international and Ukrainian stock market and to determine the prospects for their inclusion in the investment portfolio of the banks of Ukraine. The study uses general scientific and special methods of scientific cognition: analysis and synthesis, induction and deduction, horizontal analysis method, graphical method, comparative legal method, and analytic hierarchy process. The authors clarify the interpretation of the economic essence of the concept of “green bonds”. The peculiarities of the formation of the global market for these financial instruments and trends in its formation in 2007-2022 are investigated. The legislative framework for regulating the national green bond market is elaborated. The advantages and disadvantages of including green bonds in the investment portfolio of Ukrainian banks are determined. The optimal tool for improving the formation of a bank investment portfolio based on such criteria as liquidity, profitability and riskiness, taking into account general banking goals, is determined and the role of green bonds as potential investment instruments for banks is characterised based on the data obtained. Barriers to the formation of green investment policy by banks and ways to overcome them are described. The practical significance of the obtained results lies in the fact that the implementation of the suggested recommendations for removing barriers to environmentally oriented investments by Ukrainian banks will help to revitalise the financing of environmental projects, and the developed proposals for enhancing the formation of investment portfolios by Ukrainian banks can be used by financial institutions to increase their financial stability and minimise the risk of investment transactions

Theoretical principles of the formation and development of the stock market of Ukraine

The article's purpose is to consider the theoretical foundations of the formation and development of the stock market of Ukraine in modern conditions. The report provides a comprehensive study and analysis of the building and development of the stock market of Ukraine. The stock market allows for attracting capital and effectively distributing it for the development of the national economy. The development of the stock market increases the level of participation of companies in attracting additional funds for their investment programs by placing their securities on the market, and a developed stock market plays a crucial role in financing the economy compared to the banking sector. Therefore, on the stock market, enterprises with real potential can attract financial resources to implement a promising project. It was determined that the primary goal of the functioning and development of the stock market in Ukraine should be attracting financial resources to direct them into the real economy to renew production. The functioning of the market is based on specific relations between the participants of the market space, which are simultaneously part of the market and its driving force. It is shown that the stock market is the most important mechanism that ensures the effective functioning of the country's entire economy. Thus, the stock market creates conditions for a free, albeit regulated, transfer of capital to the most efficient sectors of the economy. The current state, problems, and prospects of Ukraine's stock market development are studied. The stock market of Ukraine, in terms of the scale of its development and the ratio to the total volume of financial assets, is not significant. According to the analysis results, it was established that the volume of exchange contracts with securities on trade organizers in 2018-2021 had positive dynamics. Still, according to the results of trading during January-December 2022, compared to the data of the same period in 2021, the volume of trading in financial instruments decreased by 291.36 billion hryvnias. The decrease in the book of trades in financial instruments in 2022 was influenced by the start of military operations. It has been established that the modern stock market is an effective mechanism for trading financial assets. Therefore, it needs to ensure financial and economic stability, contributing to attracting investment flows. Keywords: stock market, securities, issuers, stock exchanges, financial resources, financial investments.

<p>Estimation of Stochastic Trend on Ukrainian Stock Market</p>

The paper presents a new approach for price dynamic assessment on the Ukrainian stock market based on a qualitative modification of the Black-Scholes-Merton model for estimating unknown parameters with a stochastic trend. The mean-reverting Ornstein-Uhlenbeck process was chosen as the time-dependent trend parameter since it is both mathematically convenient and has a natural economic interpretation. In order to estimate the parameters of the corresponding stochastic diffusion, the trajectory-fitting technique based on the Kalman-Bucy filter was used. The proposed approach was then tested on UX-index assets.

ФІНАНСОВО-ЕКОНОМІЧНІ ОСОБЛИВОСТІ ФОРМУВАННЯ ТА ФУНКЦІОНУВАННЯ ВІТЧИЗНЯНОГО БІРЖОВОГО РИНКУ

The article shows the state of the stock market of Ukraine, as well as the problems of it’s functioning and the study of possible ways to solve them. The stock market of Ukraine does not have a single policy of its development, and it also has certain shortcomings that create a problem for its development, since the stock market is improving and integrating into the world space every year. The main problems that hinder the development of the market are highlighted, in particular: insufficient transparency of the domestic stock market, imperfect legislation, unreliability of information about the activities of stock market participants, regulatory regulation, insufficient market capitalization, unstable situation in Ukraine, and others. An interesting fact is that exchanges cannot engage in commercial mediation, the profit of exchanges must be directed exclusively to their own development. The study of the activity of global stock exchange structures allowed us to come to the conclusion that the American model of state regulation of stock markets has been adopted in Ukraine. The article also examines the main trends in the development of global stock exchange trade and suggests the main directions for improving the efficiency of stock exchange activity in Ukraine. Statistical data on the profitability of the fixed capital of stock exchanges of Ukraine were analyzed and during the research it was found that the majority of enterprises do not consider the stock exchange market as the basis for the formation of their financial resources, which leads to a low level of capitalization of stock exchanges. In adverse current situation in Ukraine, as well as the deepening of integration processes, which potentially carry risks for the national economy, the effective functioning and development of the stock market, including stock exchanges, is a necessary condition for ensuring economic stability in the country. The stock market should function as a regulated element of the integrated financial system, synchronized with the banking sector and the public finance system. Despite the rather high dynamics of transformation, ukrainian stock market is still at the stage of formation and development.

Особливості капіталізації ринку цінних паперів в Україні

The purpose of the article is a theoretical and methodological substantiation together with elaboration of recommendations for increasing the capitalization of the domestic securities market. The article is concerned with studying the level of development of the securities market and the directions of increasing its capitalization, which will provide favorable conditions for the formation of an appropriate level of economic development of the country. Emphasis is placed on the fact that the concept of «capitalization» is interpreted as a complex dynamic process of forming prospects for the development of the Ukrainian economy, which varies depending on the outlined tasks. It is identified that the capitalization of the stock market testifies to the intensity of the national economy and reflects the dynamics of changes in its various industries. The development tendency of the world stock market is analyzed and the experience of world leading companies with the highest level of market capitalization is adapted. The volumes and structure of trading on operators of organized capital markets by type of market are considered and the main obstacles to the further development of the Ukrainian stock market are substantiated. The need to integrate the domestic securities market into the world stock market is accentuated. Based on the carried out correlation analysis, it is found that the closest relationship between the volume of trading in shares on the Ukrainian securities market and the aforementioned factors occurs with the total trading volume in the securities market, namely: the more transactions are carried out on the market, the higher the volume of transactions with shares. It is noted that the domestic securities market in order to improve the efficiency of further functioning requires: improvement of the legislative framework; increasing the level of motivation; minimization of financial risks; improving infrastructure development, etc. Further research will be aimed at developing promising directions for the integration of the domestic stock market into the global financial space.

Legal management and regulation of the activities of professional participants in the stock market of Ukraine

Purpose. To assess the effectiveness of legal management and regulation of professional participants based on the analysis of legislative, regulatory and legal documents that ensure the formation, regulation and prevention of illegal actions in the domestic stock market, as well as identify areas of cooperation with government agencies in stock market development and mediation. Methodology. In the process of research, general research methods and techniques were used, in particular: analysis and generalization to identify regulations governing the activities of professional stock market participants; analytical method to compare the effectiveness of cooperation of the National Securities and Stock Market Commission with anti-corruption organizations, synthesis to assess the completeness and effectiveness of existing legislation governing the activities of professional participants. Findings. The peculiarity of legal management and regulation of professional participants is determined; the classification mark of professional stock market participants and their activities (types of services) is formed in accordance with the National Commission on Securities and Stock Market, namely: investment firms, trade organizers (stock exchanges), clearing institutions, mortgage managers, depository institutions, companies with asset management. An analysis is performed of the effectiveness of certain laws, including the Law of Ukraine On Prevention and Counteraction to Legalization (Laundering) of Proceeds from Crime, Terrorist Financing and Financing the Proliferation of Weapons of Mass Destruction, which reduced corruption and sanctions during 20172020 and the Law of Ukraine On licensing of economic activities, which is a lever in the field of regulation and maintenance of transparency of professional market participants, prevention of illegal actions. The mechanism of cooperation of professional participants with state bodies as a component of legal management on the basis of SMIDA activity is developed. Originality. It consists in defining the areas of legal management and regulation related to the activities of professional participants in the stock market and developing mechanisms for interaction of professional participants with government agencies based on transparency, information and competitiveness. Practical value. The proposed directions of cooperation and interaction of professional participants with government agencies, in particular SMIDA and NSSMC, as part of legal management and legal support, will optimize the standards of exchange activity and development of stock trading, reduce corruption and shadowing.

STUDY OF NEURAL NETWORKS FOR FORECASTING THE VALUE OF COMPANY SHARES IN AN UNSTABLE ECONOMY

These studies deal with analysis and selection of neural networks with various architectures and hybrid models, which include neural networks, to predict the market value of shares in the stock market of a country that is in the process of unstable development. Analysis and forecasting of such stock markets cannot be carried out using classical methods. The relevance of the research topic is due to the need to develop software systems that implement algorithmic support for predicting the market value of shares in Ukraine. The introduction of such software systems in the circuit of investment decisionmaking in companies that are interested in increasing the information transparency of the Ukrainian stock market will improve the forecasts of the market value of shares. This, in turn, will help improve the investment climate and ensure the growth of investment in the Ukrainian economy. The analysis of the results of existing studies on the use of neural networks and other methods of computational intelligence for modeling the behavior of stock market participants and market forecasting has been carried out. The article presents the results of a study for the using of neural networks with various architectures for predicting the market value of shares in the stock markets of Ukraine. Four shares of the Ukrainian Stock Exchange were chosen for forecasting: Centrenergo (CEEN); Ukrtelecom (UTLM); Kriukivs’kyi Vahonobudivnyi Zavod PAT (KVBZ); Raiffeisen Bank Aval (BAVL). The following models were chosen for the experimental study: long short-term memory LSTM; convolutional neural network CNN; a hybrid model combining two neural networks CNN and LSTM; a hybrid model consisting of a variational mode decomposition algorithm and a long-term memory neural network (VMD-LSTM); hybrid VMD-CNN-LSTM deep learning model based on variational mode (VMD) and two neural networks. Estimates of forecast quality based on various metrics were calculated. It is concluded that the use of the hybrid model VMD-CNN-LSTM gives the minimum error in predicting the market value of the shares of Ukrainian enterprises. It is also advisable to use the VMD-LSTM model to predict the stock exchanges of countries with an unstable economy.

Мінімізація ризиків як складова забезпечення фінансової стійкості банківського сектору України

Abstract. Introduction. Banking activity, like any other, is accompanied by the presence of risks caused by the specifics of the relevant operations. Taking into account the effect of economic factors, the instability of the political situation, and crisis phenomena, it is important to stabilize the financial stability of the banking sector of Ukraine and further improve the mechanism for ensuring the financial stability of the banking system. Starting from 2022, the economic security of the banking system was significantly disturbed as a result of the pandemic and the introduction of quarantine measures, which in turn increases the level of banking risks. Thus, part of the borrowers of banking institutions is characterized by the inability to meet their obligations. Therefore, the state government and the National Bank of Ukraine implemented measures aimed at minimizing banking risks. Purpose. The purpose of the article is to study the modern risks of banking activity as a component of the mechanism for ensuring the financial stability of the banking sector of Ukraine, as well as to determine directions for their minimization. Results. As a result of the implementation of the risks of banking activity during the martial law, banking institutions suffered quite significant losses, especially due to the deterioration of the quality of the loan portfolio. The least risky instrument on the Ukrainian stock market is government bonds, as the risks of default in the national currency of the government are much lower than those of other issuers. Thus, the credit risks of bonds of domestic government loans are almost absent. Basel standards and European banking legislation allow setting zero capital requirements for credit risks of securities in the national currency. __________________________________________________________________________________________________________________________ __________________________________________________________________________________________________________________________________ 84 Conclusions. For the further effective functioning of the banking sector and the minimization of risks, it is important to: comply with the requirements of the NBU by banking institutions; strengthening of financial controlling; timely informing the NBU about violations of capital and liquidity, as well as about possible risks of such violations; improvement of the cyber protection system.