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Despite the political hiatus in Ukraine, the private sector has never been in better health. Unhealthy relations with politicians have not disappeared but they are receding, and a parliament full of businesspeople is likely to help liberalise markets. In this climate, Ukraine's domestic capital markets are making encouraging progress, although the new generation of more entrepreneurial and transparent companies also have many international fundraising options. James Hydzik reports.

The Orange Revolution of December 2004 revitalised Ukraine's political life, but so far, the economy's progress since then has been disappointing. GDP growth stagnated last year and then Russia doubled the price of gas. However, as Julian Evans reports, despite some grim macro economic numbers, the consumer and financial sectors are thriving.

Only four private equity funds are active in Ukraine, but they claim to be making impressive returns. With spending power rising fast, consumer-driven companies and financial services look the most promising sectors for investment. Julian Evans reports.

For a country of its size, Ukraine's debt is one of the smallest in Europe, and the Ministry of Finance is determined to maintain this careful approach. Tax receipts are expected to rise this year, and the republic is only planning $1bn of external borrowing this year. Ukraine's deputy minister of finance, Vitaliy Lisovenko, tells Duncan Kerr how he plans to keep improving the republic's cost of funds.

Ukraine's loan market more than tripled in value last year to just under $1.5bn, despite the upheaval wrought by the Orange Revolution, and the fractious nature of Ukrainian politics since. Bankers do not expect that rate of growth to continue this year, but do expect more Ukrainian borrowers to tap the loan market for funding, and more lenders to line up in support of the deals. Nick Briggs reports.

On a trip to London the Venezuelan president gives potential investors a broad insight into his vision

The Inter-American Development Bank (IDB) could decide in September how much it will provide to finance the second stage of the Camisea gas project, Camisea II. Original plans called for Peru LNG to export liquefied natural gas from the US$3.3 billion to Mexico and/or the US from 2009 or 2010, although executive Del Solar said liquiefieid could be sent to Brazil first if that country pays more.US oil company Hunt Oil holds a 50% interest in the Camisea consortium, Spanish oil firm Repsol 20% and South Korea's SK Corporation 30%. The consortium also is evaluating ways that local investors such as pension funds and banks could finance the project, according to Del Solar. "We are negotiating with other multilateral entities," he said. The IDB loan could reach $400 million and the aim is to secure financing once the project's environmental audit has been completed.

Tim Collins has joined Lehman Brothers in New York as head of U.S. synthetic marketing. He focuses on equity swaps and reports to Mike Lawsky, head of U.S. portfolio and synthetic sales. Reached at Lehman on his first day, Collins said his hire is part of a new effort and he will be hiring a team of about three people in coming months.

Ajay Khanna, managing director and head of equity derivatives trading at Wachovia Securities in New York, has left the firm. He did not respond to messages left with colleagues and could not be reached. Elise Wilkinson, spokeswoman for Wachovia, declined comment.

Korean banks are picking up investment in synthetic collateralized debt obligations, as they look to improve balance sheets for the approach of the Basel II accords. "Local banks want to increase their quality of assets," said a branch head at a European house in Seoul, noting the pick up in interest for investment-grade international CDO portfolios. He added, "Structured credit in Korea is very hot this year."

Duke Funding Management, the collateralized debt obligation arm of USD17.5 billion Ellington Management Group, is managing its second hybrid synthetic CDO. The USD1.2 billion deal, called Duke Funding X, consists of 80% credit-default swaps on prime and sub-prime residential mortgage-backed securities and the rest in cash securities.

Merrill Lynch has hired Hongbing Hsu, v.p. in structured credit trading at Bank of America, as a director in New York. At Merrill, he reports to Ronnie Roy, managing director and head of structured credit derivatives.