Ukraine"s currency and bonds fall

Ukraine"s currency the hryvnia weakened yesterday after Prime Minister Yulia Timoshenko said yesterday"s vote was too close to call as opposition leader Viktor Yanukovych claimed victory.

According to the Central Electoral Commission, after 95.42% of the ballots were counted, Yanukovych obtained 48.27% of the vote, versus 46.10% for Yulia Timoshenko. However, prime minister Tymoshenko refuses to accept defeat.

On the Kyiv market, the hryvnia weakened 0.5 percent for the first day in four, to 8.0700 units per dollar.

Government bonds denominated in dollars, with a 2012 maturity, dropped 0.4%, to 91.323 cents on the dollar, reaching the lowest level since January 14th.

Analysts expect negative sentiment to persist on Ukraine"s financial markets until the winners of the election are announced.

A prolonged post-election battle would prevent the country from freeing up a delayed $16.4 billion emergency loan by the International Monetary Fund. The loan package was put on hold indefinitely after the country failed to pass the 2010 state budget and cut public sector spending.

Italian bank Unicredit SpA considers that a victory by "pro-Russian" Yanukovych would benefit OAO Gazprom, OAO Lukoil, Evraz Group SA and other Russian companies with "substantial interests" in the country. The bank"s experts also said that Yanukovich would probably "keep the hryvnia weak".

On February 7th, The Central Electoral Commission of Ukraine said it would announce the definitive results of the second voting round within ten days.