Middle East

By Daryna Krasnolutska and Kateryna Choursina

iEPVQWuEy1EIOct. 29 — Ukrainian President Viktor Yanukovych’s ruling party got more votes than its rivals in parliamentary elections, boosting stocks and bonds before monitors deliver a verdict on the ballot later today.

The Party of Regions had almost 35 percent of party-list votes and was leading ballots in more than half of the 450-seat legislature’s 225 single-mandate constituencies, preliminary results showed. The Organization for Security and Cooperation in Europe will hold a news conference on the elections at 2:30 p.m. in the capital, Kiev.

Yanukovych, 62, whose government wants the election deemed democratic to revitalize its European relations, trumpets stability, economic expansion and the Euro 2012 soccer tournament among his party’s achievements. While ties with the European Union have soured and growth may reverse in the second half of the year, opponents have struggled since ex-Premier Yulia Tymoshenko was imprisoned in 2011.

“Given that key opposition figures remain in jail, and were unable to campaign in these elections, it will be difficult for the West to call the elections fully free and fair,” Timothy Ash, a London-based strategist at Standard Bank Plc, wrote in an e-mailed note.

Bonds, Stocks

Ukraine’s dollar Eurobond due 2017 climbed for a fourth day, cutting the yield 22 basis points, or 0.22 percentage point, to 7.067 percent, the lowest level since the notes were sold in July. That’s the biggest decline since Oct. 16.

The benchmark UX equity index added 4.7 percent to 862.84, rising for a second day as all 10 stocks in the gauge climbed. The hryvnia fell 0.6 percent to 8.1805 per dollar.

The Party of Regions garnered 34.86 percent, compared with 22.07 percent for opposition groups united under Tymoshenko, with 52 percent of ballots counted in party-list voting as of 1 p.m., the Kiev-based Central Electoral Commission said on its website.

Heavyweight titleholder Vitali Klitschko’s UDAR won 12.88 percent of ballots, the Communists, Yanukovych’s current coalition partner, received 14.86 percent and the nationalist party Svoboda had 8.44 percent. Ukraine Forward, for which soccer star Andriy Shevchenko campaigned, didn’t meet the 5 percent parliamentary entry threshold, the figures showed.

Free, Democratic

Turnout at the election was 58 percent at 8 p.m. yesterday, according to the Central Electoral Commission. Final election results will be published tomorrow.

“Free and democratic elections have been conducted,” Prime Minister Mykola Azarov, who leads the Party of Regions’ party list, said yesterday in a statement on the party’s website. “We’ve won in an absolutely honest fight.”

Ukraine’s foreign-currency bonds have returned 24 percent this year, the most after Venezuelan debt, according to JPMorgan Chase & Co.’s EMBI Global Index, which gauges the yield difference relative to U.S. Treasuries.

Still, after expanding 5.2 percent last year and 4.7 percent in 2010, the economy will contract in the second half because of lower prices for steel, Ukraine’s main export earner, Erste Bank AG and HSBC Holdings Plc have predicted.

Single-Mandate Races

The Party of Regions prevailed in 117 single-seat constituencies after 54 percent of votes were counted, with the Tymoshenko-led opposition winning 35 races, according to the Central Electoral Commission’s website.

The united opposition and Svoboda agreed Oct. 19 to form a coalition and Klitschko said yesterday his party may join them in parliament.

“We’ll sit and discuss joint actions,” Klitschko said. “We see possible cooperation with those forces that support a democratic, European future for Ukraine. I reiterate: we won’t cooperate with the Party of Regions or the Communists.”

The EU has delayed indefinitely a planned Association Agreement with Ukraine because of Tymoshenko’s conviction for abuse of office while premier. It’s urged Yanukovych and his government to conduct fair elections, calling them “a litmus test” of Ukraine’s democratic credentials.

The government is striving to ensure the elections meet international standards in a bid to “reset” relations with the EU, First Deputy Prime Minister Valeriy Khoroshkovskiy said in an Oct. 18 interview.

“The record number of observers that have come here from North America, Europe and Central Asia for this event underscores the importance we as the international community place on Ukraine’s democratic progress,” the OSCE, the Council of Europe, the European Parliament and NATO said yesterday in an e-mailed statement. “We hope to see the citizens of Ukraine participate fully in Sunday’s vote.”

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