A billionaire triumphs in Ukrainian elections…

Billionaire Petro Poroshenko won Ukraine’s presidential election, handing him the task of stemming deadly separatist violence that’s threatened to rip the former Soviet republic apart.

Poroshenko got 53.8 percent of yesterday’s vote with 50.1 percent of ballots counted, according to the Election Commission in Kiev. Ex-Prime Minister Yulia Tymoshenko was second of the 21 candidates with 13.1 percent. While unrest curbed voting in the easternmost regions, Poroshenko’s success was welcomed in the U.S. and Europe. Russia hasn’t commented yet.

Poroshenko is faced with a shrinking economy and a pro-Russian separatist movement that’s captured large swathes of the Donetsk and Luhansk regions. President Vladimir Putin, who doesn’t recognize the government in Kiev, has pledged to work with the winner. The U.S and its allies said they’d tighten sanctions against Russia if voting was disrupted.

Poroshenko’s victory “marks an important step forward in resolving the political crisis that’s gripped the country,” Neil Shearing, chief emerging-markets economist at London-based Capital Economics Ltd., said today in an e-mailed note. “However, the challenges remain daunting.”

Ruble Strengthens

Poroshenko’s success is “strongly” positive for bond markets in Ukraine and Russia, Vladimir Miklashevsky, a Helsinki-based strategist at Danske Bank (DANSKE) A/S, said by phone. The hryvnia, this year’s worst-performing currency with a 31 percent plunge against the dollar, was unchanged this morning in Kiev, data compiled by Bloomberg show. The ruble strengthened 0.4 percent against the U.S. currency.

In his first comments after the election, Poroshenko said he’s concentrating on leading Ukraine out of crisis.

“Our first step will focus on ending the war, chaos and disorder,” he told reporters last night at his campaign headquarters in Kiev, pledging to visit the troubled eastern regions and to work with Russia to resolve the conflict.

He said he’d call early parliamentary elections in 2014 as the nation seeks to draw a line under the rule of ousted President Viktor Yanukovych, the Russian-backed leader who fled for Moscow in February after deadly street protests backing closer European ties.

Business Acumen

Poroshenko, who has a fortune of $1 billion according to the Bloomberg Billionaires Index, has flaunted his business acumen and promised to boost wages by nurturing employment and gearing the economy toward Europe through a trade pact. He reiterated yesterday that he’d sell his assets that include the Roshen chocolate company and is hiring an investment bank to help with the sale.

The tycoon, who speaks Ukrainian and Russian fluently, is known for his ability to work with different camps. He was foreign minister under President Viktor Yushchenko, the hero of the 2004 Orange Revolution that helped overturn Yanukovych’s election win, before serving as economy minister under Yanukovych, who had returned to power in 2010.

Ivan Hrynko, a 27-year-old doctor, said at a Kiev polling station that he voted for Poroshenko because the tycoon has the people’s support and “will be able to reinstall order.”

“There’s hope he’ll be able to resolve the situation in the east,” said Hrynko, who wore a yellow and blue Ukrainian flag T-shirt and had a small flag painted on his cheek.

‘Important Day’

U.S. President Barack Obama said the election is another “important” step forward in Ukraine’s efforts to unify the country and ensure all citizens’ concerns are addressed.

“The U.S. looks forward to working with the next President, as well as the democratically elected parliament, to support Ukraine’s efforts to enact important political and economic reforms,” he said in an e-mailed statement.

German Foreign Minister Frank-Walter Steinmeier spoke of a “very important day,” telling ARD television the poll results are “a clear signal also to the separatists that the great majority of people in Ukraine want unity, freedom and democracy — and not the splitting up of Ukraine.”

The EU has developed a road map for possible economic sanctions against Russia, the Handelsblatt newspaper reported today, citing an unpublished European Commission document. The first stage would include an arms embargo and restrictions on luxury goods imports, the second would ban coal imports and restrict capital flows and the third foresees a complete ban on oil and gas imports as well as investment restrictions, it said.

Red Line

The red line laid out by Obama and German Chancellor Angela Merkel for additional sanctions on Russia — interference with the elections — was crossed, U.S. Senator Kelly Ayotte, a New Hampshire Republican observing the vote in Kiev, said by phone.

“You could have an election in eastern Ukraine if it weren’t for the Russian intimidation and violence,” she said.

Ukraine held the vote amid separatist unrest that erupted after Russia annexed the Black Sea Crimean peninsula in March. It says the turmoil is orchestrated by the government in Moscow, which denies the accusation. Putin last week ordered a troop pullback from his neighbor’s border after military drills that stoked tensions.

Clashes continued yesterday in the Luhansk region, where pro-Russian gunmen sought to stop the vote. One person was killed in the town of Novoaydar, according to the Interior Ministry. An Italian journalist died May 24 amid fighting in the Donetsk city of Slovyansk, the Foreign Ministry in Rome said.

Angry Mob

With security a major concern, less than a third of polling booths in the Donetsk and Luhansk regions opened, the local administrations said on their websites.

The largely Russian-speaking Donetsk and Luhansk regions are home to 5.1 million voters, a seventh of Ukraine’s electorate, according to Central Electoral Commission data. Separatists there have abducted voting officials and issued death threats, according to the Commission.

An angry mob in Donetsk descended on the residence of Rinat Akhmetov, Ukraine’s richest man. The billionaire last week enraged the militants by urging people, including his 300,000 employees in eastern Ukraine, to stand up against the rebels.

The Ukrainian army and separatists maintained positions along the road from Donetsk to Krasnoarmiysk yesterday. A shot-up car and a burned-out restaurant were evidence of fighting last week.

“I hoped until the last moment that we’d get to vote,” said Tatiana Kostenko, a teacher at the Donetsk national technical university who planned to vote for Poroshenko. “The authorities could have done more to secure the elections.” Source: Bloomberg