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Russian forces have raised their flag over the strategically important town of Vuhledar in eastern Ukraine, paving the way for further advances as Kyiv’s struggle to increase their manpower and secure long-term western support.

The capture of Vuhledar, confirmed by both sides, comes at a critical point in the Ukrainian defence against Russia’s full-scale invasion that started in 2022 — as further western assistance to Kyiv will hinge on the result of the US presidential elections next month.

Drone footage published by Russian forces late on Tuesday showed soldiers hoisting the Russian flag above bombed out buildings in the shattered town used by Ukrainian forces as a vantage point to attack Russian supply lines further south. 

A commander for Ukraine’s 72nd brigade, Stanislav Buniatov, said some of its forces had withdrawn so as not to be encircled, adding “the situation remains tense, not without losses”.

At least 107 residents remain in the town, according to the Donetsk region governor, Vadym Filashkin.

But Russian military bloggers expressed doubt that Russian forces would be able to quickly advance from Vuhledar given that cities further north are better fortified, including the logistical hub of Pokrovsk which, if captured, would sever supply lines for Ukrainian troops in the area.

Still, the capture of Vuhledar highlights the cost of the war for Russia, with thousands of troops killed and hundreds of tanks and armoured vehicles destroyed in exchange for small territorial gains.

Under increased pressure to find a way to end the war, Ukraine’s leadership fears a return to the White House of Republican candidate Donald Trump may force the country into a bad deal.

President Volodymyr Zelenskyy toured the US last week to seek security guarantees and further advanced weaponry, including the use of long-range missiles to strike targets in Russia before President Joe Biden leaves office. But other than some additional financial aid, Zelenskyy returned with less than he hoped for.

Russia has lost hundreds of thousands of men in eastern Ukraine, according to western intelligence, largely due to the so-called “meatgrinder” tactic it employs for relatively small territorial gains, sending “human waves” towards Ukrainian front lines with little regard for their lives.

But the tactic has worked, with Russian forces making steady progress this summer and capturing small settlements on almost a daily basis.

Russian President Vladimir Putin last month announced the increase of his armed forces by another 180,000 men. He has been reluctant to conscript people into the army, following a mass exodus in 2022 when he signed such an order, and instead has been using financial incentives to attract more soldiers.

In Ukraine, new recruits are mainly conscripted as the bulk of motivated men are already serving and the country cannot afford to offer sign-up bonuses. Desertions have increased as a result, with many battle-hardened commanders deploring the lack of training and motivation of soldiers sent to replace the ones who have been fighting for years.

For captured troops, the fate is even grimmer.

Just south of Pokrovsk drone footage published on Russian social media channels shows Russian forces executing 16 captured Ukrainian soldiers.

In the birdseye view drone video, reportedly taken between the villages of Mykolaivka and Sukhyi Yar, 16 men are lined up and then executed.

Ukraine’s prosecutor-general’s office said it was investigating the incident, which it described as the largest of its kind. The Financial Times could not independently verify the footage.

Andrea Orcel stunned Germany last week by raising UniCredit’s stake in Commerzbank from 9 per cent to 21 per cent in a manoeuvre that mirrored tactics made notorious in hostile takeover battles more than a decade ago.

When carmaker Porsche and automotive supplier Schaeffler Group came for German blue-chips Volkswagen and Continental in 2008, they built their stakes by stealth. Back then, there was no legal obligation to disclose positions built through derivative instruments that guaranteed access to shares only at a later point in time.

The loophole in EU disclosure rules has since been closed, making large-scale secret stakebuilding impossible.

For Orcel, a former M&A banker and now chief executive of UniCredit, the stricter disclosure rules for financial derivatives presented a different opportunity: UniCredit has been able to disclose a 21 per cent stake in Commerzbank while complying with rules that, for now, block it from owning more than 10 per cent.

“Think what you may but this is just beautifully done,” said one Frankfurt-based banker.

At the core of the trade is an arbitrage between two rule books.

Eurozone laws governing bank ownership and control mean no one can buy more than 10 per cent of a lender without first getting the green light from the European Central Bank.

Approval may be a formality for an EU-based bank such as UniCredit, which had already said it would seek ECB consent after acquiring its first 9 per cent stake. But the process can take months, which allows rivals to build their own positions, hedge funds to snap up shares and a target to buttress its defence.

However, ECB acceptance is only required for UniCredit to take control of voting rights attached to Commerzbank shares. The rules neither stop the Italian bank from gaining economic exposure to the target’s stock beforehand nor ban the signing of contracts now to receive the shares after central bank approval.

Disclosure rules for share ownership in the securities laws enacted after the Porsche and Schaeffler tussles have a different focus: they require an investor to reveal the position when it owns — directly or indirectly through derivatives — an economic interest in 5 per cent of the shares or when they hit higher thresholds, one of which is 20 per cent.

This discrepancy allowed Orcel to reveal a huge jump in UniCredit’s stake in Commerzbank, taking it from a minority investor to leapfrogging the German government as the single biggest shareholder. Its position is also big enough to make it difficult for potential competitors to make a counter-offer for the German bank, should it decide to pursue a takeover.

At the core of the transaction are contracts UniCredit entered with Barclays and Bank of America, according to voting rights disclosures and bankers familiar with the deals.

Both investment banks struck so-called total return swap agreements with UniCredit, in effect committing to replicate the economic performance of Commerzbank’s stock. If the German lender’s shares go up, or the bank pays its dividend, the counterparties will pay the change in value to UniCredit. If the stock goes down, UniCredit must cover the difference.

Barclays and BofA also committed to physically deliver the Commerzbank shares to UniCredit later, should the Italian lender still want them. While the banks have bought a few Commerzbank shares directly, they hedged their trade mostly through put and call options, according to disclosures.

Four people familiar with the deal say the two investment banks will each make €12mn in fees and other income on the trade, which has a notional value of €2.3bn. The income each bank stands to receive could rise to €40mn-€50mn if the contracts are extended beyond 2026 or otherwise modified, they said.

People familiar with UniCredit’s thinking said the fees were “far lower”, without elaborating.

“In itself, a total return swap is not a very complex transaction and relatively simple from a technical point of view,” said former senior Deutsche Bank derivatives trader Pius Sprenger.

But “applying it on such a large scale as in the Commerzbank case required a lot of determination”, said Thomas Schweppe, a former Goldman Sachs M&A banker and founder of Frankfurt-based investor advisory boutique 7Square.

And last week’s 11.5 per cent total return swap was far from the first step in Orcel’s pursuit of Commerzbank.

Preparations to acquire the German bank started back in 2023 when the Italian lender silently built a direct stake of just under 3 per cent, said two people with direct knowledge of the matter, hovering below the first disclosure threshold for direct holdings.

In August 2024, when rumours started to circulate that the German government may soon start selling down its 16.5 per cent stake, UniCredit acquired another 1.7 per cent through a much smaller total return swap, still sitting below the 5 per cent threshold for combined direct and indirect positions.

Then on the night of September 10, the Italian bank bought another 4.5 per cent from the German government when it outbid financial investors in a block trade, clearing the 5 per cent disclosure threshold for the first time and subsequently revealing its 9 per cent position. By September 23, it had converted the initial, smaller total return swap into shares.

On the same day, UniCredit entered two much larger total return swaps, relating to stakes of 5 per cent and 6.53 per cent, that will expire in 2026. A two-year exercise period — much longer than the expected six to 12 months timeframe for obtaining regulatory clearance — shows the Italian bank is “patient”, said one insider.

UniCredit negotiated the derivatives without external advisers, relying on in-house expertise, said people with knowledge of the situation.

UniCredit’s equity and credit sales and trading team is headed by derivatives specialist Salvatore “Chicco” Di Stasi, who joined from UBS last year and previously worked at Goldman Sachs.

“He has something that you don’t [often] find in a large commercial bank, nor in UniCredit . . . He is very, very creative as far as structuring is concerned,” one former colleague said.

Total return swaps can come with risks. During the 2008 financial crisis, large drops in VW and Continental shares left Porsche and Schaeffler Group exposed to huge losses when their derivative stakes lost billions of euros in value.

Orcel has eliminated that risk with another layer of financial engineering, said people familiar with the transaction. He is using a so-called collar to hedge the Commerzbank position against share price declines, while also waiving large parts of the upside.

The structure — consisting of opposing call and put options — in effect locks in last week’s Commerzbank share price.

The careful stakebuilding served to underscore Orcel’s seriousness about gaining control of Commerzbank despite political opposition.

Revealed days after the German government announced it was pausing sales of its remaining stake in Commerzbank in the wake of UniCredit’s initial stakebuilding, one insider said Orcel had used the trade to ask: “Can you hear me now?”

Another banker familiar with the deal said Orcel used the derivatives to “walk the talk”, with the position underpinning his verbal interest in Commerzbank.

Hedging the downside to the Commerzbank trade backs Orcel’s claim he could walk away from his pursuit of the German group, the banker said.

While such an announcement could lead to a steep fall in Commerzbank’s share price, UniCredit’s losses would be limited. Similarly, if a future deal with the German bank did go through, Orcel could take full possession of the underlying 11.5 per cent stake at its mid-September price without having to pay a meaningful takeover premium.

UniCredit’s trades have also made it far harder for potential rivals such as Deutsche Bank, BNP Paribas or ING to build a similar derivatives position in Commerzbank.

While Commerzbank is a highly liquid stock, close to a third of the total market capitalisation is tied up: 12 per cent is owned by the government, and 21 per cent is controlled by UniCredit.

As one German banker said: “For everyone else, mustering a counter bid has become quite a lot harder.”

Following Labour’s general election victory in July 2024, the party has been clear it wishes to kickstart economic growth, but to do that it “needs to encourage more investment”.

This is what Parmenion chief investment officer Peter Dalgliesh told Money Marketing while discussing the upcoming Budget on 30 October.

Chancellor Rachel Reeves background as a supply side economist “means she is always focused on investment”, Dalgliesh said.

Reeves used to be an economist at the Bank of England, where she worked on the central bank’s Japan desk. She also worked for HBOS, a UK banking and insurance company owned by Lloyds Banking Group.

However, in regards to the rumours circulating Labour could raise money through extra wealth taxes, Dalgliesh added: “If you put taxes up on those who can afford to invest, you will score an own goal.”

He is still optimistic looking forward though, due to wage growth and rising property prices.

Dalgliesh also feels the UK is a “pretty resilient country” irrespective of what is announced by Reeves on 30 October.

As a whole, from an investment point of view, he feels the UK is an “interesting market at this point in the cycle”.

He has seen in recent surveys that financial advisers want to increase exposure to the UK. Additionally, the Bank of America releases a quarterly survey that showed institutional managers wish to do the same.

Dalgliesh also touched on the ongoing pensions review launched by Labour, which he hopes will result in the minimum of auto-enrolment to be raised and that UK pension funds will start to invest in “our own market”, the UK.

He said France, Italy, US and Australia all do this, but the UK is an “anomaly”.

Still, Dalgliesh is “sympathetic” for the new government as he believes everyone got a “bit ahead of themselves in our anticipation” following the general election result.

“Let’s see what happens when they take their time.”

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The FT is seeking entries for its fourth annual list of Africa’s fastest growing companies, which will be published in May 2025. 

In partnership with data provider Statista, the FT aims to identify companies with the strongest revenue growth between 2020 and 2023. The ranking will appear in a special report published in a weekday edition of the newspaper and on FT.com, alongside articles by FT correspondents on trends identified in the research. 

Entries will highlight, not least, the type of companies that have performed well in spite of the difficulties induced by the Covid pandemic. Our previous rankings indicated the growing body of African businesses achieving a healthy increase in revenues.

Potential candidates for the next list can forward their names via this website. Others will be contacted by Statista.

The deadline for submission of entries is January 31, 2025.

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Inclusion in the ranking is a visible and public acknowledgment of a company’s performance that extends beyond its specific industry and country. It may also generate attention from potential partners, customers and worldwide investors.

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Corporate growth usually generates demand for new employees. Being featured in the ranking will increase awareness of you as an employer, and of your potential. 

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Reporters will write about standout companies, specific sectors and business trends in Africa. The ranking will be published in a print report in an FT weekday edition and the full rankings will appear online. 

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Companies included in the list may use the award logo for marketing purposes upon payment of a licence fee. Companies can still publicise the award free of charge if they do not use the official label.

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To be included in the ranking, your company must meet the following criteria:

• Revenue of at least $100,000 generated in 2020¹; 

• Revenue of at least $1.5mn generated in 2023¹; 

• A independent company (not a subsidiary or branch office of any kind);

• Headquartered in an African country. 

 ¹ Countries that do not use the dollar to express revenues should provide average local currency value equivalent over the course of the relevant fiscal year 

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Please register with Statista by January 31 2025. Alternatively, download this form and send it to ft-africa@statista.com upon completion. 

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Your revenue data must be verified using this form. The form must be signed in person by a managing director or a member of your executive committee (chief executive or chief financial officer) and emailed to Statista by January 31, 2025 at ft-africa@statista.com. 

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