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A Soviet Army veteran passes by posters during the International poster campaign to support Ukraine in Kiev.EFREM LUKATSKY/The Associated Press

Dmytro Tarabakin winces when he's asked to comment on the state of the Ukrainian stock market.

"The local market here? There's not much left," said Mr. Tarabakin, managing director of sales and trading at Dragon Capital, one of Kiev's largest investment firms. "It started to pick up lately as we started seeing hope at the end of the tunnel, we hope at least."

Hope is about all Mr. Tarabakin and other Ukrainian investors have these days. The country's main stock market, the Ukrainian Exchange, has seen trading volumes plunge more than 90 per cent in the past three years, as the economy soured and political instability increased. Today, less than $4-million worth of shares changes hands daily and the UX index has fallen from a peak of 2,962 in 2011 to 1,030 on Wednesday.

There are plans to reorganize the exchange and merge it with a smaller player called First Securities Trading System, or PFTS. That would create a single stock market for the country, something proponents of the merger say would cut costs and improve inefficiencies.

But negotiations have dragged on for months and some doubt if the deal will happen, given the current upheaval in the country.

And then there's another factor; the Moscow Stock Exchange is a major shareholder of the Ukrainian Exchange and PFTS and it is expected to become the controlling shareholder of the merged entity. With Ukraine already locked in a confrontation with Russia over the future of Crimea, having a key part of its financial sector controlled from Moscow might not be popular.

Konstantin Kakusha, a spokesman for the Ukrainian Exchange, played down the Moscow connection, saying it shouldn't be a factor in the merger talks. "It's completely another conversation," he said referring to Crimea. "It's just business, nothing more." He said the exchange has big plans going forward, such as expanding its derivatives listings and broadening into commodities. But all that hinges on the country's future.

Mr. Tarabakin was less certain. "I don't know. It's a difficult issue," he said when asked about the Moscow Stock Exchange having control. "It doesn't matter who owns it really. What can they do? The market is small and it's completely irrelevant who owns it."

Ukraine doesn't have a long or illustrious history of stock markets. The first equity markets developed in the 1990s, after the country won independence from the Soviet Union, and at one point there were around a dozen. They all nearly collapsed during the 1998 financial crisis but made a comeback after the Orange Revolution in 2004. The economic and political turmoil since 2011, coupled with growing competition from other stock markets in Eastern Europe, killed off many of the exchanges and today nearly all trading is done on the Ukrainian Exchange, which launched in 2009 and has about 200 listed companies. The smaller PFTS was created in 1996.

Both exchanges have historic ties to Moscow and were caught up in a merger of Russia's two major markets three years ago. The Ukrainian Exchange was built with help from the Russian Trade System, or RTS, which took a 43-per-cent ownership stake. PFTS had been controlled by the Moscow Interbank Currency Exchange, or MICE. When the two Russian markets combined in 2011, creating the Moscow Stock Exchange, talks began about merging the Ukrainian markets.

Moscow Stock Exchange spokesman Lev Bystrov said the company wants to push ahead with the merger. "We hope that the economic situation in Ukraine stabilizes and that we can return to our joint work of developing the Ukrainian exchange infrastructure, including through the merger of these two exchanges," he said.

Mr. Tarabakin is all for putting the exchanges together, but says it won't be nearly enough to solve the country's investment woes. "If we get the country together, then this [merged] exchange will have something to do," he said. "If we don't get it together, it doesn't matter what the exchanges do."

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