Equity
Locally-listed Ukrainian stocks recovered most of their massive losses from Monday’s session in line with a big rebound in Europe, after global investors appeared to be reassured by comments from Russia’s President Putin that he does not want a war in Ukraine. However, Putin broadly maintained his tough line that Russia has a right to intervene militarily, and given the ongoing possibility of pro-Russian unrest in Eastern Ukraine, we thus see the large relief rally as looking a bit premature and/or overdone. The UX index gained 9.8%, closing at 1082 points. DonbasEnergo was the day’s standout performer, adding 14.9% to UAH 40.50, and UkrNafta and Raiffeisen Aval erased their Monday losses with respective rises of 12.8% and 13.9%. Top liquid name Motor Sich, which had fallen by less than other blue chips on Monday, posted a smaller rebound of 4.9%. In London, the gains were less pronounced, with Avangard and JKX Oil&Gas picking up around 2% each, while MHP appreciated by 3.7% to USD 13.80. In Warsaw, Kernel and Astarta rose by 10% and 2.9% respectively.
Fixed Income
Ukrainian sovereigns rebounded on Tuesday as the crisis in Crimea appeared to stabilize somewhat. Ukraine-23s advanced by 4.3p.p. to 87.0/88.5 (9.7%/9.4%). Corporate names were mixed, however; the 2015 Eurobonds of Metinvest, which has potential conflict-zone exposure in Eastern Ukraine, plummeted by 4.4p.p. to 90.0/93.0 (22.8%/19.0%), while MHP-20s shot up by 5.4p.p. to 81.7/82.9 (12.7%/12.3%).
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