Kyiv-listed stocks ended their month-long run of gains last week after the government failed to find an investor for the widely announced privatization of the Odessa Chemical Plant (OPP). Market players took the news as evidence of a lack of political will in the country to seek the path for a better investment climate. The OPP is a large fertilizer producer which was prepared for auction with a starting price of USD 530mn for a 99.6% stake. Although the government has been talking about open and transparent sale of the company since 2014, the auction received no bids from investors. This may have been due to the rather high price and also to OPP’s debt of USD 193mn to Ukrainian industrialist Dmytro Firtash’s Ostchem company. The UX index lost 0.9% to close at 711 points on Friday (Jul 22). CentrEnego (CEEN) fell 0.9% to UAH 7.74 per share, as the case of OPP highlighted all the difficulties in the process of privatizing large state enterprises in Ukraine. CentrEnergo’s privatization has been repeatedly delayed since 2012, and is now scheduled for 1Q17, but with no confidence that the State Property Fund will actually manage to conduct the sale of the government’s 78.8% stake. Meanwhile, CentrEnergo has promised to pay a UAH 0.10 per share dividend for FY15 and FY14. The ex-rights date for the dividends has not been determined yet. Among other blue chips, DonbasEnergo (DOEN) dropped by 1.1% to UAH 13.70 while UkrNafta (UNAF) and Motor Sich (MSICH) had losses less than 1% for the week. In London trading, MHP (MHPC) dropped by 3.9% to USD 8.65 per share despite reporting an increase in poultry sales volumes in 2Q16. Ferrexpo (FXPO) retreated from its recent local maximum, sliding 2.5% to GBp 39.00. Warsaw-listed Kernel (KER) rose 7.3% to a new three-year high of PLN 61.48, riding on European coattails and ignoring the company’s unimpressive operational update for April-June. On the currency front, the hryvnia was steady against the dollar for a third consecutive week at 24.82 UAH/USD.
POLITICS AND ECONOMICS
- IMF Snubs Kyiv as Loan Resumption Delayed Again
- Lutsenko Says Looking Into Interior Ministry Surveillance of Sheremet
- Industrial Output Down 3.4% YoY On Weak Coal Production
STOCKS IN THE NEWS
- Kernel’s Bulk Sunflower Oil Sales Down 30% YoY in Apr-Jun Quarter
- MHP’s 2Q16 Poultry Sales Up 4% YoY to 149,000 Tonnes
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