Ukraine’s equity market was unable to find any new drivers to extend its autumn gains last week, and saw its first substantial correction in two months. Neither the news that the World Bank approved USD 500mn in loan guarantees for Ukraine’s natural gas imports, nor statistics indicating that retail sales rose 4.1% YoY in September was able to inspire traders. On the diplomatic front, the leaders of Ukraine, France, Germany and Russia met in Berlin to discuss the stalled Donbass peace process, with indications that Moscow is trying to establish firmer control over its proxies in the occupied territories. Unfortunately for investors, two years after the EuroMaidan revolution, Ukraine is stuck in a gray zone of half-reforms and half-war. While the country has held together impressively, the optimists who were expecting a quick transition into a modern nation-state have been disappointed. The UX index lost 1.5% over the week, ending at 829 points on Friday (Oct 21). Reports that Poland and Ukraine are discussing plans to launch joint production of helicopters for military use did not help Motor Sich (MSICH), which slipped to UAH 1,900 per share on a 0.9% loss. In other blue chips, UkrNafta (UNAF) and CentrEnergo (CEEN) declined by 0.8% and 2.1% respectively.London-listed Ferrexpo (FXPO) continued its stunning autumn rally, jumping by another 10% to GBp 109 per share. The company confirmed its strategy to increase its iron ore pellet production to 16mn tonnes p.a. by 2020 and announced that it is enjoying strong demand for its output on export markets, while low-liquidity issue MHP (MHPC) was little-changed at USD 9.35. In Warsaw, Kernel (KER) continued to sit just below the PLN 60 level, closing at PLN 59.80.On the interbank currency market, the NBU was buying up offered hard currencies at a bid of 25.67 UAH/USD on Friday, capping the hryvnia’s gain for the week at 1.0% to 25.65 UAH/USD.
POLITICS AND ECONOMICS
-Poroshenko Slams Domestic Critics of Minsk Deal after Normandy-4 Roadmap
- Danyliuk: Ukraine to Use USD 500mn WB Guarantee for Gas Purchases
STOCKS IN THE NEWS
- Ferrexpo Bullish on Expansion Amid Strong Demand for Premium Pellets
- MHP Poultry Sales Volume Up 11% YoY to 166,300 tonnes in 3Q16
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