Kyiv-listed stocks were on the rise last week despite several unimpressive blue chip earnings reports for the third quarter, as the NBU’s decision to further cut its main refinancing rate from 15% to 14% provided more confidence in a broad economic recovery in the country. The central bank said that 12-month consumer inflation of 7.9% YoY for September was in line with its expectation. The NBU sees the inflation at 6%-10% for the next year, and that it will continue to adjust the key rate closer to the target level. In other developments, Ukraine’s government appears to have started the next round of bargaining with the IMF over disbursement of the country’s USD 17.5bn loan program. An IMF monitoring mission was initially expected to arrive on Oct 26 but the Washington-based fund postponed the trip until early November. Kyiv is hoping to get an additional USD 1.3bn before the end of 2016.The UX index gained 1.2% to close at 839 points on Friday (Oct 28), with the indicator once again facing 840 points as a resistance line from the chart point of view. CentrEnergo (CEEN) was the main blue chip winner over the week, rising 5.9% to UAH 11.00. The company posted a solid UAH 1.0bn in net profit for 9M16, raising suspicions that the government is pumping up the company’s results in order to receive a higher valuation at next year’s privatization. Motor Sich (MSICH) continued to trade slightly above UAH 1900 as the company’s earnings report for 3Q16 confirmed the trend of decreasing revenue due to limited access to the Russian market. London-listed Ferrexpo (FXPO) rallied to GBp 127 at mid-week but slid back to GBp 104 after the company’s second-largest shareholder suddenly unloaded about half of its 23% stake at a price of GBp 110. MHP (MHPC) moved up 3.7% to USD 9.70 after the company published an encouraging operational update for 3Q. In Warsaw, Kernel (KER) climbed above the PLN 60 level, adding 3.4% to PLN 61.90, also thanks to an upbeat quarterly operational report.
The hryvnia strengthened by 0.5% to 25.50 UAH/USD over the week.
POLITICS AND ECONOMICS
- Clinton Remains Heavy Favorite in US Race Despite “October Surprise”
STOCKS IN THE NEWS
- UkrNafta Suffers From Unspecified Operating Expenses in 9M16
-CentrEnergo Posts Solid UAH 1.0bn Profit for 9M16
-Motor Sich Sees 37% YoY Drop in Profit to UAH 600mn in 3Q16
- Kernel Boosts Grain Sales by 27% YoY in Jul-Sept
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