Equity
Kyiv-listed stocks extended their rally last week, rising to new 12-month highs not seen since late 2015. Traders were further encouraged by a report that consumer optimism in the country is at the best level since the summer 2014, before the active phase of the Donbass war. GfK Ukraine’s “Index of Economic Expectations” rose significantly in December. Meanwhile, the IMF is demanding more structural reforms from Kyiv in exchange for further loan disbursements. The tough conditions include a long-delayed reform that would allow a free market for land sales, gradual increases in the retirement age, and the phasing out of tax breaks, including a popular one for small businesses. For the moment, the IMF’s requirements look politically difficult to implement, but the USD 5.5bn Ukraine stands to receive this year may become enough to push the Volodymir Groysman-led government into bold action.
The Ukrainian Exchange’s main index surged by 4.6%, backed by solid growth in all five blue chip index components. CentrEnergo (CEEN) was the leader, advancing 6.7% to UAH 11.20 as a large buyer appeared in the stock. UkrNafta (UNAF) rose 4.3% to UAH 115 per share despite new threats that the State Geology Service is unsatisfied with some of the company’s drilling practices. Motor Sich (MSICH) added 1.9% to UAH 1960 and low-liquidity issue DonbasEnergo (DOEN) jumped 6.4% to UAH 12.30.
London-listed Ferrexpo (FXPO) was little-changed, hovering near the GBp 130 level for the third week in a row as the stock remains under profit taking pressure after its outstanding performance in 2016 that saw it return more than 400%. In Warsaw trading, Eastern Ukraine-based crop grower Agroton (AGT) resumed its run-up, gaining 20% to PLN 6.20 per share.
On the currency front, the hryvnia strengthened on the interbank exchange to 27.40 UAH/USD from 27.70 UAH/USD (+1.1%) a week earlier.
POLITICS AND ECONOMICS
- SBU Says it Foiled Russian Assassination Attempt on People’s Front MP
- Russia Sends Ukraine USD 5.3bn Bill for Unsupplied Gas
STOCKS IN THE NEWS
- JKX’s Output Up 12% YoY to Above 10,000 boepd in 2016
- Astarta Reports Sugar Export Total of 186,000 Tonnes for FY16
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