Equity
Ukrainian stocks listed in Kyiv had a nervous trading week amid the first major escalation of the Donbass military situation in more than a year. Heavy artillery and rockets hit residential areas in the city of Avdyivka, which is on the Ukrainian side of the line and where a strategically important plant for the country’s steel sector is located. The two sides blamed each other for the spike in hostilities. A separate new problem in regard to the conflict zone also emerged when militant Ukrainian groups, including MPs, conducted an unauthorized blockade of a railway line used for transporting cargo to and from the occupied territories. Ukraine’s government still has to rely on coal extracted on the territories, as there is no short-term technical means to switch the entire power generation sector to run on imported coal.
Although the negative news flow hit blue chip quotes in the first half of the week, they then recovered after a lull in fighting in the Donbass was announced. The UX index edged up 0.6% for the week to close at 865 points. Motor Sich (MSICH) approached a strong resistance level of UAH 2000, gaining 1.6% and closing at UAH 1995. A surprise move occurred in low-liquidity DonbasEnergo (DOEN), which rose 5.3% to UAH 12.90. UkrNafta (UNAF) picked up 2.7% to UAH 115 per share as the company’s management promised to stabilize oil and gas output after years of declines.
In London trading, MHP (MHPC) did not react to news that the company resumed its poultry exports to the EU after 2-month interruption. The stock ended flat at USD 8.95 per share. Ferrexpo (FXPO) extended its rally, gaining 7.0% to GBp 153, as iron ore spot prices have reached USD 83/tonne. Warsaw-listed Agroton (AGT) fell 12% to PLN 5.60 on profit taking after a big jump in January.
On the currency front, the hryvnia was stable against the dollar, inching up by 0.2% to 27.10 UAH/USD.
POLITICS AND ECONOMICS
- Trump’s UN Rep Talks Tough on Russia Sanctions; Avdyivka, Donetsk Suffer from Shelling
- NBU: Balance of Payment Surplus Was USD 1.3bn in 2016
STOCKS IN THE NEWS
- UkrNafta’s FY16 Oil Output Down 9% YoY to 11mn Barrels
- Agroton Asks Bondholders to Postpone Coupon Payments to 2018
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