Equity
Kyiv-listed equities ended lower last week as traders took advantage of a holiday-shortened trading week to pause and take some profits after the local market’s strong start to 2017. The Women’s Day observance, which is one of the biggest holidays of the year in Ukraine, fell right in the middle of the week on Wednesday (Mar 8). The UX index has risen by 18% since the start of the year, outperforming the MSCI Emerging Markets index by 11 percentage points. In economic news, UkrStat reported 1.0% MoM inflation for February, which somewhat exceeded our projections. This means the NBU is unlikely to cut its key interest rate until May at the soonest, if and when headline inflation drops below 12%.
The UX index lost 1.6%, finishing at 941 points. UkrNafta (UNAF) slid 3.3% to UAH 133 per share amid a rough week for global oil prices, which dropped below the USD 50 support level for the first time in 2017. Meanwhile, the State Fiscal Service remained silent about whether it will allow UkrNafta to apply natural gas inventories confiscated by the government during 2006 as credits for unpaid production rent. CentrEnergo (CEEN) fell 2.5% to UAH 11.14 after the Energy Ministry (which owns a 78% stake) said it expects the company to earn much less this year than in relatively successful 2016. On the other hand, CentrEnergo outperformed the Ministry’s plan in 2016, and we do not rule out that it could happen again this year. Motor Sich (MSICH) had a tiny decline of 0.1% following the general market trend.
In London, Ferrexpo (FXPO) lost 6.6% to GBp 147 in line with a firm correction in iron ore prices. MHP (MHPC) was rather inactive but shed 2.6% to USD 9.25 per share. In Warsaw trading, Ukrainian stocks were broadly lower. Kernel (KER) sold off by 4.6% to PLN 73.50 and Astarta (AST) fell 1.5% to PLN 67.00.
On the currency market, the hryvnia gained 1.3% against the dollar to close at 26.75 UAH/USD amid positive news about the imminent arrival of USD 1bn in fresh IMF loan money. The NBU once again exploited the situation to purchase foreign currency and add to its reserves.
POLITICS AND ECONOMICS
- Groysman Implies Moscow is Behind “Pro-Ukrainian” Donbass Blockade
- UkrStat: February CPI Inflation Was Moderate at 1.0% MoM
STOCKS IN THE NEWS
- Motor Sich’s FY16 Net Profit Down 36% YoY to UAH 1050 per Share
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