Equity
Kyiv-listed Ukrainian equities rallied sharply last week, buoyed by news from the IMF that the board of directors will consider Ukraine’s program review today (Apr 3). The review had been abruptly cancelled on Mar 20 after Kyiv launched an official trade blockade of the occupied Donbass territories, but the quick rescheduling has provided important assurance that the program remains on track. Meanwhile, there was negative but not surprising news that Ukraine lost its case against Russia in the UK High Court in regard to non-payment of a USD 3bn Eurobond case due in late 2015. The judge rejected all defenses of Ukraine, including the Kremlin’s political pressure on the country. However, Ukraine still has immunity to cross-default despite non-payment on the so-called Russian debt after restructuring all of its outstanding commercial debt in late 2015 with a clause that a default on the Russian debt will not be considered as a default event.
The UX index jumped by 7.6%, climbing above the 1000 psychological level for the first time in 18 months and closing at 1042 points on Friday (Mar 31). Raiffeisen Bank Aval (BAVL) was the star performer for the second week in a row thanks to its announcement of a hefty dividend. The stock shot up another 20% to 24.00 kopecks per share. UkrNafta (UNAF) gained 1.9% to UAH 127 after the company managed to sell its oil at the March auction after unsuccessful auctions in January and February. Motor Sich (MSICH) added 2.0% to UAH 2220 after the company approved a modest UAH 30 per share dividend.
In London, poultry producer MHP (MHPC) did not react to news that the company has established a small processing plant on EU territory in Slovakia, closing flat at USD 9.85 per share. Warsaw-listed Astarta (AST) edged down 0.7% to PLN 66.80, as investors were unimpressed by the company’s bullish development plan, which foresees near USD 100mn in CapEx this year after CapEx of USD 40mn in 2016.
The hryvnia strengthened by 0.3%, ending at 27.09 UAH/USD, after the NBU reported that the country’s current account deficit decreased by 20% YoY to USD 400mn in February.
POLITICS AND ECONOMICS
- Ukraine Loses UK Court Case Over USD 3bn Russian Debt
STOCKS IN THE NEWS
- Avangard Improves EBITDA in 4Q16 to USD 11mn
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