Kyiv-listed stocks were pushed down last week after a highly-publicized search conducted by the Ukrainian Security Service (SBU) at the offices of the country’s largest securities brokerage firm. The surprise search was officially linked to Russian-made employee tracking software that the SBU said can be used for illegal spying purposes. The brokerage firm accused the SBU of acting at the behest of a top ally of President Poroshenko, Oleksandr Granovskiy, with whom the firm is engaged in a long-running dispute over the ownership of one of the country’s largest shopping malls. The incident received wide public discussion in the media, with Prime Minister Volodymir Groysman asking for a full explanation of the search.
Trading on the Ukrainian Exchange was highly volatile ahead of the May holiday period, which sees Ukrainians receive two days off for Labor Day and another for Victory Day. The holidays will limit market liquidity until the second half of the month. The UX index finished the last week of April with a loss of 0.4%, closing at 1022 points on Friday (Apr 28). UkrNafta (UNAF) continued to disappoint, falling below its historically significant support level of UAH 100 per share. The stock fell 3.9% to UAH 99. Shares of CentrEnergo (CEEN) fell to the UAH 10.00 level before bouncing back to UAH 10.65, boosted by an impressive and unexpectedly high net profit of UAH 2.30 per share for 1Q17. Raiffeisen Bank Aval (BAVL) slipped 0.5% to 25.60 kopecks, but remains in an overall upward trend.
In London, Ferrexpo (FXPO) recovered 7.9% after its recent slump, closing at GBp 158 per share. MHP’s (MHPC) stock did not react to news that the company placed a new USD 500mn Eurobond with maturity in 2024 at just 7.75% - a full percentage point below the sovereign yield curve. The Donbass success story of Warsaw-listed Agroton (AGT) continued, with the issue gaining 5.5% to PLN 7.30 after the company posted net profit of USD 21.8mn for FY16, representing PLN 4.00 per share. Astarta (AST) picked up 7.1% to PLN 72.00 after reporting that its sugar sales volume jumped 2.2x YoY in 1Q17.
On the currency front, the hryvnia gained another 0.5% to 26.58 UAH/USD, with the seasonal end to natural gas imports probably playing a role in the strengthening of the Ukrainian currency.
POLITICS AND ECONOMICS
- Industrial Output Down 0.7% YoY in 1Q Amid Donbass Blockade
STOCKS IN THE NEWS
- Raiffeisen Aval Approves 5.90-Kopeck Dividend for FY16
- CentrEnergo Downgrades FY16 Dividend to 52 Kopecks from Expected 85
- CentrEnergo Beats Expectations Posting UAH 850mn Profit in 1Q17
full report
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