Kyiv-listed Ukrainian equities were soft amid a second consecutive week of very limited holiday trading, as Ukraine has now established an additional day off to the previously-existing May 9 Victory Day holiday, in order to observe the European date of the end of World War 2. On the other hand, there were also some actual negative drivers for local stocks. In particular, the National Bank re-calibrated the level of nonperforming loans (NPL) in the country’s banking system under a new methodology, saying that NPLs accounted for 55% of total loans as of the end of 1Q17. Loans are now considered as NPLs if the debtor has not made his scheduled payments for at least 90 days. The NBU’s previous estimate for the NPL level was substantially lower at 38%. The main takeaway from the report is that Ukrainian banks are in no condition to restore normal business loans any time soon, implying that the domestic economy will continue to experience a lack of available capital for investment.
The UX index slipped 1.1% over the week’s 3 days of trading to close at 1008 points. Four out of five index components ended in the red. UkrNafta (UNAF) was the worst performing blue chip, sliding 5.5% to UAH 99 per share after the company reported a meager UAH 71mn (USD 2.6mn) net profit for the first quarter. The only positive thing that could be said about the results was that the company did not post another USD 350mn toxic asset write-off as it did in the 4Q16 results. CentrEnergo (CEEN) shed 1.4% to UAH 10.35 after setting an ex-rights date of May 22 for its 52-kopeck per share dividend. Meanwhile, Raiffeisen Bank Aval (BAVL) set the ex-rights date for its own dividend of 5.9 kopecks as today (May 15), and the stock picked up 0.8% for the week to end at 25.90 kopecks.
In London, Ferrexpo (FXPO) showed some fresh volatility after a few rather quiet weeks, advancing by 5.5% to GBp 158 per share amid rising global commodity prices. In Warsaw, Astarta (AST) corrected by 4.6% to PLN 68.70 as investors appeared to be unimpressed by 1Q financial results showing that the sugar group’s net profit rose by 64% to EUR 31mn (the EBITDA rise was only 2%). Indeed, the AST share price invites a high standard of justification after jumping by 27% YtD.
The hryvnia inched up 0.1% against the dollar last week to close at 26.47 UAH/USD.
POLITICS AND ECONOMICS
- Poroshenko: “Too Early” To Talk About 2nd Term Candidacy
- 12M Inflation Slows to 12% in April Despite 0.9% MoM CPI Rise
STOCKS IN THE NEWS
- UkrNafta Reports Weak EPS of UAH 1.31 for 1Q17
- Astarta Boosts 1Q Net Profit by 64% YoY to EUR 31mn
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