Kyiv-listed Ukrainian stocks enjoyed a convincing advance last week ahead of the publication of companies’ 2Q17 financial results. The earnings season is expected to be good for most domestic blue chips. In particular, the Ukrainian banking association said that Raiffeisen Bank Aval (BAVL) posted EPS of 3.66 kopecks in 5M17, which suggests that the 2Q17 EPS could reach 2 kopecks after the 1Q EPS of 2.36 kopecks. The BAVL stock jumped 12% to 25.30 kopecks after the news. There are also expectations that Motor Sich (MSICH) will report a strong profit of UAH 700mn for 2Q, and the MSICH stock rose 3.1% to UAH 2450 per share after a contraction over preceding week.
In IMF program related news, Fund spokesman William Murray said that pension reform, privatization and the fight against corruption remain key requirements for the disbursement of the fifth tranche of USD 1.9bn to Ukraine.
On the macroeconomic front, UkrStart released a surprisingly high figure for retail sales growth in 1H17 (+7.3% YoY). The latest data includes a 9.0% YoY retail sales increase for June alone.
The UX index climbed to a two-year high, gaining 3.9% to 1081 points. Although trading volume was still rather low, buying momentum could turn into more sustainable upward trend in the medium term. Electricity stocks CentrEnergo (CEEN) and DonbasEnergo (DOEN) picked up 2.5% and 3.7% respectively, with the former closing at UAH 10.75.
In London trading, the stock of poultry producer MHP (MHP) did not react to the company’s operating update, which confirmed an increase in export sales. The stock remained at its level of the past several months just above USD 10. Warsaw-listed Ukrainian names were moderately lower, with Kernel (KER) and Ovostar (OVO) declining by 1.6% and 3.0% respectively.
On the interbank currency market, the hryvnia gained 0.5% to close at 25.88 UAH/USD amid broad weakness of the dollar against other major currencies.
POLITICS AND ECONOMICS
- NATO Holds Black Sea Drills as Poroshenko Touts NATO MAP
STOCKS IN THE NEWS
- Kernel Increases Output in All Key Segments in Mar-Jun Quarter
- MHP Poultry Sales Up 11% YoY to 157,000 tonnes in 2Q17
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