Locally-listed Ukrainian equities were mostly lower last week as the privatizations of the state’s blocking stakes in electricity companies attracted no interest from foreign investors. Auctions for blocking 25% stakes in SumyOblEnergo (SOEN), OdessaOblEnergo (SOEN), and DonbasEnergo (DOEN) were cancelled with no bids submitted. The State Property Fund was able to unload its 25% stakes in DonetskOblEnergo (DOON), KyivEneergo (KIEN) and ZakhidEnergo (ZAEN) to the majority owner of all three companies, the SCM group. Only the auction for ZakhidEnegro showed any real action, with the final price for the stake coming in at UAH 130 per share, or 20% above the starting price. SCM owns its majority stakes in the companies through its DTEK Holding. We assume that DTEK intends to de-list all three companies from Ukrainian Exchange. We expect minority shareholders to receive the opportunity to sell their shares back to DTEK in case they vote against the de-listing at corresponding shareholder meetings.
The UX index lost 0.2%, closing at 1125 points on Friday (Aug 18). Motor Sich (MSICH) finished in the black, adding 0.6% to UAH 2507 per share on information that the company will start full production of its own light passenger helicopters in 2018. UkrNafta (UNAF) continued to suffer from uncertainty about the fate of its production licenses, falling 2.6% to UAH 123 per share. Raiffeisen Bank Aval (BAVL) saw a minor correction after its bullish run over last several weeks, ending at 27.25 kopecks.
In London trading, MHP (MHPC) gained 5.0% to USD 10.30 after the company reported impressive USD 1.99 earnings per share for 1H17. Ferrexpo (FXPO) continued to benefit from rising iron ore prices, advancing 8.0% to GBp 275. In Warsaw, top liquid name Kernel (KER) shed 3.0% to PLN 61.00.
On the domestic currency market, the hryvnia remained in firm territory, gaining 0.7% to 25.50 UAH/USD, bringing its year-to-date appreciation against the dollar to 6.6%.
POLITICS AND ECONOMICS
- Poroshenko to Investigate Korea Missile Allegation
- Ukraine’s GDP Growth Steady in 2Q at 2.5% YoY
STOCKS IN THE NEWS
- MHP Nearly Doubles 1H17 Net Profit to USD 1.99 per Share
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