Ukrainian stocks listed in Kyiv had another week of mixed results, although the UX index maintained its broad upward trend, climbing above the strong technical resistance level of 1500 points. Last week Ukraine passed the 4-year mark after the EuroMaidan revolution. While President Poroshenko and his government has implemented serious reforms since then, they have failed to deliver on measures such as land privatization and full liberalization of energy prices, and the IMF’s program has disbursed no money for 10 months. The IMF has recently focused in particular on establishing a special court to try corruption cases.
The UX index gained 2.3% over the week to close at 1495 points, but the performance was distorted by an 16% jump in low-liquidity DonbassEnergo (DOEN). We assume this growth was driven by some market player’s attempt to pump up the UX index futures. Raiffeisen Bank Aval (BAVL) remained the primary focus of investors, with the stock advancing by 2.5% to 32.80 kopecks as its current P/E of 4.5x still looks attractive. Motor Sich (MSICH) underperformed the gauge, edging down by 0.1% to UAH 4370 per share.
London-listed JKX Oil&Gas (JKX) fell 6.8% to GBp 20.50 after the company revised its reserves estimate downward by 13% YoY due to difficulties with extraction in Ukraine. Poultry producer MHP (MHPC) declined by 2.5% to USD 13.50 per share while iron ore giant Ferrexpo (FXPO) added 3.0% to GBp 305.
In Warsaw trading, sporadically-traded Agroton (AGT) enjoyed a gain of 25% to PLN 6.00 on top of its advance of 10% over the preceding week. Kernel (KER) added 0.8% to PLN 47.80 ahead of the company’s financial report due for release on Feb 28.
The hryvnia demonstrated only minor fluctuations in a very tight range near 27.00 UAH/USD, with the NBU due to meet on its key refinancing rate on Thursday (Mar 1). We expect the rate to be cut by 0.5p.p. to 15.50% as inflation pressure eases in the country.
POLITICS AND ECONOMICS
- Poll Claims Tymoshenko Leads Poroshenko in Head-to-Head Matchup
- Industrial Output Rises 3.6% YoY in January Beating Expectations
STOCKS IN THE NEWS
-JKX Writes Down 13% of Its 2P Reserves After Fracturing Failure
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