Kyiv-listed stocks demonstrated a moderate rise last week, with a report that the country’s economy grew by 3.1% YoY in 1Q18 spurring some buying activity. On the other hand, investors remain unconvinced about Ukraine’s ability to deliver really strong GDP growth, as painful structural reform implementation is slowing down amid flourish of populist messages from key politicians. The resurgence of former Prime Minister Yulia Tymoshenko, who is one of the champions of Ukrainian populism, is considered as quite a worrying sign ahead of next year’s presidential election. Tymoshenko and other nominally pro-Western populist politicians often employ anti-Western and anti-IMF rhetoric when arguing for economic nationalism. We believe that without direct Western support it would be difficult for Ukraine to solve the country’s historical current account deficit which needs to be compensated by investments and borrowings from abroad.
The UX index managed to climbed 1.5% to close at 1841 points on Friday (May 18). The gauge now sees the 1850 points line as a strong resistance level from the chart perspective. We think there is a high probability that UX index won’t break the 1850 point line in the short term, as the ex-rights date for CentrEnergo’s dividend will cause a correction in the CEEN stock, which accounts for a 27.5% weight in the index basket. The stock rose by 8.1% to UAH 23.00 ahead of the May 22 ex-rights date for a per-share dividend of UAH 3.84 from FY17 profit. Raiffeisen Bank Aval (BAVL) sank 2.9% to 33.40 kopecks, while UkrNafta (UNAF) declined by 1.3% to UAH 114, ignoring the rising oil price trend. Motor Sich’s (MSICH) stock remained frozen with no announcement on when the stock circulation might be resumed.
London-listed Ferrexpo (FXPO) declined by 2.2% to GBp 235 while MHP (MHPC) advanced by 2.6% to USD 13.90 per share. Warsaw-listed Astarta (AST) extended its losing streak falling 6.3% to PLN 41.60. Kernel (KER) grew by 1.5% to PLN 53.50.
On the currency front, the hryvnia gained 0.3% against the dollar to close at 26.13 UAH/USD.
Ukraine’s GDP Growth Accelerates to 3.1% YoY in 1Q18
full report
Eavex Capital welcomes any questions or comments you may have regarding our research products.
Please contact our office in Kyiv at 380-44-590-5454, or by email:
Alexander Klymchuk, Head of Sales, a.klymchuk@eavex.com.ua
Dmitry Churin, Head of Research, d.churin@eavex.com.ua
