Ukraine’s PFTS equity index remained in a sideways local trend last week, edging down by 0.9% to 540 points. The political and geopolitical news flow had a noticeable impact on local traders’ sentiments. The Ukraine-Russia relationship saw an additional line of confrontation after Ukraine’s Security Service (SBU) seized a Russian tanker that Moscow allegedly used to block three Ukrainian naval vessels before detaining them and 24 Ukrainian sailors in November near Crimea. Russia’s Foreign Ministry said it was currently investigating the incident and warned Kyiv of a harsh response.
In the individual PFTS index basket names, DonbassEnergo (DOEN) slumped by 6.1% to UAH 23.72 per share after the company decided to sign an exclusive contract to sell electricity to a trading entity controlled by DOEN’s majority shareholder. We assume that this transfer pricing deal could limit DonbassEnergo’s profitability. Minority shareholders that voted against the deal at the extraordinary shareholder meeting on Jul 26 will have the option to sell off their DOEN shares at UAH 28.92. Raiffeisen Bank Aval (BAVL) rose 1.0% to 30.70 kopecks while CentrEnergo (CEEN) and UkrNafta (UNAF) declined by 2.1% and 5.9% respectively, with the latter closing at UAH 160.
In London trading, Ferrexpo (FXPO) corrected by 2.3% to GBp 260 while benchmark iron ore prices appeared to consolidate near USD 120/tonne after their stunning 40% rise since mid-April. Poultry producer MHP (MHPC) slipped 1.6% to USD 9.94 amid fears that the company might be facing a serious confrontation with Ukraine’s new government over previously received state subsidies.
Warsaw-listed agro names were mixed, with Kernel (KER) dropping by 3.3% to PLN 48.95 while Astarta (AST) advanced by 2.9% to PLN 24.50 per share after the company reported an encouraging operating update for 2Q19. In particular, Astarta increased its sugar sales volume by 8% YoY in the period.
On the currency front, the hryvnia remained strong, gaining 1.4% against the dollar to 25.38 UAH/USD.
POLITICS AND ECONOMICS
- Zelenskiy Attacks Klitschko in Power Play for Control of Capital
- Ukraine’s Industrial Production Contracts by 2.3% YoY in June
STOCKS IN THE NEWS
- UkrNafta Raises Oil Output by 6.3% YoY to 5.5mn Barrels in 1H19
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