Most Kyiv-listed stocks finished lower last week, with the PFTS index falling by 2.4% to 515 points, which is the benchmark’s lowest level in 13 months. Information that an IMF mission arrived in Kyiv and started talks on a new cooperation program for Ukraine failed to inspire local investors. Fighting corruption will be a key component of any new lending program Ukraine gets with the IMF, the organization’s official spokesman said in a Sept 12 briefing in Washington. The country has a tough debt repayment schedule for 2020-2022 and therefore has a pressing need to replace the current USD 3.9bn standby arrangement with the IMF, which expires at the end of the year, with a longer-term program.
In the PFTS index basket, CentrEnergo (CEEN) was the worst-performing component, dropping by 6.9% to UAH 10.11 per share after a Kyiv court reopened an old case regarding the company’s non-payment for coal that it received back in 2004. We doubt that the case has any prospects, but taking into account the condition of the country’s justice system, the news was clearly negative for CentrEnergo. Raiffeisen Bank Aval (BAVL) slipped 1.3% to 30.60 kopecks, while on the other end of the curve, DonbassEnergo (DOEN) gained 2.0% to UAH 24.55.
London-listed poultry producer MHP (MHPC) remained on the downslope, sliding 7.0% to USD 8.56, which is the stock’s lowest level since March 2016. We assume that some investors dumped the stock after the company attracted USD 350mn in additional debt in the form of 10-year Eurobonds at 6.25%. Although the funds will be used to refinance existing bonds maturing in 2020, there are still concerns that MHP’s debt-to- EBITDA ratio could cross the ceiling of 3.0x by the year-end. Iron ore giant Ferrexpo (FXPO) recovered a small portion of its recent losses, advancing by 6.3% to GBp 204 per share.
Warsaw-listed Ukrainian agro stocks demonstrated a general decline last week. Astarta (AST) shed 1.7% to close at PLN 22.90 and Kernel (KER) dropped by 2.8% to PLN 43.75.
On the currency market, the hryvnia smashed through the 25 UAH/USD resistance line, strengthening by 1.1% to 24.80 UAH/USD. This is the best rate for the national currency against the dollar since July 2016.
POLITICS AND ECONOMICS
- Zelenskiy Praises Trump for Releasing USD 250mn in Military Aid, Calls Russian Sanctions a “Peace Tax”
- Ukraine Upgraded to B from B- by Fitch with Positive Outlook
- CPI Declines by 0.3% MoM in August, Slowing 12M Inflation to 8.8%
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