The UX index basket stocks finished mixed last week, with a clearly positive statement from Prime Minister Dennis Shmygal regarding his intention to launch the second level pension system in the country being generally ignored by the market. Although the second level pension system, which is an individual one compared to the existing solidarity pension system, should bring in fresh funds to the stock market, there is still a lot of skepticism about the announced timing of the pension reform, as it has been repeatedly postponed for several years.
The UX index declined by 3.4% to 1834 points, dragged down by a 6.8% correction in UkrNafta (UNAF) to UAH 259 per share. The company has still not unveiled its 4Q20 earnings results. It is expected that UkrNafta’s net profit in 4Q20 was very large due to a settlement with its state-owned parent NaftoGaz. It is quite possible that UkrNafta could declare a dividend from last year’s profit, and the dividend from the FY18 net profit of UAH 119 per share. As a majority state owned company, UkrNafta was obligated to declare a 90% dividend payout from FY18 net profit. This means that there is a chance of a dividend of UAH 107 per share that UkrNafta might declare at the next shareholders meeting. On the other hand, the Ukrainian government has often declined to enforce the dividend policy prescribed for state-owned entities in regard to UkrNafta.
On the upside, DonbasEnergo (DOEN) surged by 15% to UAH 25.00 after the company proposed an additional dividend of UAH 2.64 per share from its FY18 net profit.
In London, Ferrexpo (FXPO) bounced back by 2.5% to GBp 364 as the benchmark iron ore price remained strong, hovering at USD 170 per tonne. Meanwhile, MHP (MHPC) demonstrated further weakness, shedding 1.5% to USD 5.32 per share.
Ukrainian stocks listed in Warsaw were broadly lower over the week, with Kernel (KER) declining 2.5% to PLN 53.60. Astarta (AST) and Agroton (AGT) dropped by 8.2% and 9.5% to PLN 38.50 and PLN 5.94 per share respectively.
The hryvnia strengthened by 0.4% to 27.93 UAH/USD after the National Bank reported that its foreign reserves had decreased by only slightly more than USD 1bn, to USD 27.0bn, despite a large USD 1.8bn payment to service the country’s foreign debt in March.
POLITICS AND ECONOMICS
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