Kyiv-listed equities finished mixed last week, driven by corporate factors. Market participants continued to focus on information regarding the planned split of UkrNafta’s assets. Bad news was that the company set its buy-back price for shareholders who vote against the company’s split at UAH 259.77 per share. However, the good news is that the planned split is likely to be rejected by the government. We expect that UkrNafta’s shareholder meeting scheduled on Nov 30 will be unable to pass the vote on the company’s asset split. The UNAF stock rose by 3.7% to UAH 280.
In other major domestic developments, the IMF approved a long-delayed USD 700mn loan disbursement to the country. This is the second tranche from a USD 5bn program agreed in the spring of 2020 to help Ukraine cope with the COVID pandemic. Multibillion-dollar financial support from the IMF, World Bank and other international financial institutions, as well as the US and EU, has been critical to shoring up Ukraine as the country had a budget deficit of 5.8% of GDP in 2020, has an expected budget deficit of 4.9% of GDP for this year, and 3.5% deficit projected for 2022. In absolute figures, the budget deficit for 2022 is some USD 6.5bn.
On the downside, CentrEnergo (CEEN) slipped by 2.4% to UAH 8.30 as the coal shortage in the country remained a risk for the thermal electricity industry. Raiffeisen Bank (BAVL) declined by 1.1% to 44.00 amid overall negative market momentum.
Ukrainian stocks listed abroad were caught in a sell-off following the turmoil on the global financial market due to fears over a new highly mutated variant of COVID-19. In London trading, MHP (MHPC) fell 3.9% to USD 7.30 and Ferrexpo (FXPO) slid 5.1% to USD 273 per share. Warsaw-listed Kernel (KER) lost 7.0% to PLN 54.70 despite the company’s report of an enormous net profit of USD 211mn for the Jul-Sept quarter, implying an impressive EPS of PLN 10.9.
The hryvnia weakened by significant 2.1% to 27.14 UAH/USD, which was largely a result of the general trend of the dollar’s gain against other world currencies amid the market turbulence.
POLITICS AND ECONOMICS
- Zelenskiy-Akhmetov Conflict Takes Center Stage in Ukrainian Politics
- Ukraine Industrial Production Up 1.4% YoY in October on Energy Output Rise
STOCKS IN THE NEWS
- Kernel Posts Enormous USD 211mn Profit for Jul-Sept Quarter
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