Ukraine’s domestic equity market took a beating last week amid rising political risks set in motion by the shock defeat of establishment candidate Hillary Clinton in the US presidential election earlier this month. Batkivschyna opposition party leader Yulia Tymoshenko appeared to be using the situation by backing Tuesday’s (Nov 15) large anti-government protest in central Kyiv, which was aimed against National Bank chief Valeria Gontareva as well as the country’s IMF-mandated market reforms. Although the aggressive protest involving several thousand people at the NBU’s headquarters in Kyiv was dismissed by the government as a “paid-for” rally, the events were widely covered on national television, with some local analysts opining that this was a program masterminded by Moscow. Main streets in central Kyiv were closed due to security concerns.
The UX index lost 3.9% to close at 805 points, with the gauge briefly dipping below 800 level during the week. The index’s most liquid stock, CentrEnergo (CEEN), fell 2.8% to UAH 10.60 and Motor Sich (MSICH) slipped 2.0% to UAH 1871. Among stocks moving on corporate news, UkrNafta (UNAF) tumbled 4.7% to UAH 110 after the company warned that it could slash its oil extraction by 15% in 2017 due to what it called an excessively high production tax.
In London, Ferrexpo (FXPO) added 1.4% to GBp 112 while MHP (MHPC) lost 2.1% after reporting rather unimpressive financial results for the third quarter. Warsaw-listed Ukrainian equities were also mixed in light activity, with Astarta (AST) gaining 0.9% while Ovostar (OVO) gave up 1.7% to close at PLN 88.50.
On the interbank currency market, the hryvnia lost 0.8% to finish at 25.85 UAH/USD, but the real story was in the retail cash rate, which was highly volatile amid the political turbulence and remains 5% above the interbank rate at near 27 UAH/USD.
POLITICS AND ECONOMICS
- Tymoshenko, OppoBloc Look to Exploit Anti-Reform Protests
- Ukraine Upgraded to B- by Fitch with Stable Outlook
- UkrStat: GDP Growth Accelerated to 1.8% YoY in 3Q from 1.4% in 2Q
STOCKS IN THE NEWS
- MHP Slips Into the Red for 3Q; 9M16 Revenue Flat YoY at USD 900mn
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