Ukraine’s small
domestic equity market extended its impressive 2017 rally last week as
disbursement of the fourth loan tranche from the IMF was a clearly positive
event for the country. The econometric analysis prepared by the
Washington-based institution once again pointed out that reducing corruption
could substantially contribute to speeding up the Ukrainian economy. If the
country is unable to lower corruption, per capita GDP will still be only about
30% of the EU average in 2040, the IMF estimated in a grandiose long-term
forecast. Separately, the IMF commented that the previous week’s UK court
ruling repudiating Kyiv’s position on Russia’s lawsuit regarding USD 3bn
in overdue bond debt will have no effect on the IMF program.
The UX index
picked up 2.9% to close at 1072 points. Raiffeisen Bank Aval (BAVL) added 5.0%
to 25.20 kopecks, with the stock now having doubled in value since the start of
the year thanks largely to the bank’s plan to pay a 5.90-kopeck dividend.
UkrNafta (UNAF) jumped 6.1% to UAH 135 per share after the company’s board announced
a general shareholder meeting for May 18. Traders took the announcement as a
signal that the government and private shareholders are having a constructive
dialogue in their ongoing corporate conflict. Motor Sich (MSICH) underperformed
the market, edging up by just 0.7% to UAH 2237.
In London,
poultry giant MHP (MHPC) was little-changed at the USD 10.00 level.
Ferrexpo (FXPO) also saw rather light activity relative to its historical high
volatility, shedding 0.7% to GBp 167 per share. Warsaw-listed Kernel (KER)
declined by 3.5% to PLN 69.00 as investors were unable to evaluate the news
that the company is in talks to acquire UAI Holding, which has a
240,000-hectare land bank. The deal would make Kernel the largest land operator
in Ukraine with a total land bank of near 700,000 ha.
On the currency front, the hryvnia inched
up 0.4% to 26.95 UAH/USD after the NBU said its foreign reserves had increased
to USD 16.7bn thanks to the arrival of IMF and EU aid.
POLITICS AND ECONOMICS
- NBU Calls on Law Enforcement to Act Against
‘People’s Corpus’ Bank Vandals
- IMF Board Approves USD 1bn Tranche; Sees Little
Impact from Donbass Blockade
- Western Aid Boosts NBU Reserves by USD 1.6bn to USD
16.7bn
full report
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