Kyiv-listed stocks continued their growth last week after the World Bank improved its forecast for Ukraine’s medium-term GDP growth to 3.5% (from 3%) in 2019 and to 4% (also from 3%) in 2019, endorsing the Ukrainian government’s stabilization efforts. However, the cargo blockade of the Donbass separatist-occupied territories remains a clear risk to near-term economic growth for the country.
The UX index advanced by 1.7% to 1020 points over the week, having seen almost uninterrupted growth since late May. Electricity stocks were the best performers after President Poroshenko signed a new law liberalizing the electricity market. The law is aimed at fulfilling Ukraine’s obligations to the European Energy Community and the Association Agreement between Ukraine and the European Union. CentrEnergo (CEEN) and DonbasEnergo (DOEN) rose by 3.6% and 2.0% respectively, with the former closing at UAH 10.80 per share. Motor Sich (MSICH) added 4.0% to UAH 2430 and Raiffeisen Bank Aval (BAVL) was flat at 21.80 kopecks.
In London trading, iron ore producer Ferrexpo (FXPO) reached a new 3-year maximum, gaining 12.8% to GBp 195 per share, as investors appear to have positively recalibrated the political risks facing majority owner Constantine Zhevago. Meanwhile, MHP (MHPC) remained inactive at USD 10.20. Warsaw-listed agro major Kernel (KER) edged up 1.0%, with the stock ignoring confirmation that the group has increased its land bank by a massive 190,000 hectares via a major acquisition. Low-liquidity name Ovostar (OVO) climbed above the PLN 100 line, adding 6.1% to close at PLN 105 per share.
On the interbank currency market, the hryvnia gained 0.5% to 26.15 UAH/USD after the National Bank reported that the country’s foreign currency reserves increased by USD 440mn to USD 17.6bn.
POLITICS AND ECONOMICS
- 1,300 Ukrainians Enter EU Visa-Free on First Day of Regime
- NBU Reserves Rose USD 440mn to USD 17.6bn in May
STOCKS IN THE NEWS
- CentrEnergo May Get USD 40mn from Japan for Tripilska Plant
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