Ukrainian equities were on the rise last week, boosted by better-than- expected earnings results and a global rally in commodities, including iron ore and steel. Additional positive background was provided by preliminary data that said the Ukrainian economy grew by 2.5% YoY in 1H17.
The UX index advanced by 3.7% to 1121 points, its highest level since early 2015. Electricity stocks CentrEnergo (CEEN) and DonbasEnergo (DOEN) outperformed the market. CentrEnergo (CEEN) added 7.0% to UAH 11.50 after the company posted an impressive UAH 5.47 earnings per share for 1H17. DonbasEnergo (DOEN) has not published its 2Q17 report, but the stock surged by 12% to UAH 14.50 on news that the State Property Fund (SPF) will conduct an auction for the sale of a 25% stake in the company with a starting price of UAH 113 per share. We think that the SPF has overestimated DonbasEnergo’s fair value, given that the company’s most valuable asset, the Starobeshivska power plant, has been seized by pro-Russian separatists. Meanwhile, UkrNafta (UNAF) had a rather muted reaction to news that the company posted EPS of UAH 23 for 2Q17. The stock edged up 1.1% to UAH 127 per share.
In London trading, Ferrexpo (FXPO) enjoyed a rebound in iron ore prices, which topped USD 70 per tonne, with the stock rallying by 7.5% to GBp 232. Warsaw-listed Ukrainian names were mixed, with Kernel (KER) declining 1.7% to PLN 63.80 and Astarta (AST) picking up 6.1% to PLN 69.00 after a report that the company’s sugar sales volume increased by 8% YoY in 2Q17.
On the currency front, the hryvnia inched down 0.2% to close at 25.93 UAH/USD. The National Bank said it did not intervene in the market over the week.
POLITICS AND ECONOMICS
- Saakashvili: Poroshenko, Avakov Split Ukraine Among Themselves
- June Industrial Output Grew 3.8% YoY On Machinery Sector Recovery
STOCKS IN THE NEWS
- Motor Sich 1H Profit Jumps 78% YoY to UAH 1100 Per Share
- CentrEnergo Profit Surges 3-Fold to UAH 1.2bn in 2Q17
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