Ukrainian equities did not escape a broad correction in global stock markets last week triggered by intensified tensions between the US and North Korea that sent the main equity indices into decline for five days in a row.
In Ukrainian internal developments, the National Bank launched a public consultation on the legislative amendments required for foreign currency market liberalization. The new model of currency regulation should make the repatriation of capital easier for foreign investors. Ukraine’s capital controls, which were imposed back in the crisis period of 2014, are due to be relaxed in a gradual manner, although no exact timing was announced.
The UX index shed by 1.0% to 1128 points on light trading activity in the heart of the summer vacation period. The best performer among the five UX blue chips was Raiffeisen Bank Aval (BAVL), which reached 27 kopecks after the bank reported 1H17 earnings per share of 4.45 kopecks in late July. Electricity stocks were mixed last week, with CentrEnergo (CEEN) edging down by 0.3% to UAH 11.47 while low-liquidity DonbassEnergo (DOEN) added 3.9% to UAH 14.85. UkrNafta (UNAF) was the main drag on the index, losing 3.4% to close at UAH 126 per share.
In London trading, Ukraine-focused JKX Oil&Gas (JKX) fell to a 52-week low of GBp 13.50 after the company reported a 16.5% YoY drop in daily average production across all the countries of its presence in 7M17. Ferrexpo (FXPO) remained in a firm upward trend, gaining 2.6% to GBp 254. Warsaw-listed Kernel (KER), Ukraine’s largest agro group, edged up 0.7% to PLN 63.00, and Astarta (AST) advanced by 1.6% to PLN 65.80.
The hryvnia continued to strengthen, with the Ukrainian currency picking up 0.6% over the week to 25.68 UAH/USD. The National Bank reported that the country’s foreign reserves were essentially unchanged in July at USD 17.8bn, a figure that is sufficient to cover 3.6 months of the county’s future imports.
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