It was an active week on the Ukrainian Stock Exchange amid positive news that Parliament finally adopted a long-awaited pension reform bill, proving that the reform agenda in Ukraine is still alive and well despite slower-than-hoped-for progress. Although it is not yet clear if the approved pension overhaul meets all the requirements of the IMF, heavy opposition from Ukraine’s irresponsible populist parties indicates that tough but necessary measures have been included. Of course, it should be stressed that the pension reform looks like the easiest target in political terms of the key reform triad that also includes heating tariff increases and lifting the country’s prohibition on farmland sales. President Poroshenko now looks likely to prioritize his immediate political interests over long-term reform goals ahead of his expected reelection campaign.
The UX index advanced by 2.8% to close at 1218 points. UkrNafta (UNAF) was highly volatile, reaching the UAH 150 level but then declining under profit taking back to UAH 146 and ending with a 3.3% rise for the week. The company resumed oil & gas extraction on 9 fields after their production license restoration. Motor Sich (MSICH) picked up 1.5% to finish at UAH 2945 but faces a strong technical resistance barrier at the UAH 3000 line. CentrEnergo (CEEN) recovered part of its recent losses, with the stock bouncing back by 6.8% to UAH 10.90 on expectations that the company will not manage to de-list its shares from public trading despite last month’s statement of intent. The issue will be voted on at a shareholder meeting scheduled for this Wednesday. A similar vote to de-list at majority state-owned TurboAtom (TATM) on Oct 3 did not take place.
In London trading, Ferrexpo (FXPO) again approached GBp 300 level, adding 1.6%. Warsaw-listed Kernel (KER) sold off by 7.4% to PLN 51.50 and low-liquidity Agroton (AGT) extended its losing run by additional 10% to close at PLN 3.84.
The hryvnia weakened by another 0.7% to 26.76 UAH/USD amid heavy volatility that saw the currency trading as low as 27.20 at midweek, forcing the National Bank to intervene on the market by selling hard currencies, including a USD 100mn auction. We suppose that Naftogaz may have been buying up dollars amid seasonal purchases of imported natural gas. The NBU reported that its foreign currency reserves stood at USD 18.6bn as of 1 Oct 2017.
POLITICS AND ECONOMICS
- Europe, US Praise Kyiv After Donbass Framework Extended
- Groysman Says Education Law Doesn’t Violate Minority Rights
- Reform Hikes Pension Qualification Period to 25 Years
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