Ukraine’s PFTS equity index finally reversed its three-week downward trend, recovering part of the losses amid a rally on global stock markets and adding 1.0% for the week to close at 547 points. However, Kyiv-listed blue chips were mixed, as the long-awaited launch of a new competitive electricity market in Ukraine raises concerns regarding the administrative price cap for electricity sold by thermal power generators. As a result, CentrEnego (CEEN) shares fell 4.3% to UAH 11.00 and DonbasEnergo (DOEN) was flat at UAH 26.35. On the upside, UkrNafta (UNAF) was the growth leader for the week, rising 9.4% to UAH 175 after the company reported a successful start of new oil well drilling in Lviv province. UkrNafta’s financial plan for 2019 envisages drilling of three new wells for a total cost of UAH 2.9bn (USD 110mn). Raiffeisen Bank Aval (BAVL) added 1.5% over the week to close at 30.45 kopecks.
In London trading, Ferrexpo (FXPO) corrected somewhat after an extended upward run, losing 4.4% and ending at GBp 263 per share. Shares of Ukraine’s largest poultry producer MHP (MHPC) hit turbulence after the national Anti-Monopoly committee opened a case against the company. The case revealed that MHP sets conditions with its trading partners on the consolidation of sales territories, requires distributors to adhere to pricing policy, and forbids them to sell the products of competitors. MHP’s majority owner Yuriy Kosyuk was a political ally of previous President Poroshenko, and this news is an indication that the new political environment in Kyiv may turn out to be less favorable for the company. MHPC’s low-liquidity stock dropped slightly below the USD 10 level before finishing at USD 10.15 (-1.9% for the week).
In Warsaw, top liquid agro name Kernel (KER) climbed above the resistance line of PLN 50 per share on a solid gain of 5.7% to PLN 51.30. Astarta (AST) also was notably higher, picking up 4.2% to PLN 25.00.
On the interbank currency market, the hryvnia had one of its best weeks of the year so far, gaining 1.8% against the dollar to close at 25.70 UAH/USD. Statistics showing that the country’s current account surplus was USD 257mn in 5M19 (0.5% of GDP), compared to a C/A deficit of USD 526mn (1.1% of GDP) in 5M18, provided some fundamental support for the local currency.
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