Kyiv-listed stocks rose last week, spurred by expectations of better liquidity on the market after the government became more active in its intention to attract foreign investments into the country. Meanwhile, on the macroeconomic side, the EBRD forecasted that Ukraine’s GDP will drop by 5.5% YoY this year with a rebound of 3.0% YoY in 2021. Earlier in May, the EBRD had projected a GDP contraction of 4.5% YoY in 2020 with growth of 5.0% next year.
The UX index advanced by 3.2% for the week to close at 1330 points. UkrNafta (UNAF) added the most points to the gauge, rising 5.8% to UAH 127 per share. The UNAF stock saw speculative buying momentum ahead of voting in Parliament on the company’s tax debt repayment scheme. On Sept 30, Parliament refused to consider the bill after preliminary voting fell short by only 2 votes on including the bill in the session agenda.
Raiffeisen Bank Aval (BAVL) picked up 1.2% to 42.00 kopecks and CentrEnergo (CEEN) surged by 8.7% to UAH 5.00 as the company once again was included in the top-priority privatization list.
In London trading, Ferrexpo (FXPO) was rather inactive, edging down by 0.8% to GBp 172, while MHP (MHPC) added 3.0% to close at USD 5.48. On the Warsaw Stock Exchange, Kernel (KER) inched up by 0.4% to PLN 39.80 and Astarta (AST) gained 4.2% to PLN 17.25.
On the currency front, the hryvnia ended marginally lower against the dollar for the week, slipping 0.2% to 28.36 UAH/USD. We expect some support for the national currency from rising prices for grains, the country’s major export category. Wheat prices have been rising steadily since August in the EU and the Black Sea as global buyers rush to the market amid this year’s drought conditions in key regions. Ukraine’s wheat was selling at USD 231 per tonne (FOB Black Sea) on Sept 30, up from USD 206/tonne on Aug 31, Platts commodity data showed. According to the US Department of Agriculture, EU and Ukrainian wheat production is estimated to be 12% and 7.4% lower, respectively, year on year.
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