Quotes for equities on the Ukrainian Exchange finished lower last week, with the UX index declining by 2.2% to 1802 points. The shaky situation on the energy market triggered fears regarding the ability of Ukraine’s real sector to bear the extremely high natural gas prices expected this winter season. The Zelenskiy administration is reportedly considering administrative intervention in the energy market to push private natural gas producers to sell their gas at a discount. UkrNafta (UNAF), one of the largest oil&gas extractors in the country, reacted negatively to this rumor, slipping by 2.6% to UAH 258. The majority-state owned CentrEnergo (CEEN) dropped by 5.4% last week to UAH 8.70 and Raiffeisen Bank Aval (BAVL) was flat at 45.00 kopecks per share.
On the London Stock Exchange, JKX (Oil&Gas) added 4.7% to GBp 50.80 after the company published its operational update for 3Q21 indicating its strong net cash position and plans to drill two new gas wells in Ukraine. Enwell Energy (former Regal) remained at GBp 40.00. Ferrexpo (FXPO) climbed by 2.6% to GBp 318 and MHP (MHPC) advanced by 6.9% to USD 8.10 per share.
In Warsaw trading, Kernel (KER) corrected by 2.0% to PLN 62.50 and Agroton (AGT) shed 3.9% to PLN 7.98.
The hryvnia was little-changed over the short business week in the country, as markets were closed on Oct 14-15 (Thu-Fri) for the Defenders’ Day holiday. The hryvnia inched down by 1 kopeck to 26.39 UAH/USD.
On the macroeconomic front, the IMF downgraded Ukraine’s GDP growth forecast for 2021 from 4.0% to 3.5%, but bumped up expectations for the growth in 2022 to 3.6% from 3.4%. We think that the IMF forecast for 2022 could be viewed as the base case scenario, leaving the large room for the more optimistic scenario with GDP growth of 5% YoY in 2022 in case the manufacturing sector is able to deliver a more solid recovery next year compared to what we have been witnessing so far this year.
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