Equities listed in Kyiv ended mostly lower last week, leading to the UX index’s decline of 2.8% to 1752 points. The gauge is still up by 8.3% since the start of the 2021, outperforming the broad MSCI Emerging Market index, which is essentially flat (+0.2%) this year. On the other hand, developed market indexes remain strong, surging by firm double digits, as stocks tend to be preferred investments in a high inflation environment. In Ukraine, the National Bank decided to keep its key monetary policy rate unchanged at 8.5%, as the regulator sees an optimistic scenario that inflation in the country could slow to 9.6% YoY from 11.0% YoY registered for September. We doubt that consumer inflation will slow its pace by the year-end, as galloping energy prices should translate into price increases across all inflation basket components.
Quotes for CentrEnergo slumped by 13.8% last week to UAH 7.50 ahead of the company’s 3Q financial results, which are expected to be disastrous; higher coal costs have not been reflected in the price for electricity that CentrEnergo had sold previously under forward contracts. UkrNafta (UNAF) decreased by 2.3% to UAH 252 per share while Raiffeisen Bank Aval (BAVL) was unchanged at 45.00 kopecks. Outside the UX basket, Krukiv Wagon gained 4.5% to UAH 23.00.
London-listed poultry giant MHP (MHPC) inched down by 0.2% to USD 8.08 after the company reported a 5% YoY decrease in poultry volume sales in 3Q21. JKX Oil&Gas (JKX) sold off by 13.4% to GBp 44.00 under the risk that the Ukrainian government might impose a price cap for natural gas produced by private companies to stabilize skyrocketing energy tariffs for households.
On the Warsaw Stock Exchange, Kernel (KER) shed 0.5% over the week to PLN 62.20 after the company released a mixed operational update for the Jul-Sept quarter.
On the currency market, the hryvnia was once again surprisingly firm, gaining 0.3% to 26.30 UAH/USD. The Ukrainian currency has strengthened by 7.0% so far this year as the record high grain harvest combined with the global rally in soft commodities have been improving the country’s trade balance.
POLITICS AND ECONOMICS
- Ukraine Hits New COVID Peak as Gov’t Downgrades 2021 GDP Growth
STOCKS IN THE NEWS
- Kernel’s Oilseed Processing Down Sharply in Jul-Sept Quarter
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