The Ukrainian Exchange index (UX) decreased by 10% YoY in 2022 failing
to track a real dramatic situation on the domestic stock market. The reason
behind the UX index’s poor reflection of the market was the inclusion of frozen
for trading shares of Motor Sich (MSICH) into the index basket. Moreover, the
UX index was not adjusted for the unprecedented obligatory transfer of all
Motor Sich and UkrNafta (UNAF) shares to the government securities account for
the country’s defense goals. For a comparison of the UX index performance,
there was a 39% YoY drop in the russian RTS index, a 22% YoY decrease in the
Polish WIG20, and a decline of 19% in the S&P500.
In individual stock movement, thermal power generator CentrEnergo (CEEN)
slipped by 36% YoY from UAH 6.30 to UAH 4.00 per share as the company de-facto
lost control over its Vuglegirsk Power Plant as it is now located on the
occupied territory. The company has also a problem with low tariffs for
electricity on the market leading to an accumulation of large operating losses.
There are no official reports regarding CentrEnergo’s P&L as reports
publication were postponed due to martial law in Ukraine. However, an
unofficial source indicated that back in peaceful 2021 CentrEnergo had a net
loss of UAH 989mn as the electricity market structure in the country remained
heavily regulated with a price cap for energy
producers.
Among other UX index components, Raiffeisen Bank (BAVL) stock
experienced a slump from 46 kopecks to 20 kopecks over the January-October
period and then recovered to a level of 30 kopecks in December. The bank was
profitable in 2022 despite an assessment that up to 30% of the Ukrainian
banking system corporate loan portfolio could become non-performing as a result
of the war risks.
In Warsaw trading, grain and sunflower oil exported Kernel (KER) had its
share price plunge of 70% from PLN 58.70 to PLN 17.50 in 2022 as the company
was forced to disinvest a part of the land bank, and had many challenges with
agro shipments.
On the currency market, the UAH/USD cash
rate jumped by almost 50% YoY from 27.30 to 40.80 UAH/USD in 2022. Meanwhile,
the official exchange rate which is used for interbank operations grew by 34%
YoY from 27.28 to 36.57 UAH/USD last year. There is a base case forecast that
the average hryvnia exchange rate will be at 42.20 UAH/USD in 2023, implying a
potential 13% devaluation for the Ukrainian currency this year.
POLITICS AND ECONOMICS
- Ukrainian Exports Drop by 35% YoY to USD 44bn
in 2022
The National Bank of Ukraine has
opened a special fundraising account to support the Armed Forces of Ukraine.
Please find more at the National Bank’s official website under the link
below:
www.bank.gov.ua
full report
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