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Analytics and Market news

Monday, 2 October 2023

Ukraine Weekly Market Monitor

Eavex Capital

The financial report of Ukrainian poultry producer MHP (MHPC) for the first half of the year didnt impress market players, causing the trading of the MHPC stock on the London Stock Exchange to drop by 2.6% over the week, to close at USD 3.39 per share. On the bright side, the company pleased creditors by announcing its readiness to redeem Eurobonds worth USD 500mn, due in May 2024. This demonstrates that MHP remains a disciplined borrower despite its substantial debt load of USD 1.54bn. The MHP-2024 Eurobonds are trading at an indicative price of 83 cents on the dollar (46% YTM). MHP-2026 Eurobonds saw an 11% increase in price to 64 cents on the dollar, yielding 30%.

Meanwhile, Ukraines sovereign Eurobonds experienced a noticeable decline, possibly due to investor concerns about the future extent of financial aid from the US. A political crisis between Democrats and Republicans led the US Congress to approve only temporary funding for government expenses, covering a 45-day period. This legislation includes significant spending cuts, which means that funds for Ukraines defense assistance wont be disbursed as originally planned. Ukraine-2034 Eurobonds dropped by 3.9% to 27 cents on the dollar, offering a conditional yield to maturity of 34%.

On the Ukrainian Exchange, indicative quotes for CentrEnergo (CEEN) remain at UAH 9.60. According to our assumptions, the sudden increase in the share prices of CentrEnergo in mid-September may be linked to expectations of a potential opportunity to sell these shares back to the issuer if shareholders vote against the resolutions proposed at the companys general meeting scheduled for October 20. Despite the current wording of these resolutions not meeting the criteria defined in the Ukrainian legislation as the buyback option it is not excluded that CentrEnergo is intentionally trying to disguise shareholders decisions, which are essentially significant transactions, to avoid repurchasing shares from shareholders who express a desire to vote against such resolutions and tender their shares for repurchase by the issuer.

STOCKS IN THE NEWS

- MHP Posts Net Profit of USD 67mn in 1H23 (EPS of USD 0.63)

The National Bank of Ukraine has opened a special fundraising account to support the Armed Forces of Ukraine. Please find more at the National Banks official website under the link below:

www.bank.gov.ua


full report


Eavex Capital welcomes any questions or comments you may have regarding our research products.
Please contact us by email:

Dmitry Churin, Head of Research, [email protected]



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