Ukraine Business
Outlook Turns Positive, but War Escalation Weighs on Markets
Ukrainian
businesses returned to a more optimistic outlook in May, with the Business
Activity Expectations Index rising to 50.8 from 49.4 in April, according to
data from the National Bank of Ukraine. The reading also surpassed the 48.0
level recorded in May 2024.
For the first time
since May last year, all sectors surveyed by the central bank expected growth,
with construction firms showing the strongest optimism. However, the rebound in
sentiment was partly based on the assumption of a potential de-escalation in
hostilities — a scenario that appears less likely following a fresh wave of
Russian aggression.
Equities of
Ukrainian companies listed abroad trended lower last week. Ferrexpo shares
dropped 12.6% over the week to GBp 47.20, with a market capitalization of USD
381mn, amid a 3% slide in global iron ore prices to USD 96 per tonne.
Kernel (KER) lost
5.3% to close at PLN 17.40, valuing the agricultural giant at USD 1.36bn,
following weaker-than-expected quarterly earnings.
MHP and Astarta
managed to climb by 0.8% and 1.7% respectively, with the former ending at USD
5.16 (MCap of USD 552mn).
The hryvnia gained
0.5% on the cash market to 41.60 UAH/USD
The Ukrainian currency had a period of lower volatility during the week.
However, the stronger euro became a kind of a threat for the country’s current
account balance as the EU is the largest trading partner and the trade deficit
with Europe is likely widens. Ukraine’s current account deficit was reported at
USD 6.8bn for 4M2025 compared to the deficit of USD 5.3bn in the same
period of 2024.
POLITICS AND ECONOMICS
- National Bank Holds Key Rate at 15.5% Since March
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