Market View

February 22, 2012

Equities: It was a bit of a mixed day yesterday on the Ukrainian markets, with most of the action taking place on international exchanges. The KP-Dragon index shed 0.8% as gains in AGT PW (+0.7%), MHPC LI (+0.8%) and MLK PW (+2.2%, as the effects of the “cheese war” with Russia seem to be well absorbed by the company) were outweighed by declines in FXPO (-1.6%), KER PW (-0.4%) and AVGR LI (-0.5%). It is hard to see a clear direction or a conviction in the current market so we would expect the random walk to carry on for a while.

Fixed income: Ukrainian sovereigns outperformed during yesterday’s trading session with the long end of the curve closing around 25bp tighter. Benchmark Ukraine 20s and Ukraine 21s finished the day at 90.0/91.0 (9.48%/9.29%) and 90.75/91.75 (9.50%/9.33%) respectively. Naftogaz moved up to 97.75/98.75 (10.51%/10.05%). Corporates continued to lag, with only retail buying interest in some names. DTEK bonds were quoted at 99.0/100.5 (9.87%/9.31%), Metinvest 15s at 100.0/101.5 (10.24%/9.69%).

Daily

Kryukiv Rail Car [Under Review] — Secures new order Feb 22, 2012
Kryukiv Rail Car, Ukraine’s leading freight railcar producer and monopoly manufacturer of passenger railcars, will supply 40 passenger cars to Kazakhstan in 2012. ...
Avdiyivsky Coke [Buy; PT $1.35] — Plans to cut February output by 13% m-o-m Feb 22, 2012
Avdiyivsky Coke plans to decrease coke output by 13% m-o-m to 340 kt in February. Taking into account a lower number of days in February, the decrease in average daily output is estimated at 7% m-o-m, to 11.7 kt. Avdiyivsky plans to keep its daily prod ...
Milkiland [Under Review] — Production at cheese subsidiary banned from exporting to Russia to be reoriented to lower-margin products Feb 21, 2012
WSE-listed Milkiland, one of the largest dairy producers in Ukraine and Russia, has said it plans to reorient production at its cheese producing subsidiary, Mena Cheese Plant, towards butter and dry milk. At the moment, the plant is partially idled due to ...
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Reports

Ukrainian Bonds: Global Risk-On Mood Drives Local Issues Feb 20, 2012
Sovereigns finished the week on a positive note helped by a global risk-on mood. Benchmark Ukraine 20s and 21s closed three points higher at 88.5/90.0 (9.76%/9.48%) and 89.25/90.75 (9.77%/9.50%). Naftogaz closed flat w-o-w at 96.75/97.75 (10.96%/10.50%) a ...
Ukraine Strategy Weekly: Markets Encouraged by China, But Other Worries Persist Feb 20, 2012
Last week showed both continuous market nervousness, with not much progress on key global issues, on one hand, and a buying mood on the other, thus driving the MSCI Global up 1.4% w-o-w despite strong intra-week volatility. The Greek saga of missed deadli ...
Kernel Holding: Strong 1H12FY Results; Full-Year Guidance Unchanged Feb 17, 2012
We maintain our valuation for Kernel Holding with a 12-month price target of $27.75/share, suggesting 23% upside. We reiterate our Hold recommendation on the stock. ...
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Name Close 1d, % 1m, % YTD, %
DAX 6,908.18 (0.58) 7.33 17.12
FTSE100 5,928.20 (0.29) 2.52 6.39
KP-Dragon 3,804.37 (0.81) 9.42 16.48
MICEX 1,558.98 (1.28) 3.98 11.18
PFTS 563.13 (0.41) 3.10 5.37
S&P500 1,362.21 0.07 3.51 8.32
UX 1,507.88 (0.47) 4.07 3.36
ukr_2021 9.55 (2.25) (4.40) (5.63)
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