Market View

October 20, 2017

Equities: The local UX index rose by 0.2% yesterday, mainly on support in UNAF (+1.7%). The broader KP-Dragon index inched 0.3% lower, as KER declined 1.1% and MHPC and AST lost 0.9% and 1.6%, respectively. FXPO was also weaker, testing the GBp 267 level intra-day, but managed to rebound towards the end of trading session to close at GBp 273.7 (-0.1%). As global markets remain volatile, we expect Ukrainian equities to trade sideways today. Investors will also follow a new re-privatization saga, as a local court ordered to return to the state a 93% stake in the country’s largest fixed-line telecom operator, Ukrtelecom (see below), which was sold to an SCM subsidiary in 2011 for UAH 10.5bn ($1.3bn at historical F/X). We find the news potentially disturbing given the negative impact in case the state has to repay the privatization price adjusted for devaluation.

Fixed income: Calm trading continued yesterday, with only minor fluctuations along the sovereign curve, but the long end did feel a bit heavy. Quasi-sovereigns continued to outperform with steady 0.25pt gains, while METINV and DTEK advanced to fresh highs (+0.75pt and +0.25pt, respectively).

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Name Close 1d, % 1m, % YTD, %
DAX 12,990 (0.41) 3.41 13.14
FTSE100 7,523 (0.26) 3.41 5.32
KP-Dragon 2,116 (0.34) (5.00) 33.70
MICEX 2,073 (1.03) 1.16 (7.17)
PFTS 298.3 0.21 2.82 12.51
S&P500 2,562 0.03 2.21 14.44
UX 1,233 0.21 9.08 54.91
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