Market View
February 3, 2012
Equities: Local equities hit resistance yesterday as some players decided to lock in profits amid mixed performance in western markets. Recent outperformers from the steel sector drove the weakness, with YASK and AVDK slipping by 3-4%, while banks posted less significant declines of 1-2%. Volumes were a little lower led by CEEN (-1.1%), as the stock continued to trade actively on a recent privatization announcement. Warsaw-listed Coal Energy (+4%) was Thursday’s best performer, reflecting the company’s ongoing bond roadshow in Poland. Astarta (+3.6%) also did well, catching up with MHP (+0.4%) and Avangard. The latter held on to its levels despite weakness in its Eurobonds caused by negative media reports, seen as a product of Mr. Bakhmatyuk’s confrontation with Mr. Maksimov. Expect a slower market ahead of the weekend given strong performance earlier in the week and the continuing Ukraine-Russia gas saga.
Fixed income: Ukrainian sovereign Eurobonds saw some selling pressure on the long end of the curve but the market almost fully recovered towards the close. Benchmark Ukraine 20s and 21s closed at 88.75/89.75 (9.70%/9.52%) and 89.5/91.0 (9.72%/9.45%). In the corporate sector AVINPU tumbled to as low as 65.0 (24.93% yield), down from its previous levels of 74.0/79.0, on reports accusing the company of providing fraudulent information to state authorities. The bond closed at 65.0/75.0 (24.93%/19.77%). Other corporates were just a touch weaker on the day with Mriya slipping to 87.5/90.0 (15.10%/14.21%) and PUMBUZ down to 91.5/94.5 (14.65%/13.32%).