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Tuesday, August 10, 2010

Daily Market Brief

Market Comment

Ukrainian equity markets started the week off in a positive mood. The UX exchange jumped 0.95% Monday (Aug. 9) on a moderate trading volume of UAH 65.5 mln. Metals and mining names (AVDK +1.52%, AZST +1.25%, ENMZ +2.24%, YASK +2.73%) led a broad-based advance, which saw Poltava GOK skyrocket 20.57%. Alchevsk steel (ALMK -0.62%) was among the few names to pick up losses on the day. Banks followed the positive trend with Raiffeisen Bank Aval (BAVL) up 0.69%, and Ukrsotsbank (USCB) adding 1.22%. Uknafta (UNAF +1.35%) and Motor Sich (MSICH +1.35%) also reversed to gains, while GenCos (CEEN +1.94%, ZAEN -1.62%) closed mixed.

Ukrainian stocks traded on international markets showed mixed dynamics. Regal (RPT LN) pared the day’s previous losses to close 3.76% higher. JKX Oil & Gas climbed 0.76%, while Cadogan slipped 1.47%. Among food processing stocks, Astarta (AST PW +1.94%) and MHP (MHPC LI +0.215) inched up, unlike Kernel that dropped 0.7%. Ferrexpo (FXPO LN) remained on a roll, extending gains by 0.75%.

Demand was steady for Ukrainian risk on Monday. Sovereigns traded stronger by a half a point on the long end, while short-end issues edged up one eighth of a point. Municipal issues were also well bid; however, trading volumes remained insignificant. In the corporate sector, METINV, DTEK and MHPSA outperformed the universe to close 0.5 to 1 p.p. higher. Banking names generally closed unchanged with buyers recorded only for ALFAUA.

The rally continued on the Russian market. Russia 30 managed to add another half a point. Corporates also traded higher on solid demand.

Macro: The National Bank of Ukraine slashes discount rate
Metallurgy: Ukrainian steel plants decrease losses in June

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