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Thursday, August 12, 2010

Daily Market Brief

Market Comment

Ukrainian stock markets sunk deep into the red Wednesday (Aug. 11) as negative data out of China and the US shook investors’ faith in economic recovery. The UX exchange (-3.26%) opened sharply lower, driven down by steel producers (ALMK -5.05%, AZST -5.29%, ENMZ -5.71%). Coke names (AVDK -3.20%, YASK -4.91%) posted steep losses with banks (BAVL -4.03%, USCB -3.21%) and GenCos (CEEN -3.82%, ZAEN -0.72%) following suit. Nearly all blue chips suffered heavy blows including Motor Sich (MSICH -3.35%), Ukrnafta (UNAF -2.70%) and Ukrtelecom (UTLM -1.53%).

Ukrainian stocks listed on international markets also came under selling pressure. Ferrexpo (FXPO LN) was among the worst performers – the stock lost 5.8%. Oil and gas names closed slightly lower (CAD LN -1.47%, RPT LN -2.96%, JKX LN unch.). Food processing stocks were not immune to the general decline: MHPC LI -2.13%, AST PW -0.16%, KER PW -0.64%.

Sellers were out in force on the Ukrainian Eurobond market Wednesday. Sovereigns traded 0.25 to 0.75 p.p. lower. Naftogaz felt the heat, losing a point during the session. Metinvest and MHPSA were also among the worst performers, closing 0.5 to 1 p.p. down.

On the Russian space, sellers dominated with Russia 30 closing half a point lower. In the corporate sector, trading volumes were moderate with weaker pricing throughout the day. The Belorussian sovereign issue closed down on Wednesday, losing half a point.

Oil & Gas: Ukrnafta reports revised net profit for 1H2010