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Wednesday, October 6, 2010

Daily Market Brief

Market Comment

Ukrainian equity markets continued their losing streak Tuesday (Oct. 5). The UX exchange opened with yet another dramatic slide, but recovered in the afternoon to close only 0.69% lower. Trading volume was extremely high, reaching nearly UAH 191 mln. Most blue chips came under pressure, with Avdiivka (AVDK +1.90%), UkrSibbank (USCB +0.95%) and Zakhidenergo (ZAEN +0.02%) managing to buck the broad market trend. Investors hammered metals and mining stocks: ALMK -0.59%, AZST -0.86%, ENMZ -1.75%, YASK -2.09%. Raiffeisen Bank Aval (BAVL -0.47%), Centerenergo (CEEN -0.21%), Ukrnafta (UNAF -0.15%) and Ukrtelecom (UTLM -0.98%) surged late but could not manage to find positive territory.

Ukrainian stocks listed on international markets traded predominantly in the red. Regal Petroleum was the notable exception; the stock recovered 10.45% from last week’s sell-off. Other oil and gas names closed significantly lower with Cadogan (CAD LN) losing 1.3%, JKX Oil & Gas (JKX LN) declining 2.54%. Food processing stocks posted moderate losses: AST PW -0.4%, KER PW -0.37%, MHPC LI -0.67%.

Trading was moderate on the Ukrainian Eurobond market yesterday. Corporates remained flat and banking names traded slightly up. Sovereigns were in good demand due to generally positive sentiment on the bond market. As a result, long-end issues closed a quarter of a point higher.

Macro: Ukraine’s budget revenues at only 65% for 2010
Fixed Income: Fitch assigns a “B” rating to Kernel