Market Monitor October 13, 2011

Market Update STOCK MARKET PERFORMANCE

Equity UX Index RTS Index* WIG 20 Index* 2,500 Local stocks again lagged strong gains seen on European bourses on 2,250 Wednesday (Oct 12), as continued to receive a dressingdown from EU leaders over the conviction of former PM Yulia Tymoshenko. 2,000 The approval by ’s parliament of an increase in the EU’s bank 1,750 bailout fund fueled a rise of more than 2% in Frankfurt and Paris, 1,500 while the UX index managed a gain of only 0.5% to 1,327 points. The 1,250 11-Jul 25-Jul 8-Aug 22-Aug 5-Sep 19-Sep 3-Oct day’s best performer was volume leader , which added * rebased 1.5% on turnover of UAH 13mn. Other top liquid names, including , Alchevsk Steel, Azovstal, and , were up MARKET INDEXES by between 0.5% and 1%. In London, Ferrexpo continued its strong Last 1D ch 1M ch YTD rebound on fading global recession fears, picking up another 7.9% to UX 1326.4 0.7% 12.7% 45.7% RTS 1407.8 3.9% 13.4% 20.5% USD 3.30. WIG20 2316.7 2.4% 3.0% 15.6% MSCI EM 923.2 1.5% 7.0% 19.8% Fixed Income S&P 500 1207.3 1.0% 4.6% 4.0% Ukrainian sovereign Eurobonds saw a broad rebound on Wednesday. Ukrainian midterm Eurobonds added 2.0p.p. 84.0/88.0 UX INTRADAY OCTOBER 12, 2011 (10.70%/9.58%), while longterms rose by 4.0p.p. and closed at 1,345 Close as of 11 Oct. 2011, 1317.1

88.0/89.0 (9.93%/9.75%). Corporate names followed the general 1,335 trend and were higher as well. The biggest gainer was DTEK15s, which gained 2.0p.p. to 90.0/92.0 (13.08%/12.31%). 18s 1,325 increased by 1.7p.p., fi xing at 86.5/88.5 (11.81%/11.32%). In the 1,315 banking sector the biggest gainer was Oschadbank16s, which rose 1,305 1.6p.p., closing at 79.0/81.2 (14.89%/14.12%). 10:30 11:15 12:00 12:45 13:30 14:15 15:00 15:45 16:30 17:15

Volume, Number FIXED INCOME Volume Leaders Ticker Last, USD 1D ch USD mn of Trades Last 1D ch 1M ch YTD Motor Sich MSICH 216.05 1.5% 1.6 574 EMBI+Global 411.7 4.4% 7.0% 42.7% Alchevsk Steel ALMK 0.0102 0.7% 1.3 867 CDS 5Y UKR 900.0 8.9% 55.2% 75.5% Centrenergo CEEN 0.87 0.5% 0.9 437 Ukraine13 12.10% 0.3 p.p. 6.0 p.p. 6.6 p.p. Growth Leaders Ukr14 12.94% 1.9 p.p. 5.6 p.p. 6.3 p.p. Ukravto AVTO 11.18 32.3% 0.01 23 Ukraine20 10.17% 0.7 p.p. 2.8 p.p. 2.6 p.p. Bank Forum FORM 0.29 9.5% 0.01 22 Privatbank16 16.64% 0.0 p.p. 6.3 p.p. 9.7 p.p. Centralny GOK CGOK 0.77 3.3% 0.03 29 CURRENCY Loss Leaders Last, UAH 1D ch 1M ch YTD Mariupol Ilyicha MMKI 0.03 6.6% 0.00 16 USD 8.02 0.2% 0.2% 0.9% DNEN 88.57 2.1% 0.03 8 EUR 11.03 1.1% 1.0% 5.1% Khartsyzk Pipe HRTR 0.11 1.6% 0.11 16 RUB 0.26 1.4% 3.5% 0.1%

Highlights COMMODITIES POLITICS AND ECONOMICS Last 1D ch 1M ch YTD WSA Expects Global Steel Use to Grow by 5% YoY in 2012 Wheat, USD/t 232.4 1.3% 13.1% 12.6% UkrStat: August Trade Defi cit Was USD 1.4bn Steel, USD/t 677.5 0.0% 3.9% 6.7% Oil, USD/bbl 85.6 0.3% 2.1% 9.4% STOCKS IN THE NEWS Gold, USD/oz 1676.0 0.8% 9.7% 18.0% Hyundai Considers Building New Assembly Plant in Ukraine Source: Bloomberg, Ukrainian Exchange Motor Sich to Modernize Helicopters at Konotop Plant www.eavex.com.ua 33 Shevchenko Blvd., , Ukraine, 01032 (+380 44) 5905454, (+380 44) 5905464 offi [email protected] Stocks in the News October 13, 2011

WSA Expects Global Steel Use to NEWS Grow by 5% YoY in 2012 The World Steel Association expects global steel consumption in 2011

by Ivan Dzvinka to have increased by 6.5% YoY to 1.40bn tonnes, according to the [email protected] organisation’s press release (Oct 12). For 2012, the WSA forecasts that global steel use will move up by 5.4% YoY to 1.47bn tonnes. Calling its forecast “cautiously optimistic”, the WSA based its 2012 outlook on assumptions that developing economies will continue to drive global growth and that the policy response to the European sovereign debt crisis will prevent increased volatility in equity and fi nancial markets.

APPARENT STEEL USE BY REGIONS

mn tonnes 2010 YoY 2011E YoY 2012E YoY European Union 144.9 21.1% 155 7.0% 158.9 2.5% Other Europe 29.6 24.0% 33 11.3% 34.8 5.7% CIS 48.6 34.5% 55.6 14.4% 59.8 7.5% NAFTA 110.9 32.8% 120.9 9.0% 126.8 4.9% Central & South America 45.6 35.2% 47.8 4.7% 52.4 9.8% Africa 24.5 -8.9% 21.4 -12.7% 23.8 11.0% Middle East 47.6 14.6% 50 5.0% 53.9 7.9% Asia & Oceania 860.6 11.1% 914 6.2% 963.1 5.4% World 1,312.4 15.1% 1,397.5 6.5% 1,473.6 5.4%

Source: World Steel Association COMMENTARY The expected deceleration of steel use growth in the EU to 2.5% in 2012 from 7.0% in 2011 would negatively affect Ukrainian steel export dynamics over 2012. This is because the EU accounts for a large chunk of Ukrainian steel exports, having consumed 31% of the total fi gure over 7M11. On the other hand, acceleration of steel use growth by Middle East countries to 7.9% in 2012 from 5.0% in 2011 is positive for Ukraine, which exported about 4mn tonnes of steel to that region in 7M11, a 30% share in its total. We note, however, that a sharp slowdown in the 2012 GDP growth of Turkey, the third largest national importer of Ukrainian steel, would have an adverse impact on Ukraine’s steel exports volumes. The IMF expects the GDP growth of Turkey to slow to 2.2% in 2012 after 6.6% growth in 2011E. At this stage, we maintain our forecast that Ukrainian steel output will have moved up by 5% YoY to 34.5mn tonnes in 2011, with the increase in 2012 dropping to about 1% YoY with output of 34.7mn tonnes.

www.eavex.com.ua 2 Politics and Economics October 13, 2011

UkrStat: August Trade Defi cit Was NEWS USD 1.4bn Ukraine’s trade defi cit amounted to USD 1.4bn in August, bringing the YtD by Dmitry Churin trade defi cit to USD 8.1bn, compared to a defi cit of USD 4.5bn in 8M10, the [email protected] State Statistics Committee reported on Wednesday (Oct 12). The country’s exports of goods were up 39.4% YoY to USD 43.9bn while imports grew 44.6% YoY to USD 52.0bn in 8M11.

UKRAINE’S MONTHLY EXPORT-IMPORT, USD bn Export Import Balance 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 - (1.0) Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 (2.0) (3.0)

COMMENTARY The trade defi cit in August was 22% higher than in July, which we think was due to a slowing in Ukraine’s steel exports to Arab markets during Ramadan. Among other factors were export duties for Ukrainian grain, which limited exports of the current harvest. We forecast that Ukraine’s trade defi cit will total USD 12.6bn in 2011, increasing 35% YoY.

www.eavex.com.ua 3 Stocks in the News October 13, 2011

Hyundai Considers Building New NEWS Assembly Plant in Ukraine Hyundai is considering building a minibus and light commercial vehicle Iryna Levkivska (LCV) plant in Ukraine, the business daily Kommersant reported on Monday [email protected] (Oct 11). The annual capacity of the new plant would be 150,000200,000

BOGDAN MOTORS (LUAZ UK) vehicles. Ukrainian Deputy Prime Minister Boris Kolesnikov said that a Price: USD 0,027 Market Cap: USD 118mn contract may be signed in December and the project can be completed within 18 months. EV/S P/E EV/EBITDA Div. Yield 2011E 0.9 31.5 8.8 0% COMMENTARY 2012E 0.7 9.1 7.6 0% We consider this news as negative for Bogdan Motors, which currently assembles Hyundai cars in Ukraine. Bogdan Motors is one of the largest producers of buses and LCVs in Ukraine and emergence of such a large competitor would be a major setback for Bogdan. Hyundai is planning to export its vehicles to the EU and CIS market, as the announced capacity of the plant is 10x larger than the Ukrainian market for Hyundai vehicles. However, we doubt that Hyundai will sign the contract on construction the assembly plant in Ukraine taking into account current low capacity localization in Ukraine, the quick time frame and the high localization level demanded by the Ukrainian government. Bogdan Motors can benefi t if Hyundai decides to produce minibuses and LCVs at Bogdan’s newly built plant in , which currently utilizes only 10% of its production capacity. Our current target price for the LUAZ stock of USD 0.064 suggests a potential upside of 135%.

Motor Sich to Modernize Helicopters NEWS at Konotop Plant Motor Sich, a manufacturer of aircraft and helicopter engines, is to

Iryna Levkivska modernize the multifunctional helicopters Mi2 and Mi8 at the facilities of [email protected] the stateowned Konotop aircraft repair plant “Aviakon”, Interfax reported on Tuesday (Oct 12). The project will be completed within 5 years, with CapEx of MOTOR SICH (MSICH UK) the project estimated at USD 10mn. Price: USD 216 Market Cap: USD 450mn COMMENTARY EV/S P/E EV/EBITDA Div. Yield The company plans to modernize 18 helicopters during 2012, and will 2011E 0.6 2.2 1.9 1.2% increase its capacity to 40 units per year during 20142015. We believe 2012E 0.5 1.9 1.7 7.7% that this project will allow Motor Sich to diversify its revenue. An update of the existing helicopter Mi2 will cost USD 4.5mn, while a new model would cost USD15mn. Modernization will extend the operating life of the helicopter by between 8 and 16 years. The main competitor which provides similar helicopter overhaul services is Rostvertol (Russia). Our model for Motor Sich is based on management’s assumptions and envisages 22% YoY sales growth to USD 767mn, a 32% EBITDA margin, and a 27% net margin. We have a BUY rating on the MSICH stock.

www.eavex.com.ua 4 Recommendations October 13, 2011

EAVEX RECOMMENDATIONS

Price, Target price, Name Ticker USD per share USD per share Upside, % Rating Commentary

S

Azovstal AZST 0.18 0.15 18% SELL AZST is expected to post poor earnings in FY12 on a 10% YoY drop in steel prices and weak demand. I O

Ferrexpo plans to expand iron ore pellet making capacity from its own ore by 33% to 12mn tonnes by Ferrexpo FXPO LN 5.19 5.71 10% BUY 1Q13. Pivnichny GOK SGOK 1.07 1.77 65% BUY We expect SGOK to distribute USD 550mn in dividends in spring 2012, implying a DPS of USD 0.24. Centralny GOK CGOK 0.78 1.30 68% BUY CGOK is a strong dividend play. A DPS of USD 0.23 is expected to be declared in spring 2012. C

Avdyivka Coke AVDK 0.76 1.86 144% BUY AVDK’s order book is secure thanks to its integration with Metinvest, Ukraine’s largest M&M holding. Alchevsk Coke ALKZ 0.044 0.030 32% SELL ALKZ heavily distorts its fi nancial results, with no expected improvement in the medium term. R M

We expect a 18% CAGR in sales for 20102015E, as the company’s key clients should resubmit orders Stakhanov Wagon SVGZ 0.44 1.69 286% BUY which were deferred due to the global economic downturn. Krukiv Wagon is wellpositioned to benefi t from rebounding demand on the CIS railcar market. We Krukiv Wagon KVBZ 2.29 6.44 181% BUY estimate that its revenue will rise at a 11% CAGR in 20102015E. LuhanskTeplovoz’s incorporation into TransMashHolding should help it to exploit its alreadydominant LuhanskTeplovoz LTPL 0.33 0.64 92% BUY position on the Russian market for diesel locomotives. S M

Bogdan Motors is set to see its top line jump by 2.3x YoY to USD 534mn in 2011, thanks in large part Bogdan Motors LUAZ 0.027 0.064 135% BUY to the consolidation of Hyundai import sales on its income statement. Motor Sich should see its sales grow with a 20102014E CAGR of 15%. For 20112014, we forecast Motor Sich MSICH 217 775 258% BUY average EBITDA of 31% and net margin of 26%. Sumy Frunze SMASH 0.6 SELL A selloff of a majority of production assets will adversely impact the company’s earning power. Turboatom TATM 0.63 1.09 74% BUY Turboatom’s order book is valued at $310mn, representing growth of 25% since June 2010. T

Ukrtelecom UTLM 0.050 0.065 29% SELL Fixedline long distance revenue is stagnating, with increasing competition from mobile operators. O  G

JKX Oil & Gas JKX 2.6 6.0 131% BUY The expected start of operations in JKX’s Russian gas fi eld should lift output. P U

DonbasEnergo DOEN 2.88 11.40 296% BUY DonbasEnergo recently launched Ukraine’s most effi cient power generation unit. KrymEnergo KREN 0.17 0.68 291% BUY We forecast that KrymEnergo’s EBITDA margin will jump by 8 p.p. by 2014 CenterEnergo CEEN 0.87 2.60 199% BUY CentrEnergo is expected to return to profi ts in 20112012. DniproEnergo DNEN 88.8 74.0 17% SELL ZAEN 31.1 37.8 21% SELL The company has a large debt burden. Its debttoequity ratio was 2.7x in 1Q11. C

MHP MHPC 11.5 24.0 109% BUY We forecast that MHP’s sales will grow by a CAGR of 12.6% in 20102018. Astarta’s revenue should grow by 54% YoY to USD 450mn in 2011, and with a 20112016 CAGR of Astarta AST 22.45 39.9 78% BUY 15%. 2011E EBITDA of USD 138mn implies a margin of 31%, compared the peer median of 16%. Avangard operates with a gross margin of 36% vs. the industry avg of 22% and expects to raise its out Avangardco AVGR 9.50 28.3 198% BUY put by 56% by 2015, to 6.8bn eggs. Exports to the EU and MENA markets will be sales growth drivers. Despite expected net profi t growth of 43% CAGR during 20102015, our DCF and comparative Agroton AGT 8.37 11.45 37% SELL valuations both show that the stock trades at a signifi cant premium to its peers. We model sales as growing at 25% CAGR to USD 182mn and EBITDA increasing at 3.5% CAGR to Sintal SNPS 2.12 4.33 105% HOLD USD 42mn over 20112016. We like Sintal fundamentally, but we believe the stock is fairly valued. Sales should grow by a 20112016 CAGR of 13.5% to USD 112mn with a gross margin of 28%. EBITDA MCB Agricole 4GW1 1.96 4.53 132% BUY is modeled as moving up at 3.5% per year to USD 23.5mn in 2016, implying an EBITDA margin of 21%. Concern Galnaftogaz GLNG 0.024 0.030 23% BUY Galnaftogaz has announced a plan to aggressively expand its fi lling station network. B

Raiffeisen Bank Aval BAVL 0.019 0.063 227% HOLD The bank enjoys a high net interest margin of 7%. RBA will return to profi tability in 2011. Urksotsbank USCB 0.03 0.13 363% BUY USCB is the best listed Ukrainian bank in terms of cost effi ciency, with a cost/income ratio of ~30%. Forum suffers from a low quality of earnings, a low net interest margin of 2.9%, and a high cost/income Bank Forum FORM 0.29 SELL ratio of 100%+.

Source: Eavex Research

www.eavex.com.ua 5 Market Data October 13, 2011

PRICES AND QUOTES

Name Ticker Today, 52 high, 52 low, Absolute performance Performance relative to the UX index UAH* UAH* UAH* 1d 1w 1m ytd 1d 1w 1m ytd UX Index UX 1326.42 2962.58 1307.13 0.7% 0.2% 12.7% 45.7% 0.0% 0.0% 0.0% 0.0% S Alchevsk Steel ALMK 0.082 0.26 0.08 0.7% 2.4% 24.2% 63.2% 0.0% 2.6% 11.5% 17.5% Azovstal AZST 1.48 3.44 1.42 0.5% 0.9% 7.1% 48.5% 0.2% 0.7% 5.6% 2.7% Dniprospetzstal DNSS 1,300 2,400 1,080 0.0% 16.9% 23.5% 4.8% 0.7% 16.7% 10.8% 41.0% Enakievo Steel ENMZ 39 209 38 0.8% 2.3% 31.7% 77.6% 0.1% 2.1% 19.0% 31.9% Arcelor Mittal KR KSTL 2.48 8.00 2.48 n/a 50.4% 50.4% 62.4% n/a 50.2% 37.7% 16.7% Mariupol Ilyicha MMKI 0.28 1.05 0.25 6.7% 0.0% 12.5% 70.2% 7.4% 0.2% 0.2% 24.5% Zaporizhstal ZPST 5.20 5.99 3.00 0.0% 44.4% 37.2% 15.6% 0.7% 44.6% 49.9% 61.3% C Alchevsk Coke ALKZ 0.35 0.75 0.18 0.0% 0.0% 20.7% 34.0% 0.7% 0.2% 33.4% 11.8% Avdyivka Coke AVDK 6.1 18.0 5.8 0.3% 1.5% 9.6% 59.1% 0.4% 1.7% 3.0% 13.4% Yasynivsky Coking YASK n/a 5.60 1.85 n/a n/a n/a n/a n/a n/a n/a n/a I O M Centralny GOK CGOK 6.20 9.20 4.80 3.3% 9.5% 7.5% 1.6% 2.6% 9.3% 5.2% 44.1% Ferrexpo FXPO 5.20 8.30 3.67 9.1% 26.5% 9.7% 19.8% 8.3% 26.7% 3.0% 25.9% Pivnichny GOK SGOK 8.6 15.9 8.2 2.0% 1.9% 8.8% 35.1% 1.3% 2.1% 3.9% 10.6% C M Pokrovske Mine SHCHZ n/a 5.44 1.70 n/a n/a n/a n/a n/a n/a n/a n/a Komsomolets Donbasa SHKD 1.75 5.45 1.30 12.5% 12.9% 24.9% 64.7% 13.2% 13.1% 12.2% 19.0% Energy CLE 8.10 8.10 5.15 3.7% 15.3% 29.0% n/a 3.0% 15.5% 41.7% n/a M M Druzhkivka Machinery DRMZ 1.80 4.00 0.75 0.0% 0.0% 10.0% 33.3% 0.7% 0.2% 2.7% 79.1% Svitlo Shakhtara HMBZ 0.50 1.69 0.40 0.0% 0.0% 25.0% 30.6% 0.7% 0.2% 37.7% 15.2% P M Khartsyzk Pipe HRTR 0.89 1.39 0.85 1.1% 2.3% 10.1% 25.8% 1.8% 2.5% 2.6% 19.9% Interpipe NTRP NITR 2.60 9.75 2.60 n/a 35.8% 35.8% 69.4% n/a 35.6% 23.1% 23.7% Interpipe NMPP NVTR 0.84 2.90 0.45 0.0% 18.3% 25.4% 66.1% 0.7% 18.5% 38.1% 20.4% R M Kryukiv Wagon KVBZ 18.3 39.6 15.1 0.3% 1.4% 10.6% 48.7% 1.0% 1.6% 23.3% 2.9% Luhanskteplovoz LTPL 2.66 5.16 2.01 0.0% 10.4% 8.6% 37.4% 0.7% 10.6% 21.3% 8.3% Mariupol Heavy Machine MZVM 0.4 21.6 0.4 10.8% 18.0% 0.0% 96.3% 10.1% 17.8% 12.7% 50.6% Stakhanov Wagon SVGZ 3.50 11.89 3.36 0.3% 14.6% 22.0% 62.0% 1.0% 14.4% 9.4% 16.3% S M Bogdan Motors LUAZ 0.22 0.34 0.15 0.7% 4.2% 3.6% 4.3% 1.4% 4.0% 16.3% 50.0% Motor Sich MSICH 1,732 3,868 1,609 1.5% 2.7% 15.7% 41.8% 0.8% 2.9% 3.0% 3.9% Sumy Frunze Engineering SMASH 5.0 39.0 3.0 11.1% 2.0% 0.0% 65.5% 10.4% 1.8% 12.7% 19.8% Turboatom TATM 5.00 5.85 4.50 0.0% 0.0% 9.9% 7.5% 0.7% 0.2% 2.8% 53.2% WESTA ISIC WES 2.40 4.33 2.31 2.0% 3.3% 20.8% n/a 1.3% 3.5% 8.1% n/a T UTLM 0.40 0.66 0.35 0.5% 1.3% 3.9% 26.1% 1.2% 1.5% 16.6% 19.6% O  G Concern Galnaftogas GLNG 0.20 n/a n/a 0.0% 0.0% 0.0% 33.3% 0.7% 0.2% 12.7% 79.1% JKX Oil JKX 2.60 5.37 2.39 1.8% 6.4% 9.6% 46.9% 1.1% 6.6% 3.1% 1.2% UNAF 428 934 264 2.9% 5.2% 25.2% 28.1% 2.2% 5.4% 12.5% 17.6% P U Centrenergo CEEN 7.0 20.00 6.76 0.5% 4.8% 23.3% 52.7% 0.2% 4.6% 10.6% 7.0% Dniproenergo DNEN 710 1,365 488 2.1% 2.3% 31.7% 46.0% 2.8% 2.1% 44.4% 0.3% Donbasenergo DOEN 23.0 83.7 22.3 0.4% 0.1% 14.5% 68.0% 0.3% 0.3% 1.8% 22.3% Zakhidenergo ZAEN 249 577 121 0.0% 3.1% 26.1% 45.9% 0.7% 2.9% 38.8% 0.1% C Agroton AGT 8.4 15.4 7.3 3.6% 9.1% 9.4% 28.7% 2.9% 9.3% 3.3% 17.0% Astarta AST 22.5 35.8 19.5 2.8% 13.0% 0.9% 27.4% 2.0% 13.2% 11.7% 18.3% Avangardo AVGR 9.5 21.0 9.4 1.1% 2.1% 24.0% 36.0% 0.4% 1.9% 11.3% 9.7% Industrial Milk Company IMC 3.0 4.2 2.4 3.2% 5.0% 8.1% n/a 3.9% 5.2% 20.8% n/a Kernel KER 21.3 31.1 17.8 5.5% 14.9% 3.7% 15.3% 4.8% 15.1% 16.4% 30.4% Mriya Agro Holding MAYA 7.73 11.15 7.30 1.2% 3.8% 2.8% 8.9% 0.5% 4.0% 15.5% 54.7% MHPC MHPC 11.5 23.0 8.0 0.5% 37.7% 17.6% 32.7% 0.2% 37.9% 4.9% 13.0% Milkiland MLK 6.7 16.1 5.6 2.2% 5.1% 6.1% 85.1% 1.5% 5.3% 18.8% 39.3% Ovostar Union OVO 18.83 22.77 14.68 1.2% 4.7% 2.8% n/a 0.4% 4.9% 15.5% n/a Sintal SNPS 2.1 4.9 2.1 5.6% 2.2% 20.5% 37.6% 6.3% 2.0% 7.8% 8.1% MCB Agricole 4GW1 2.0 3.4 1.7 0.7% 1.8% 19.5% 31.9% 0.0% 1.6% 6.8% 77.6% C Stirol STIR 28.8 92.0 27.5 0.3% 3.0% 8.4% 63.8% 0.4% 3.2% 4.3% 18.1% B Raiffeisen Bank Aval BAVL 0.154 0.5 0.2 0.7% 1.0% 19.3% 61.1% 0.1% 1.2% 6.6% 15.4% Bank Forum FORM 2.3 6.8 1.8 9.5% 4.2% 17.9% 62.1% 8.8% 4.0% 30.6% 16.4% Ukrsotsbank USCB 0.224 0.7 0.2 0.9% 1.8% 7.0% 59.6% 0.1% 2.0% 5.7% 13.9% Source: Bloomberg * companies listed abroad are in USD

www.eavex.com.ua 6 Market Data October 13, 2011

MAIN FINANCIAL FORECASTS, USD MN

Name Ticker Net Sales EBITDA EBITDA marginNet Profi t Net Profi t margin 2010 2011E 2012E 2010 2011E 2012E 2010 2011E 2012E 2010 2011E 2012E 2010 2011E 2012E S Mariupol Ilyicha MMKI 3,130 3,859 3,358 61 19 12 2.0% 0.5% 0.4% 53 125 165 neg neg neg Arcelor Mittal KR KSTL 2,953 3,229 2,841 348 488 410 11.8% 15.1% 14.4% 152 238 166 5.2% 7.4% 5.9% Alchevsk Steel ALMK 1,340 2,164 1,904 15 108 75 neg 5.0% 3.9% 128 4 7 neg 0.2% neg Yenakievo Steel ENMZ 1,116 1,497 1,347 160 150 159 neg neg neg 98 180 194 neg neg neg Azovstal AZST 2,998 3,799 3,458 26 71 55 0.9% 1.9% 1.6% 22 49 55 neg neg neg Zaporizhstal ZPST 1,660 2,125 1,913 80 43 34 4.8% 2.0% 1.8% 30 6 9 1.8% neg neg DniproSpetzStal DNSS 505 725 616 41 75 58 8.2% 10.4% 9.4% 7 43 21 1.4% 5.9% 3.4% C Avdyivka Coke AVDK 888 1,373 1,198 68 65 52 7.6% 4.7% 4.4% 3 13 3 neg 1.0% 0.2% Alchevsk Coke ALKZ 746 788 716 7 9 3 0.9% 1.1% 0.4% 4 2 9 neg neg neg Yasynivsky Coke YASK 440 568 629 21 43 52 4.8% 7.5% 8.2% 9 22 28 2.0% 3.8% 4.5% I O M Centralny GOK CGOK 558 756 682 300 454 394 53.7% 60.0% 57.8% 162 294 245 29.0% 38.9% 36.0% Pivnichny GOK SGOK 1,256 1,729 1,583 747 1,115 978 59.5% 64.5% 61.8% 333 686 580 26.5% 39.7% 36.6% Ferrexpo FXPO 1,295 1,730 1,603 585 804 695 45.2% 46.5% 43.4% 425 600 500 32.8% 34.7% 31.2% C M Komsomolets Donbasa SHKD 151 161 187 48 49 57 31.4% 30.7% 30.7% 3 6 8 neg 3.5% 4.5% Pokrovske Mine SHCHZ 385 414 509 71 125 162 18.4% 30.2% 31.9% 10 29 60 neg 7.0% 11.8% Mining Machinery Druzhkivka Machinery DRMZ 125 85 95 15 11 12 11.9% 12.3% 13.0% 11 6 8 9.0% 6.6% 8.0% Svitlo Shakhtara HMBZ 52 61 66 13 15 16 24.7% 24.3% 23.7% 7 8 9 13.8% 14.0% 13.8% P M Khartsyzk Pipe HRTR 336 565 485 48 79 68 14.2% 14.0% 14.0% 22 50 41 6.4% 8.9% 8.6% Interpipe NTRP NITR 586 678 773 40 81 108 6.9% 12.0% 14.0% 32 10 38 neg 1.4% 4.9% Interpipe NMPP NVTR 150 181 212 10 19 21 6.6% 10.3% 10.0% 8 1 3 neg 0.8% 1.3% R M Mariupol Heavy Machine MZVM 332 97 99 12 14 17 3.7% neg neg 21 25 17 neg neg neg LuganskTeplovoz LTPL 108 166 196 0 8 11 neg 4.9% 5.8% 1 1 3 neg 0.4% 1.3% Krukiv Wagon KVBZ 509 730 795 73 97 103 14.4% 13.3% 13.0% 38 61 67 7.4% 8.4% 8.4% Stakhanov Wagon SVGZ 363 502 602 37 45 54 10.1% 9.0% 9.0% 33 30 38 9.0% 6.1% 6.3% S M Sumy Frunze Engineering SMASH 287 318 339 35 36 37 12.1% 11.4% 10.9% 40 8 11 14.1% 2.6% 3.2% Turboatom TATM 119 150 180 36 47 55 30.1% 31.2% 30.6% 24 32 37 20.0% 21.2% 20.3% Motor Sich MSICH 631 767 873 220 242 272 34.9% 31.6% 31.1% 157 208 234 25.0% 27.1% 26.8% A I Bogdan Motors LUAZ 229 534 627 35 53 62 15.5% 10.0% 9.9% 34 4 13 neg 0.7% 2.1% T Ukrtelecom UTLM 848 908 900 165 200 234 19.5% 22.0% 26.0% 33 31 70 neg 3.4% 7.8% O  G Ukrnafta UNAF 2,501 2,339 2,404 553 725 841 22.1% 31.0% 35.0% 331 467 551 13.2% 20.0% 22.9% Concern Galnaftogaz GLNG 1,141 1,426 1,659 82 117 141 7.2% 8.2% 8.5% 39 50 67 3.4% 3.5% 4.0% JKX Oil & Gas JKX 193 266 392 128 173 255 66.4% 65.0% 65.0% 21 75 121 11.0% 28.2% 30.9% E U CentrEnergo CEEN 708 896 1,051 28 34 84 4.0% 3.8% 8.0% 1 1 35 0.2% 0.1% 3.3% DniproEnergo DNEN 770 918 1,058 85 119 148 11.0% 13.0% 14.0% 24 63 86 3.1% 6.9% 8.1% DonbasEnergo DOEN 379 463 553 6 14 39 neg 3.0% 7.0% 18 0 18 neg neg 3.3% ZakhidEnergo ZAEN 618 784 920 11 31 69 1.7% 4.0% 7.5% 23 31 35 neg 4.0% 3.9% C Slavutych Brevery SLAV 355 448 469 97 120 124 27.4% 26.7% 26.4% 53 63 72 14.9% 14.1% 15.3% Sun InBev Ukraine SUNI 436 494 543 114 139 155 26.2% 28.1% 28.6% 54 78 92 12.3% 15.8% 16.9% MHP MHPC 944 999 1,061 325 355 375 34.4% 35.5% 35.3% 215 211 208 22.8% 21.1% 19.6% Kernel KER 1,020 1,550 1,590 190 300 290 18.6% 19.4% 18.2% 152 194 187 14.9% 12.5% 11.8% Astarta AST 245 375 425 119 138 127 40.5% 30.6% 24.9% 91 105 95 31.2% 23.2% 18.6% Avangardco AVGR 440 603 689 194 255 305 44.0% 42.3% 44.3% 185 220 252 42.0% 36.5% 36.6% Agroton AGT 57 103 122 6 33 42 9.7% 32.6% 34.4% 14 12 19 neg 11.2% 15.3% Sintal SNPS 45 60 83 6 14 23 12.8% 24.0% 27.6% 2 11 18 4.4% 17.7% 21.7% MCB Agricole 4GW1 37 59 70 8 20 21 20.2% 33.3% 29.5% 6 17 19 15.6% 29.2% 27.1% C Stirol STIR 293 692 820 32 124 126 neg 18.0% 15.3% 54 81 88 neg 11.7% 10.8% B Total Assets Total Equity Total Income Net Profi t Return on Equity Raiffeisen Bank Aval BAVL 6,948 7,020 7,476 812 861 924 708 722 642 0 51 63 0.0% 6.2% 7.0% Ukrsotsbank USCB 5,227 4,971 5,021 825 879 873 445 476 466 4 66 88 0.5% 7.7% 10.1% Bank Forum FORM 287 270 306 360 334 277 241 284 288 72 164 186 9.8% 47.2% 60.9% Universalna Insurance* SKUN 33 31 37 25 31 32 4 1 2 Source: Eavex Research *Instead of Total Assets is taken GPW

www.eavex.com.ua 7 Market Data October 13, 2011

MAIN TRADING MULTIPLES

Ticker MCap Free Float EV P/E EV/EBITDA EV/Sales EV/Output Units USD mn % USD mn USD mn 2010 2011E 2012E 2010 2011E 2012E 2010 2011E 2012E 2010 2011E 2012E S Mariupol Ilyicha MMKI 432 0.9% 4 389 neg neg neg 6.4 20.2 >30 0.1 0.1 0.1 71 61 57 $/tonne Arcelor Mittal KR KSTL n/a 2.9% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a $/tonne Alchevsk Steel ALMK 262 3.9% 10 884 neg >30 neg neg 8.2 11.8 0.7 0.4 0.5 305 263 237 $/tonne Yenakievo Steel ENMZ 51 9.0% 5 35 neg neg neg neg neg neg 0.0 0.0 0.0 14 13 13 $/tonne Azovstal AZST 774 4.1% 32 833 neg neg neg >30 11.7 15.1 0.3 0.2 0.2 149 140 134 $/tonne Zaporizhstal ZPST 1,715 2.7% 46 1,912 >30 neg neg 23.9 >30 >30 1.2 0.9 1.0 562 502 456 $/tonne DniproSpetzStal DNSS 174 14.5% 25 334 24.2 4.1 8.2 8.1 4.4 5.8 0.7 0.5 0.5 880 733 611 $/tonne C Avdyivka Coke AVDK 148 9.0% 13 146 neg 11.2 >30 2.2 2.3 2.8 0.2 0.1 0.1 42 32 26 $/tonne Alchevsk Coke ALKZ 132 2.3% 3 154 neg neg neg 21.9 18.0 >30 0.2 0.2 0.2 53 44 43 $/tonne Yasynivsky Coke YASK n/a 9.0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a $/tonne I O M Centralny GOK CGOK 906 0.5% 5 902 5.6 3.1 3.7 3.0 2.0 2.3 1.6 1.2 1.3 Pivnichny GOK SGOK 2,463 0.5% 14 2,582 7.4 3.6 4.2 3.5 2.3 2.6 2.1 1.5 1.6 Ferrexpo FXPO 3,062 24.0% 735 3,036 7.2 5.1 6.1 5.2 3.8 4.4 2.3 1.8 1.9 C M Komsomolets Donbasa SHKD 73 5.4% 4 275 neg 13.0 8.6 5.8 5.6 4.8 1.8 1.7 1.5 67 64 61 $/tonne Pokrovske Mine SHCHZ n/a 4.0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a $/tonne Mining Machinery Druzhkivka Machinery DRMZ 47 22.7% 11 46 4.2 8.3 6.1 3.1 4.4 3.7 0.4 0.5 0.5 Svitlo Shakhtara HMBZ 21 22.8% 5 20 2.9 2.5 2.3 1.6 1.4 1.3 0.4 0.3 0.3 P M Khartsyzk Pipe HRTR 288 2.0% 6 329 13.4 5.7 7.0 6.9 4.2 4.8 1.0 0.6 0.7 1118 756 939 $/tonne Interpipe NTRP NITR n/a 4.6% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a $/tonne Interpipe NMPP NVTR 21 7.4% 2 32 neg 15.3 7.8 3.2 1.7 1.5 0.2 0.2 0.2 175 152 136 $/tonne R M Mariupol Heavy Machine MZVM 1 19.5% 0 327 neg neg neg 26.5 neg neg 1.0 3.4 3.3 LuganskTeplovoz LTPL 73 4.7% 3 86 neg >30 27.6 neg 10.6 7.5 0.8 0.5 0.4 Krukiv Wagon KVBZ 262 4.7% 12 274 7.0 4.3 3.9 3.7 2.8 2.7 0.5 0.4 0.3 Stakhanov Wagon SVGZ 99 8.0% 8 127 3.0 3.2 2.6 3.4 2.8 2.3 0.3 0.3 0.2 S M Sumy Frunze Engineering SMASH 44 8.0% 4 71 1.1 5.3 4.1 2.1 2.0 1.9 0.2 0.2 0.2 Turboatom TATM 264 12.8% 34 242 11.1 8.3 7.2 6.7 5.2 4.4 2.0 1.6 1.3 Motor Sich MSICH 449 20.0% 90 460 2.9 2.2 1.9 2.1 1.9 1.7 0.7 0.6 0.5 A I Bogdan Motors LUAZ 117 8.0% 9 467 neg >30 9.1 13.2 8.8 7.6 2.0 0.9 0.7 T Ukrtelecom UTLM 939 7.2% 68 1,286 neg >30 13.4 7.8 6.4 5.5 1.5 1.4 1.4 O  G Ukrnafta UNAF 2,895 8.0% 232 2,913 8.8 6.2 5.3 5.3 4.0 3.5 1.2 1.2 1.2 n/a n/a n/a $/boe Concern Galnaftogaz GLNG 487 8.5% 42 777 12.6 9.7 7.3 9.4 6.6 5.5 0.7 0.5 0.5 n/a n/a n/a $/boe JKX Oil & Gas JKX 447 50.4% 225 555 21.1 6.0 3.7 4.3 3.2 2.2 2.9 2.1 1.4 146 101 76 $/boe E U CentrEnergo CEEN 320 21.7% 70 401 >30 >30 9.3 14.2 11.8 4.8 0.6 0.4 0.4 27 25 23 $/MWh DniproEnergo DNEN 529 2.5% 13 577 22.2 8.3 6.1 6.8 4.8 3.9 0.7 0.6 0.5 37 38 35 $/MWh DonbasEnergo DOEN 68 14.2% 10 110 neg neg 3.7 neg 7.9 2.8 0.3 0.2 0.2 14 11 10 $/MWh ZakhidEnergo ZAEN 397 4.8% 19 467 neg 12.7 11.2 >30 14.9 6.8 0.8 0.6 0.5 41 38 35 $/MWh C Slavutych Brevery SLAV n/a 6.7% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Sun InBev Ukraine SUNI n/a 13.0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a MHP MHPC 1,240 34.4% 427 2,037 5.8 5.9 6.0 6.3 5.7 5.4 2.2 2.0 1.9 6366 6366 6366 $/tonne Kernel KER 1,570 58.4% 917 2,035 10.4 8.1 8.4 10.7 6.8 7.0 2.0 1.3 1.3 Astarta AST 563 31.0% 175 710 6.2 5.4 5.9 6.0 5.2 5.6 2.9 1.9 1.7 3601 2192 1821 $/tonne Avangardco AVGR 607 22.5% 137 695 3.3 2.8 2.4 3.6 2.7 2.3 1.6 1.2 1.0 157 120 113 $/mneggs Agroton AGT 182 44.6% 81 214 neg 15.8 9.8 >30 6.4 5.1 3.7 2.1 1.8 1.6 1.4 1.2 $'000/ ha Sintal SNPS 70 36.3% 25 70 >30 6.6 3.9 12.1 4.9 3.1 1.5 1.2 0.8 0.8 0.8 0.6 $'000/ ha MCB Agricole 4GW1 34 24.4% 8 30 5.8 1.9 1.8 4.0 1.5 1.5 0.8 0.5 0.4 0.4 0.4 0.3 $'000/ ha C Stirol STIR 97 9.7% 9 93 neg 1.2 1.1 neg 0.8 0.7 0.3 0.1 0.1 93 38 34 $/tonne B P/E P/Book P/Assets Raiffeisen Bank Aval BAVL 577 4.0% 23 >30 11.3 9.2 0.7 0.7 0.6 0.08 0.08 0.08 Ukrsotsbank USCB 356 4.5% 16 >30 9.5 7.1 0.8 0.7 0.7 0.12 0.13 0.12 Bank Forum FORM 170 4.0% 7 6.7 3.0 2.6 1.3 1.4 1.7 1.69 1.79 1.58 Universalna Insurance* SKUN n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Source: Eavex Research *Instead of P/Assets is taken P/GPW

www.eavex.com.ua 8 Market Data October 13, 2011

UKRAINIAN EUROBONDS Price Price YTM YTM Price chg. Modifi ed Coupon Maturity Volume Issue (Bid) (Ask) (Bid) (Ask) (YTD) Duration Coupon Period Date mn USD Ratings1 S E Ukraine, 2011 99.3 100.2 10.26% 5.39% na 0.2 6.70% S/A 12.21.2011 600 B2/B+/B Ukraine, 2012 96.5 98.0 11.61% 9.29% 5.85% 0.7 6.385% S/A 06.26.2012 500 /B+/B Ukraine, 2013 93.5 94.0 12.02% 11.67% 10.74% 1.5 7.65% S/A 06.11.2013 1000 /B+/B Naftogaz Ukraine, 2014 90.9 92.7 13.31% 12.53% 15.98% 2.5 9.50% S/A 09.30.2014 1595 //B Ukraine, 2015 (EUR) 78.0 80.0 12.19% 11.43% 16.84% 3.6 4.95% A 10.13.2015 600* B2/B+/B Ukraine, 2015 83.8 85.3 12.17% 11.63% 17.49% 3.4 6.875% S/A 09.23.2015 500 B2/B+/B Ukraine, 2016 84.0 88.0 10.70% 9.58% 15.58% 4.2 6.58% S/A 11.21.2016 1000 B//B Ukraine, 20162 86.0 87.3 9.73% 9.39% na 4.3 6.25% S/A 06.17.2016 1250 B2/B+/B Ukraine, 2017 86.3 87.0 9.78% 9.59% 13.32% 4.8 6.75% S/A 11.14.2017 700 B2/CCC+/B Ukraine, 2017 Infr. projects 96.0 98.0 9.22% 8.78% 8.13% 4.5 8.375% S/A 11.03.2017 568 B2// Ukraine, 2018 Infr. projects 82.2 85.6 11.32% 10.49% na 4.9 7.40% S/A 04.20.2018 690 B2// Ukraine, 2020 86.0 87.0 10.16% 9.97% 14.85% 6.3 7.75% S/A 09.23.2020 1500 B2/B+/B Ukraine, 2021 88.0 89.0 9.93% 9.75% na 6.4 7.95% S/A 23.02.2021 1500 B2/B+/B C E Agroton, 2014 80.0 89.0 22.56% 17.64% na 2.2 12.50% S/A 07.14.2014 50 //B MHP, 2015 87.0 89.5 15.05% 14.54% 15.26% 2.9 10.25% S/A 04.29.2015 585 B3//B Avangardco, 2015 71.0 71.0 20.93% 20.93% 26.04% 3.1 10.00% S/A 10.29.2015 200 //B Mriya, 2016 80.0 80.0 17.58% 17.58% na 3.4 10.95% S/A 3.30.2016 250 /B/B DTEK, 2015 90.0 92.0 13.08% 12.31% 11.05% 2.8 9.50% S/A 04.28.2015 500 B2//B Metinvest, 2015 93.9 96.3 12.36% 11.51% 11.55% 2.8 10.25% S/A 05.20.2015 500 B3//B Metinvest, 2018 86.5 88.5 11.81% 11.32% na 4.7 8.75% S/A 02.14.2018 750 B2//B Ferrexpo, 2016 87.5 90.5 11.51% 10.44% na 3.7 7.875% S/A 04.07.2016 500 B2/B+/B Interepipe, 2017 n/a n/a n/a n/a n/a 4.2 10.25% S/A 08.02.2017 200 /B+/B+ B E Alfa Bank Ukr, 2012 97.3 97.3 19.97% 19.97% 5.86% 0.5 13.00% Q 07.30.2012 841 /CCC+/ Fin&Credit Bank, 2014 50.0 70.0 49.04% 29.29% 29.20% 1.9 10.50% S/A 01.25.2014 100 Caa1// FUIB, 2014 84.9 90.0 17.22% 14.97% 12.92% 2.6 11.00% Q 12.31.2014 275 B2//B Nadra Bank, 2017 55.0 75.3 32.05% 18.42% 4.86% 4.3 8.00% A 06.22.2017 175 WD//WD PrivatBank, 2012 96.6 98.0 19.12% 14.38% 2.69% 0.3 8.00% S/A 02.06.2012 500 B1//B PrivatBank, 2015 79.8 85.4 16.51% 14.34% 16.05% 3.2 9.38% S/A 09.23.2015 200 B1//B PrivatBank, 2016 65.0 70.0 17.67% 15.54% 29.38% 3.5 8.75% S/A 02.09.2016 150 B1//B UkrEximBank, 2012 95.5 98.0 11.78% 8.96% 4.15% 0.9 6.80% S/A 10.04.2012 250 B1//B UkrEximBank, 2015 86.0 88.0 13.45% 12.67% 15.73% n/a 8.38% S/A 04.27.2015 750 B1//B UkrEximBank, 2016 70.0 73.9 15.52% 13.98% 26.35% 3.5 8.40% S/A 02.09.2016 125 B1//B Ukrsibbank, 2011 99.8 99.8 8.76% 8.76% 2.68% 0.2 7.75% S/A 21.12.2011 500 B1//B VAB Bank, 2014 59.8 59.8 38.6% 38.6% n/a 2.3 10.50% Q 06.14.2014 125 WD Oschadbank, 2016 79.0 81.2 14.9% 14.1% na 3.6 8.25% S/A 03.10.2016 700 B2//B M E City of Kyiv, 2012 90.1 94.4 18.23% 13.70% 5.26% 1.0 8.25% S/A 11.26.2012 250 B1/CCC+/B City of Kyiv, 2015 75.0 78.0 16.68% 15.45% 15.34% 3.3 8.00% S/A 11.06.2015 250 B1/CCC+/B City of Kyiv, 2016 74.5 77.0 17.45% 16.51% na 3.4 9.375% S/A 06.30.2016 300 B1/CCC+/B 1 Moody’s/S&P/Fitch; * EUR Source: Bloomberg, Cbonds, Eavex Research

SOVEREIGNS vs. BANKING EUROBONDS SOVEREIGNS vs. CORPORATE and MUNICIPAL EUROBONDS 40% 22% F&C Bank 14 Avangardco 15 Agroton 14 20% 35% VAB Bank 14 18% Kiev 16 30% Mriya 16 Kiev 12 Kiev 15 16% Nadra Bank 17 25% MHP 15 14% Alfa Bank 12 DTEK 15 20% Metinvest 18 12% Privatbank 16 Metinvest 15 Ferrexpo 16 Privatbank 12 Privatbank 15 FUIB 14 Oschadbank 16 15% 10% Ukreximbank 16 Yield to Maturity Yield to Maturity Yield to Ukreximbank 12 Ukreximbank 15 10% 8%

6% 5% 4% 0% 2% 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 Modifi ed Duration Modifi ed Duration Source: Bloomberg, Cbonds, Eavex Research www.eavex.com.ua 9 October 13, 2011

UKRAINIAN DOMESTIC BONDS Modifi ed Coupon Volume Issue Price (Bid) Price (Ask) YTM (Bid) YTM (Ask) Duration Coupon Period Maturity Date mn USD UA4000061089 100.1 100.1 6.35% 3.50% #N/A N/A 25.14% S/A 12/10/2011 48 UA4000062012 100.4 101.2 16.71% 9.30% 0.1 20.00% S/A 11.23.2011 174 UA4000048219 100.2 100.5 15.34% 14.64% 0.3 15.60% S/A 02.22.2012 363 UA4000053920 100.4 100.7 15.29% 14.69% 0.4 15.70% Q 4/4/2012 88 UA4000053912 100.5 100.7 15.29% 14.69% 0.4 15.70% S/A 11/4/2012 174 UA4000063564 101.5 108.0 18.98% 10.92% 0.8 20.00% S/A 12/9/2012 275 UA4000061451 105.0 105.5 15.29% 14.69% 0.8 20.00% S/A 10.31.2012 177 UA4000064018 102.1 111.6 18.99% 10.94% 1.1 20.00% S/A 02.20.2013 121 UA4000048508 92.4 93.2 17.26% 16.76% 1.6 12.00% S/A 10.23.2013 93 UA4000048391 89.0 101.5 19.52% 11.49% 1.6 12.00% S/A 6/11/2013 52 UA4000108823 86.5 87.3 19.26% 18.76% 1.7 10.97% S/A 01.29.2014 338 UA4000115117 78.9 100.3 23.50% 10.90% 2.0 10.75% S/A 03.26.2014 191 UA4000051403 93.2 108.7 20.00% 11.98% 1.9 15.60% S/A 05.14.2014 125 UA4000064166 90.3 109.0 20.01% 11.99% 2.4 15.00% S/A 01.28.2015 57 VAT Bonds UA4000082531 76.5 77.7 21.52% 20.52% 1.34 5.50% S/A 08.21.2015 256 UA4000082622 76.4 77.6 21.52% 20.52% 1.34 5.50% S/A 08.24.2015 1039 UА4000083059 76.4 77.6 21.52% 20.52% 1.35 5.50% S/A 08.25.2015 756 Source: Bloomberg, Cbonds, Eavex Research

DOMESTIC BONDS YIELD CURVE

25%

23% VAT Bonds 21%

19%

17%

15% Yield to Maturity Yield to

13%

11%

9%

7% 0.0 0.5 1.0 1.5 2.0 2.5 3.0

Modifi ed Duration Source: Bloomberg, Cbonds, Eavex Research

www.eavex.com.ua 10 October 13, 2011

Eavex Capital Yuriy Yakovenko Evropa Plaza Chairman of the Board 33 Shevchenko Blvd. [email protected] Floor 11 Kyiv, Ukraine, 01032 SALES & TRADING RESEARCH

Telephone: +38 044 590 5454 Pavel Korovitskiy Volodymyr Dinul Facsimile: +38 044 590 5464 Managing Director Head of Research Equity and Fixed Income [email protected]

Email: offi [email protected] [email protected]

Webpage: www.eavex.com.ua Alexander Klymchuk Ivan Dzvinka Equity & Fixed Income Research Associate [email protected] [email protected]

Iryna Gulenko Dmitry Churin Equity & Fixed Income Sales Research Associate [email protected] [email protected]

Dmytro Kaganovskyi Iryna Levkivska Equity & Fixed Income Sales Research Associate [email protected] [email protected]

Igor Parshakov Dmitry Biriuk Equity Trading Research Associate [email protected] [email protected]

Artem Mateshko Will Ritter Equity Trading Research Editor [email protected] [email protected]

INVESTMENT BANKING Anatoliy Zaslavchik Managing Director Corporate Finance & IBD [email protected]

STRATEGY Arthur McCallum Head of Strategy [email protected]

Investing in emerging markets’ securities may entail certain risks. There This document is based on data we deem to be reliable, though we do not guarantee its accuracy or may be limited information available on such securities. Securities of completeness and make no warranties regarding results from its usage. Forecasts are estimates by emerging markets’ companies may be less liquid and their prices more specialists working for us, and actual events may turn out to be fundamentally different due to unforeseen volatile than securities of comparable developed markets’ companies. In circumstances. This document is provided for information purposes only. addition, exchange rate movements may have an adverse effect on the value of an investment. Copyright 2011 Eavex Capital. All rights reserved. www.eavex.com.ua 11