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Ukrainian Equity Market: Weekly Overview 22-26 November, 2010

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Ukrainian Equity Market: Weekly Overview 22-26 November, 2010 Ukrainian Equity Market: Weekly Overview 22-26 November, 2010 2A Republikas square, Riga, Latvia, LV-1010 Lidiya Mudra, Tel. +371 67010810, Fax +371 67778622 Financial Analyst www.citadeleam.lv [email protected] UX Index • UX index grew by 1.93% during the week 2200 UX • Motor Sich to supply 60-100 engines for Chinese L-15 last week: planes 2050 +1.93% • Kryukiv Railcar reports a shortage of railcar castings 1900 26-Nov-10: • Ukraine’s C/A deficit widens to $907m in October 2,098.15 1750 • Ukraine’s F/A surplus narrows to $329m in October Aug Sep Oct Nov • NBU estimates October GDP growth at 5.6% y/y Last week, the Ukrainian equity market performed quite well, considering the how poorly world markets fared on the back of Europe debt worries and concerns about the possibility of escalating conflict between North and South Korea. As measured by the UX index, the domestic market grew by 1.93% over the reviewed period. In the machine-building sector, jet-engine producer Motor Sich announced plans to contract the production of AI-225-25F engines for the Chinese L-15 trainer planes in late in 2010 or early in 2011. According to the announcement, the company expects to deliver 60-100 of its AI-225-25F engines to China in 2011-12. With an average engine price of some $1m, the contract is estimated to bring $60m-100m in Motor Sich’s sales in the next two years. CEO of Kryukiv Railcar Yevgeniy Khvorost reported that his company faced with a shortage of steel castings as the entire domestic railcar castings output was contracted by Russian VTB-Leasing. According to Mr. Khvorost, the deficit also caused a boost in prices for steel castings that, in turn, raised the company’s costs and threatened its margins. Economy and politics The National Bank of Ukraine (NBU) published preliminary data on the country’s balance of payments for October 2010. According to the NBU’s data, Ukraine’s current account (C/A) deficit widened to $907m in October from $194m in September. The deterioration was caused by a jump in merchandise imports (+8.8%m/m), while exports remained virtually flat (+0.2% m/m). A seasonal decline in the services trade surplus (-52.2% m/m) also contributed to the deterioration in the C/A. For 10m10, Ukraine’s C/A recorded a $1.81b deficit (vs. deficit of 0.78b in 10m09). Ukraine’s financial account (F/A) surplus narrowed to $329m in October from $1.44b in September, due mainly to high outflows of foreign cash from the banking system. In 10m10, Ukraine’s F/A surplus reached $7.67b (vs. deficit of 12.08b in 10m09). The NBU announced it estimated that Ukraine’s economy advanced by 5.6% y/y in October, accelerating from an estimated 5.3-5.5% y/y in September. According to the NBU, Ukraine’s real GDP grew by 4.8% y/y in 10m10, up from 4.7% y/y in 9m10. Weekly Leaders / Laggards Largest Gainers Largest Losers Largest Turnover Turnover, Issuer Change Price Issuer Change Price Issuer USD Regal Petroleum 41.82% 0.20 GBP Sintal Agriculture -7.25% 3.20 EUR Ferrexpo 21.3m Ukrtelecom 12.10% 0.56 UAH Stakhaniv Rail Car -5.29% 7.63 UAH Ukrnafta 15.6m Astarta 9.87% 82.40 PLN Kryukiv Rail Car -4.44% 33.35 UAH Regal Petroleum 12.9m Stirol 6.25% 73.79 UAH JKX Oil&Gas -3.63% 3.13 GBP Kernel Holding 12.6m Raiffeisen Bank Aval 5.48% 0.40 UAH Mriya Agro Holding -2.90% 6.70 EUR Alchevsk Steel 7.7m The information contained in this report was obtained in good faith from sources believed to be reliable. No guarantee, explicit or implicit, is provided with respect to completeness and accuracy of the information. The opinions expressed represent the current opinion of the authors and do not represent the opinion of Citadele Asset Management or any of its affiliates, subsidiaries or representatives. The opinions are subject to change without prior notice. Neither Citadele Asset Management nor any of its affiliates, subsidiaries or representatives accepts the liabilities arising from the possible use of the information contained in this report. This material is provided for informational purposes only and should not be construed as advice to buy, hold or sell a particular security or investment. Any investment you make shall be based solely on your own evaluation of your financial circumstances and investment objectives. .
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