Daily Insight Ukrproduct and XXI Century in the Spotlight

Focus UKRAINE Scope CAPITAL MARKETS

Daily Insight Ukrproduct and XXI Century in the spotlight

THURSDAY, 30 APRIL, 2009 RESEARCH INSIGHT

Market comment Key rates and indices (as of 29 Apr 2009) Last Daily YTD FX and capital markets yesterday chg1 (%) chg1 (%)

The hryvnia weakened towards 8.07/USD as of the end of yesterday after trading Currencies within a thin bound of 8.05-8.07/USD most of the day, according to the Reuters USD/UAH (spot) 8.0700 1.38 3.46 data. The equities shifted broadly higher yesterday, as the PFTS index closed up USD/UAH (1Y NDF) 11.5000 0.00 -14.18 at 333.72 points, up 3.67% compared to the previous session. EUR/USD (spot) 1.3263 0.91 -5.12 Money market Equity market KievPRIME O/N (%) 2.20 20bp -2,078bp KievPRIME 1M (%) 17.10 0bp -668bp XXIC seeks to postpone Eurobond put date to 8 July, 2009 Bond markets As part of its US$175m Eurobond restructuring efforts, XXIC held a conference EMBI+ Ukraine 1,884 0.27 580.14 Equity markets call on 23 April to discuss the proposed restructuring terms. The outcome was PFTS (Ukraine) 333.72 3.67 10.72 twofold: 1) the bondholders representing US$135m in aggregate principal RTS (Russia) 814.78 3.92 28.94 amount have expressed in writing their intention to exercise their put option; and WIG (Poland) 28,273.93 3.50 3.84 2) the bondholders representing the majority of the principal amount have S&P 500 (USA) 873.64 2.16 -3.28 suggested that the company seek a “standstill” to postpone the put exercise date Note: 1) percentage change if not otherwise stated. to 8 July, 2009. XXIC has already launched solicitation for this and has Sources: NBU, PFTS, Thomson Reuters, Cbonds, ICU. scheduled a bondholder meeting for 21 May, 2009 to resolve the proposed standstill. In the meantime, XXIC will seek further discussions of the proposed PFTS Index (3 months to 30 Apr 2009)

restructuring terms, with the intention of to finalizing them before the proposed 350.0 standstill is over. 330.0 310.0 290.0 Investment implications: This news changes nothing on our fundamental 270.0 case on the stock: XXIC continues to face difficulties in generating cash to 250.0 230.0 cover its debt obligations falling due in May 2009; its project development 210.0 190.0 plans are beyond consideration at this stage. The stock price is likely to be 170.0 volatile on speculative trading interest, we estimate. Fundamentally, we do 150.0 not see reason for exposure to XXIC before some light is shed on a 29-Jan 1-Mar 1-Apr possible dilution of the minority shareholders as a result of its debt Source: PFTS. restructuring efforts.

USD/UAH (3 months to 30 Apr 2009)

9.50 9.30 9.10 8.90 8.70 8.50 8.30 8.10 7.90 7.70 7.50 29-Jan 1-Mar 1-Apr

Source: Thomson Reuters.

Research team

Alexander Valchyshen [email protected] http://www.investcapital.com.ua Bloomberg: ICUA , Thomson Reuters: Svitlana Drygush

[email protected] READ THE DISCLOSURES SECTION FIRST FOR IMPORTANT DISCLOSURES AND Sergiy Byelyayev ANALYST CERTICATION. [email protected]

30 April 2009 Ukraine Capital Markets Daily Insight

Ukrproduct reports positive FY08 results Ukrproduct (UKR LN), a large branded dairy producer in Ukraine, reported its FY08 revenues at GBP52.3m (8.7% YoY) and its gross profit at GBP10.8m (3.4% YoY). Branded products were the main contributor – 73% and 84%, correspondingly (52% and 60% in FY07), while the skimmed milk product (SMP) revenues halved to 22% of FY08 net revenues on weak global pricing. UKR’s overheads grew ahead of revenues, at 16-28% YoY, thus contributing to a 13.4% YoY lower EBITDA of GBP4.8m and 30% YoY lower net profit of GBP2.3m. Profitability dropped correspondingly: from 11% in FY07 to 9% in FY09 at the EBITDA level, and from 7% to 4% at the net profit level; ROE dropped from 23% in FY07 to 14.5% in FY08.

Ukrproduct has retained its long-term focus on the branded processed and hard cheese products, claiming presence in 8 out of 10 major retail chains across Ukraine by the YE08. This has positively reflected in its reported P&L, which is likely to last beyond FY08, in our view. In 1H08, UKR spent GBP1.4m in capex to expand its cheese and milk collection capacities to support the above strategy; future capex will be limited to maintenance. UKR had GBP0.7m in cash at YE08, its Debt/EBITDA was at a comfortable 0.7x.

Investment implications: We believe the reported set of results is positive and exceed the FY06 results, when the company’s operations were hit by the Russian ban on dairy imports. Thanks to the manageable debt levels, most of which are in hryvnia, we believe UKR is better positioned to generate profits in FY09 compared to its FX-debt loaded peers. Ukrproduct’s product mix covers both mass market and premium brands, and it enjoys a 25% plus market share in its key product segments, which we believe provides UKR with sufficient price leverage to ensure positive margins going forward. The stock trades at a 2.0x EV/EBITDA and 2.9x P/E on FY08 actual results, or at a 30-57% discount to the EM peers, which we would only justify by an extremely low liquidity in the stock.

30 April 2009 Ukraine Capital Markets Daily Insight

Table 1. Ukrproduct: peer trading multiples

Price MktCap. EV Bloomberg P/E (x) EV/EBITDA (x) EV/Sales (x) EBITDA margin (%) $ $m $m Ticker 2007 2008E 2009E 2007 2008E 2009E 2007 2008E 2009E 2007 2008

Emerging Markets Vitasoy 0.4 462 443 345 HK 17.0 13.4 12.5 8.9 7.3 6.6 1.4 1.2 1.1 16 16 Inner Mongolia 2.1 1,749 1,640 600887 CH neg -9.8 37.8 25.4 -14.9 12.7 0.6 0.5 0.5 2 -3 Fraser & Neave 1.7 2,391 5,889 FNN SP 8.2 10.6 9.1 9.3 10.4 9.5 1.8 1.9 1.6 19 18 Nestle India 34.0 3,277 3,232 NEST IN 30.8 na na 18.7 na na 3.7 na na 20 Na Tiger Brands 15.4 2,678 2,880 TBS SJ 10.1 10.8 9.6 8.2 7.3 6.6 1.2 1.1 1.0 15 15 WBD 41.5 1,827 2,211 FNH MK 12.4 22.0 12.6 6.1 7.7 6.3 0.8 1.0 0.9 13 13 EM peers- Mcap weighted average 14.4 6.8 11.5 13.3 2.9 6.2 1.9 0.9 0.8 15 9 Developed Markets Morinaga Milk 3.0 760 1,758 2264 JP 35.7 26.3 23.8 6.7 na na 0.3 0.3 0.3 4 Na Yakult Honsha 17.2 3,030 2,917 2267 JP 17.6 27.6 27.1 8.2 7.9 8.0 0.9 1.0 1.0 11 12 Agrana Beteiligungs 64.0 912 1,839 AGR AV 10.7 -65.7 15.8 7.2 10.7 7.7 0.7 0.7 0.7 10 6 Bongrain 49.1 765 1,537 BH FP 20.1 11.5 11.2 8.7 7.9 7.1 0.4 0.4 0.4 5 5 Danone 50.6 26,116 40,816 BN FP na 14.5 13.1 11.4 10.8 10.0 2.0 2.0 1.9 18 19 Dean Foods 19.8 3,050 7,503 DF US 16.6 11.9 10.8 8.6 8.0 7.6 0.6 0.6 0.6 7 8 Greencore Group 1.1 226 588 GNC LN na 6.2 5.0 4.2 4.4 4.3 0.3 0.4 0.3 8 8 Nestle 33.2 124,662 141,205 NESN VX 7.9 13.5 12.7 8.8 8.4 8.1 1.5 1.4 1.4 17 17 Premier Foods 0.5 1,205 3,815 PFD LN neg 6.2 5.1 6.8 6.7 6.4 1.0 1.0 0.9 14 14 Robert Wiseman Dairies 5.0 363 437 RWD LN 12.7 11.7 11.1 5.0 5.2 4.7 0.4 0.4 0.3 8 7 Unilever 19.8 59,925 71,059 ULVR LN 9.0 12.4 11.1 7.9 8.4 7.7 1.3 1.3 1.3 17 16 DM peers- Mcap weighted average (%) 8.8 13.0 12.3 8.7 8.5 8.1 1.5 1.4 1.4 16 17 Ukrproduct 0.21 10 15 UKR LN 2.9 2.9 na 1.8 2.0 na 0.2 0.2 na 11 9 Ukrproduct vs. EM peers -80 -57 na -87 -30 na -90 -79 na Ukrproduct vs. DM peers -68 -78 na -80 -76 na -87 -87 na

Sources: Bloomberg

30 April 2009 Ukraine Capital Markets Daily Insight

Table 2. Ukrproduct: P&L

Revenue breakdown FY06 FY 2007 FY 2008 YoY (%)

Revenue Branded 25.16 38.20 51.85 SMP 20.41 11.56 -43.36 Other 2.55 2.55 0.35 Gross Profit Branded 6.26 9.14 45.90 SMP 3.80 1.27 -66.51 Other 0.39 0.41 3.84

Income statement 2006 2007 2008 YoY (%) Revenue 35.10 48.11 52.31 8.7 Cost of Sales -27.80 -37.65 -41.49 10.2 Gross profit 7.20 10.46 10.82 3.4 Administrative expenses -2.70 -2.77 -3.22 16.3 Selling and distribution expenses -2.60 -2.92 -3.73 27.7 Other operating expenses 0.00 -0.62 -0.84 35.2 EBITDA 2.80 5.52 4.78 -13.4 Profit from operations 1.40 4.15 3.03 -27.0 Finance expense -0.20 -0.49 -0.59 20.1 Profit before taxation 1.20 3.68 2.44 -33.7 Income tax expense -0.10 -0.42 -0.16 -61.0 Profit for the year 1.10 3.26 2.28 -30.2 Margins (%) Gross 21 22 21 EBITDA 8 11 9 Net 3 7 4

Sources: Company data

30 April 2009 Ukraine Capital Markets Daily Insight

Foreign exchange market

Table 3. Spot exchange rates of USD/UAH and USD/EUR and offshore NDF market exchange rates of USD/UAH

Last close (29-Apr-2009) Previous (28-Apr-2009) Daily change (%) YoY change (%) YTD change (%)

USD/UAH (spot) 8.0700 7.9600 1.38 68.83 3.46 USD/UAH NDF (3M) 8.6000 8.6000 0.00 70.50 -18.10 USD/UAH NDF (6M) 9.5000 9.5000 0.00 86.68 0.00 USD/UAH NDF (1Y) 11.5000 11.5000 0.00 123.86 -14.18 USD/EUR (spot) 1.3263 1.3144 0.91 -14.80 -5.12

Source: Thomson Reuters.

Chart 1. Exchange rate (USD/UAH) and NBU interventions Chart 2. FX market turnover

Last 3 months to 30-Apr-2009 Last 12 months to 30-Apr-2009

Close bid NBU intervention All currencies (lhs) USD (lhs) Close bid (rhs)

9.40 (USD/UAH) 2500.0 (US$m) (USD/UAH) 0.00 9.20 9.00 2000.0 2.00 8.80 1500.0 4.00 8.60 8.40 1000.0 6.00 8.20 8.00 500.0 8.00 7.80 7.60 0.0 10.00 29-Jan 12-Feb 26-Feb 12-Mar 26-Mar 9-Apr 23-Apr 29-Apr-08 29-Jun-08 29-Aug-08 29-Oct-08 29-Dec-08 1-Mar-09

Sources: National Bank of Ukraine, Thomson Reuters. Note: right-hand scale is inverted. Sources: National Bank of Ukraine, Thomson Reuters.

Money market

Table 4. Money market rates KievPRIME (% per year)

Last close (29-Apr-2009) Previous (28-Apr-2009) Daily change (bp) MoM change (bp) YTD change (bp)

Overnight 2.20 2.00 20 -55 -2,078 1 week 6.20 6.10 10 -249 -1,718 1 month 17.10 17.10 0 -53 -668 2 months 15.40 15.85 -45 -298 -783 3 months 15.20 15.90 -70 -368 -838

Source: Thomson Reuters.

Chart 3. Money market rates (Kiev PRIME) Chart 4. Liquidity indicators

Liquidity injection (rhs) O/N (lhs) 1M (lhs) 3M (lhs) Banks' balances with cbank Treasury account balance

70.0 3.0 (%) (UAHbn) 25.0 (UAHbn) 60.0 2.5 20.0 50.0 2.0 40.0 15.0 1.5 30.0 10.0 1.0 20.0 5.0 10.0 0.5 0.0 0.0 0.0 29-Jan 12-Feb 26-Feb 12-Mar 26-Mar 9-Apr 23-Apr 29-Jan 12-Feb 26-Feb 12-Mar 26-Mar 9-Apr 23-Apr

Sources: National Bank of Ukraine, Thomson Reuters. Sources: National Bank of Ukraine, State Treasury of Ukraine.

30 April 2009 Ukraine Capital Markets Daily Insight

Bond market

Chart 5. EMBI+ performance Chart 6. Implied yields of USD/UAH offshore NDF market

Last 3 months to 30-Apr-2009 Last 3 months to 30-Apr-2009

EMBI+ EMBI+ Ukraine 3M 6M 1Y

3000.0 (bp) 90.0 (%) 80.0 2500.0 70.0 2000.0 60.0 50.0 1500.0 40.0 1000.0 30.0 20.0 500.0 10.0 0.0 0.0 22-Sep 29-Sep 6-Oct 13-Oct 20-Oct 27-Oct 3-Nov 10-Nov 29-Jan 12-Feb 26-Feb 12-Mar 26-Mar 9-Apr 23-Apr

Source: CBonds.info. Sources: Thomson Reuters, ICU.

Table 5. Domestic bond market quotations: government bonds (closing prices as of 29-Apr-2009)

Ticker Issuer Coupon Maturity Bid Ask Last price Bid YTM Ask YTM Last YTM Trade volume rate (%) (% of par) (% of par) (% of par) (%) (%) (%) (UAH)

14377 Ministry of Finance 6.59 23-Jun-10 100.118 6.66 0.00 20406 Ministry of Finance 14.40 30-Jun-09 96.800 100.585 35.00 10.36 0.00 20909 Ministry of Finance 11.94 30-Dec-09 91.891 99.082 28.00 14.10 0.00 22400 Ministry of Finance 9.40 2-Sep-09 94.838 28.00 0.00 22509 Ministry of Finance 9.50 28-Sep-11 102.282 108.598 8.74 5.81 0.00

Note: Bid, Ask and Last price are clean prices that are indicated as a percentage of face value. Source: PFTS, ICU.

Table 6. Domestic bond market quotations: municipal bonds (closing prices as of 29-Apr-2009)

Ticker Issuer and bond’s Coupon Put/ Bid Ask Last price Bid YTM Ask YTM Last YTM Trade volume series rate (%) Maturity (% of par) (% of par) (% of par) (%) (%) (%) (UAH)

OLUGB Lugansk (B) 10.40 31-Oct-11 93.603 100.549 100.000 14.14 10.54 10.81 109,622.57 OZAPRD Zaporizhya (D) 11.50 7-Jul-09 100.090 11.04 0.00 OODESC Odesa (C) 14.00 31-Dec-10 95.436 17.95 0.00 OLVIVB Lviv (B) 9.95 19-Dec-12 90.892 13.79 0.00 OLUGA Lugansk (A) 10.40 31-Oct-11 93.706 100.549 14.09 10.54 0.00 OLTSKA Lutsk (A) 12.00 17-Dec-09 87.515 100.000 40.00 12.68 0.00 OKOMSA Komsomolsk (A) 12.00 31-Jul-09 100.074 12.22 0.00 OCHERA Cherkasy (A) 12.00 27-Dec-10 100.064 12.50 0.00 ODON2C Donetsk (C) 12.00 7-Sep-09 86.323 98.773 98.783 69.75 16.47 16.44 1,004,600.00 OZAPRE Zaporizhya (E) 12.00 6-Jul-10 90.660 105.660 22.34 7.04 0.00 ODONCB Donetsk (B) 11.75 11-Jul-10 102.121 10.22 0.00

Note: Bid, Ask and Last price are clean prices that are indicated as a percentage of face value. Source: PFTS, ICU.

30 April 2009 Ukraine Capital Markets Daily Insight

Table 7. Domestic bond market quotations: corporate bonds (closing prices as of 29-Apr-2009)

Sector Ticker Issuer and bond’s series Coupon Put/ Bid Ask Last price Bid YTM Ask YTM Last YTM Trade volume rate (%) Maturity (% of par) (% of par) (% of par) (%) (%) (%) (UAH 000)

METALLURGY Iron and steel mills CODSTA Donetsksteel (A) 13.00 5-Oct-09 82.208 78.97 0.00

MACHINERY Automobile manufacturing OLUAZA LuAZ (A) 14.00 15-Jun-09 38.313 81.313 160,625.73 454.80 0.00 OLUAZB LuAZ (B) 13.50 12-May-09 42.115 86.115 1,381,679, 6,578.13 0.00 922,522.50

FOOD AND BEVERAGES Sugar manufacturing OPDILA Podillya (A) 17.00 29-May-09 67.159 87.159 12,604.50 497.08 0.00

AGRICULTURE Poultry and egg production OAVAA Avangard (A) 17.00 25-May-09 6.973 107.056 19,566,801 -53.51 0.00 ,055,438,4 00.00

TRANSPORTATION Airports OMABA3 Boryspil Intl Airport (A) 10.00 19-Apr-10 78.953 109.753 42.05 -0.03 0.00

CONSTRUCTION Residential construction OKGSTA Kyivmiskbud-1 (A) 14.00 11-Dec-09 98.918 101.697 16.80 11.58 0.00

TRADE Wholesale trade OUAHA Ukraine Auto Holding (A) 15.00 5-Apr-10 99.398 106.055 16.64 8.45 0.00 Food and beverage stores COKVTC Kviza-Trade (C) 24.00 7-Apr-11 95.459 102.973 29.94 23.95 0.00

MACHINERY AND EQUIPMENT SUPPLIES Rental and Leasing Services OELZB Euro Leasing (B) 18.00 8-Oct-09 89.014 102.464 55.56 12.76 0.00

FINANCIAL SERVICES Commercial banking OCREDC Credit-Dnipro (C) 16.50 4-Nov-09 2.096 96.949 115,040.23 24.39 0.00 COKPBF Creditprombank (F) 11.50 9-Jun-09 10.659 58.425 98.425 17,066,835 12,041.77 28.61 3,010.00 ,611.58 COKPBH Creditprombank (H) 11.25 21-Oct-09 102.286 6.52 0.00 COKPBI Creditprombank (I) 11.50 20-Oct-10 100.063 102.379 11.95 10.11 0.00 COENRA Energobank (A) 25.00 18-Dec-09 97.397 99.931 33.15 27.68 0.00 OFNINB Financial Initiative Bank (B) 20.00 7-Dec-09 17.206 107.207 2,373.96 7.96 0.00 COPUMB FUIB (A) 15.50 22-Jun-09 100.429 13.02 0.00 OPUMBB FUIB (B) 21.00 9-Apr-10 104.207 16.63 0.00 OIMEXA Imexbank (A) 15.00 22-May-09 77.205 95.736 6,079.88 126.49 0.00 OIMEXB Imexbank (B) 17.00 30-Nov-09 77.299 90.035 85.00 41.77 0.00 OHYPBA Ipobank (A) 15.00 25-Nov-09 100.082 100.911 15.67 13.99 0.00 OBXRE Khreshchatyk Bank (E) 13.00 17-May-09 97.471 100.471 88.29 3.40 0.00 OMGBE Megabank (E) 18.00 7-Dec-09 17.485 95.811 2,235.56 28.16 0.00 OBPVA2 Pivdenny (A) 18.00 11-Jan-10 99.211 100.296 20.63 18.71 0.00 OPCBF ProCredit Bank (F) 17.75 30-Sep-10 97.459 21.35 0.00

30 April 2009 Ukraine Capital Markets Daily Insight

Sector Ticker Issuer and bond’s series Coupon Put/ Bid Ask Last price Bid YTM Ask YTM Last YTM Trade volume rate (%) Maturity (% of par) (% of par) (% of par) (%) (%) (%) (UAH 000)

OBVLC Raiffeisen Bank Aval (C) 13.50 21-Jan-10 78.745 90.055 55.00 30.00 0.00 COBVLE Raiffeisen Bank Aval (E) 10.00 11-Nov-09 82.304 94.915 55.00 20.44 0.00 COBVLF Raiffeisen Bank Aval (F) 11.00 11-Nov-09 61.349 160.05 0.00 ORODBA Rodovid Bank (A) 15.75 22-Sep-09 101.694 113.446 11.82 -15.13 0.00 ORODBB Rodovid Bank (B) 15.75 3-Aug-09 97.409 111.202 28.52 -22.31 0.00 ORODBC Rodovid Bank (C) 15.75 3-Aug-09 94.638 111.202 43.41 -22.31 0.00 OUGZBA Ukrgazbank (A) 16.00 16-Jul-09 79.430 102.930 241.18 2.23 0.00 OUGZBD Ukrgazbank (D) 16.00 22-Sep-09 78.422 103.622 115.80 6.90 0.00 OUGZBE Ukrgazbank (E) 16.00 22-Dec-09 78.422 103.822 72.04 10.20 0.00 OUSCD Ukrsotsbank (D) 12.50 16-Aug-10 47.535 87.535 82.535 110.21 26.17 32.45 170.00 OVBNF VAB Bank (F) 18.00 31-May-10 79.332 50.00 0.00 Savings banks OSCHDA Oshchadbank (A) 10.25 13-Aug-09 94.775 102.878 33.10 0.33 0.00 OSCHDB Oshchadbank (B) 10.50 12-Aug-10 75.326 85.799 82.055 40.03 25.77 30.48 5,051.94 Other non-depository credit intermediation ODIUI SMI (I) 9.50 22-Dec-11 99.948 9.87 0.00

Note: 1) bonds with total outstanding higher than or equal to UAH100m are listed; 2) Bid, Ask and Last price are clean prices that are indicated as a percentage of face value. Sources: PFTS, ICU.

30 April 2009 Ukraine Capital Markets Daily Insight

Equity market

Table 8. Key equity market indicators

Close (29-Apr-2009) Daily change (%) MoM change (%) YoY change (%) YTD change (%)

PFTS Index 333.72 3.67 49.22 -95.43 10.72 Trade volume (US$m) 12.11 Market capitalisation (US$m) 21,877.36

Sources: PFTS, ICU.

Chart 7. PFTS equity market index and trade turnover Chart 8. Relative performance of equity indices

Last 3 months to 30-Apr-2009 Last 3 months to 30-Apr-2009

Volume (rhs) Index (lhs) S&P 500 RTS WIG PFTS

360.0 (US$m) 160.0 170.0 340.0 140.0 160.0 320.0 120.0 150.0 140.0 300.0 100.0 280.0 130.0 80.0 260.0 120.0 110.0 240.0 60.0 40.0 100.0 220.0 90.0 200.0 20.0 80.0 180.0 0.0 70.0 29-Jan 12-Feb 26-Feb 12-Mar 26-Mar 9-Apr 23-Apr 29-Jan 12-Feb 26-Feb 12-Mar 26-Mar 9-Apr 23-Apr

Sources: PFTS, ICU. Sources: PFTS, ICU.

Chart 9. Breakdown of total turnover by traded equities (%) Chart 10. Top 10 most traded shares

100% = US$12.1m (US$m) Other shares CEEN 2500.0 21.06 17.28 2093.7 1998.0 DMZP 2000.0 0.10 1529.5 1500.0 DOEN 1197.4 3.59 UNAF SMASH 16.49 1000.0 740.6 545.5 540.9 3.88 ENMZ 4.46 AVTO 500.0 12.62 AZST 0.0 4.50 KRHLB SHCHZ CEEN UNAF AVTO SHCHZ KRHLB AZST ENMZ 6.11 9.88

Sources: PFTS, ICU. Sources: PFTS, ICU.

Chart 11. Gainers – top 10 shares by daily price increase Chart 12. Losers – top 10 shares by daily price decline

(%) (%) 14.0 0.0 11.5 12.0 -0.5 10.0 8.5 -1.0 8.0 -1.5 -1.0 -1.4 -1.4 -1.4 -1.4 -1.4 6.0 4.1 -2.0 3.0 -2.0 4.0 2.7 2.4 -2.5 2.0 1.1 1.1 0.6 0.6 -3.0 -2.9 0.0 -3.5 KVBZ BAVL AVDK CEEN ENMZ AZST ALMK MSICH UNAF ZAEN DNEN PGZK KIEN SHCHZ KSTL ZPST ZFER DNSS

Sources: PFTS, ICU. Sources: PFTS, ICU.

30 April 2009 Ukraine Capital Markets Daily Insight

Table 9. PFTS shares (closing prices as of 29-Apr-2009)

Sector Ticker Company Bid Ask Price1 Daily YTD Volume 52wk avg Market (US$) (US$) (US$) Chg (%) Chg (%) (US$ 000) volume2 Cap3 (US$ 000) (US$m)

ENERGY Fossil fuel electric power generation DNEN Dniproenergo 74.349 84.263 79.306 -2.88 31.89 0.00 327.86 316.06 DOEN Donbasenergo 3.965 4.263 4.175 14.59 12.65 435.40 44.57 98.71 KIEN Kyivenergo 0.991 1.487 1.239 -1.36 14.17 0.00 66.86 134.28 CEEN Tsentrenergo 0.719 0.737 0.731 3.00 9.67 2,093.69 249.37 270.07 ZAEN Zakhidenergo 42.689 42.999 42.965 0.59 -15.40 104.02 375.50 549.54 Electric power distribution ODEN Odesaoblenergo 0.124 0.310 0.217 -1.36 -58.53 0.00 38.48 61.73 Oil and gas UNAF Ukrnafta 13.147 13.383 13.147 0.63 -10.99 1,998.02 189.29 712.97 Coal mining SHCHZ Chervonoarmiyska-Zakhidna No.1 0.213 0.242 0.235 -1.36 5.95 1,197.38 89.00 199.78

METALLURGY Iron ore mining PGZK Southern Iron Ore 0.991 1.029 1.010 -1.96 -2.82 0.00 59.13 2,178.19 Iron and steel mills ALMK Alchevsky Metalurgic Plant 0.010 0.010 0.010 1.15 -3.71 148.89 109.96 107.49 AZST Azovstal 0.120 0.120 0.120 2.38 7.29 545.50 274.11 676.08 DNSS Dniprospetsstal 148.699 223.048 185.874 -1.03 -45.31 0.00 99.38 217.14 KSTL Mittal Steel Kryviy Rih 0.781 1.239 1.010 -1.36 -9.11 0.00 27.07 3,108.67 ENMZ Yenakievo Steel 10.781 10.874 10.781 2.74 57.84 540.86 180.39 1,118.04 ZPST Zaporizhstal 0.105 0.180 0.143 -1.36 175.99 0.00 42.34 376.73 Pipe and tube manufacturing HRTR Khartsyzk Pipe Plant 0.124 0.149 0.136 8.50 15.96 0.00 905.65 68.00 Ferroalloy manufacturing ZFER Zaporizhsky Ferroalloy Plant 0.037 0.173 0.105 -1.36 -8.42 0.00 200.82 240.14 Foundry coke manufacturing ALKZ Alchevsky Coke Plant 0.021 0.037 0.029 -1.36 6.08 0.00 95.59 68.82 AVDK Avdiyivsky Coke Plant 0.701 0.736 0.713 4.07 24.30 123.33 276.91 137.95

CHEMICALS Nitrogenous fertilizer manufacturing STIR Concern Stirol 2.664 3.222 2.943 4.12 -29.42 0.00 59.84 75.63

MACHINERY Railroad rolling stock manufacturing KVBZ Kryukovsky Rail Car Plant 1.389 1.444 1.400 11.46 19.02 134.45 59.04 160.58 Automobile manufacturing LUAZ LuAZ 0.017 0.019 0.018 -0.86 -13.00 16.00 88.34 60.52 AVTO Ukrainian automobile corporation 7.435 9.913 8.055 -19.86 5.35 1,529.45 81.05 50.99 Aircraft product and parts manufacturing MSICH Motor Sich 49.566 51.425 50.805 1.10 4.34 400.92 183.73 105.57

FINANCIAL SERVICES Commercial banking BAVL Raiffeisen Bank Aval 0.020 0.021 0.020 8.50 -34.83 210.78 217.26 466.16 USCB Ukrsotsbank 0.020 0.021 0.021 4.29 -28.47 183.70 201.37 76.11

Note: 1) the table lists those companies a) the shares of which have average daily turnover for the last 52-week period of more than or equal to US$25 thousand and b) that have market capitalization of more than or equal to US$50m; 2) Price is calculated as a) average between best bid and best ask if there was no turnover with the share or last price exceeds the range between best bid and best ask for the trading session; or b) last price of trades with the share; 3) market capitalization. Sources: PFTS, ICU.

30 April 2009 Ukraine Capital Markets Daily Insight

Disclosures

ANALYST CERTIFICATION

This research publication has been prepared by the analyst(s), whose name(s) appear on the front page of this publication. The analyst(s) hereby certifies that the views expressed within this publication accurately reflect her/his own views about the subject financial instruments or issuers and no part of her/his compensation was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views within this research publication.

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MANAGING DIRECTOR Konstantin Stetsenko [email protected]

HEAD OF RESEARCH Alexander Valchyshen [email protected]

Investment Capital Ukraine LLC is regulated by Securities and Stock Market State Commission of Ukraine (licence numbers: dealer activity AB 440399, broker activity AB 440398, underwriting activity AB 440400, securities management activity AB 440401 dated 17 November 2008).

DISCLAIMER

This research publication has been prepared by Investment Capital Ukraine solely for information purposes for its clients. It does not constitute an investment advice or an offer or solicitation for the purchase of sale of any financial instrument. While reasonable care has been taken to ensure that the information contained herein is not untrue or misleading at the time of publication, Investment Capital Ukraine makes no representation that it is accurate or complete. The information contained herein is subject to change without notice. Copyright and database rights protection exists in this report and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of Investment Capital Ukraine LLC. All rights are reserved. Any investments referred to herein may involve significant risk, are not necessarily available in all jurisdictions, may be illiquid and may not be suitable for all investors. The value of, or income from, any investments referred to herein may fluctuate and/or be affected by changes in exchange rates. Past performance is not indicative of future results. Investors should make their own investigations and investment decisions without relying on this report. Only investors with sufficient knowledge and experience in financial matters to evaluate the merits and risks should consider an investment in any issuer or market discussed herein and other persons should not take any action on the basis of this report.

Additional information if available upon request.