UFC Capital Released Weekly Market View
OREANDA-NEWS. July 25, 2011. Fitch revises outlooks. International rating agency Fitch has improved the outlook on Ukraine's long-term obligation ratings in foreign and local currency from "stable" to "positive". In addition, Fitch's has also boosted the outlooks for ratings of UkrSibbank, Ukrsotsbank (USCB; BUY), Forum (FORM; SELL), ProCredit Bank, Pravex Bank, VTB Bank, Ukreximbank, and Oschadbank. In addition, the rating agency raised the outlook on the long-term issuer default rating (IDR) in foreign currency for DTEK, Metinvest, Kernel Group and Myronivsky Hliboproduct – from stable to positive. The agency also increased DTEK's and Metinvest's national currency rating to positive.
We expected this rating increase earlier in the year, but Eurozone debt problems postponed an adjustment in ratings until now. We expect other rating agencies to follow in improving Ukraine's sovereign ratings and subsequently corporate ratings for Ukrainian issuers.
GDP forecast for 2011 improved. The European Bank for Reconstruction and Development (EBRD) increased GDP growth estimates for
Equity market. External news had a significant influence on the Ukrainian Exchange Index. Foreign companies' financial results, the Eurozone consensus on Greece's debt problem, as well as expectations of a resolution to raise USA's debt ceiling affected the dynamics of the UX. Overall, the Ukrainian Exchange Index grew by 2.22% over the course of the week, finishing at 2353.48 points. The total trading volume on the stock exchange fell 36.2% compared to the week prior. The total trading volume amounted to UAH 804.6 mln (USD 100.9 mln), including UAH 260.8 mln (USD 32.7 mln) on the derivatives market.
Alchevsk Iron and Steel (ALMK; SELL) continued to be the most traded stock on the market, with which there were 3655 transactions for UAH 98.1 mln (USD 12.3 mln). Investors were also interested in Motor Sich (MSICH; BUY) and Centrenergo (CEEN; BUY). Trading volumes for the two companies' stocks amounted to UAH 68.1 mln (USD 8.5 mln) and UAH 63.8 mln (USD 8.0 mln) respectively.
On the order-driven market, the largest drop in share value was observed in Komsomolets Donbasa Coalmine (SHKD) stock, which fell by 14.3%. Quotes on the stock changed directions several times during the week. Among the most liquid stocks, the best performing were Luganskteplovoz (LTPL) and Ukrnafta (UNAF; SELL). For the week, share values of the two companies increased 7.53% and 6.11% respectively.
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