Market comment

The Russian currency crisis spilled into the Ukrainian capital markets on Tuesday, Dec. 16, even though most market participants globally have realized that Ukraine is not Russia. Traders extended their selloff of Ukrainian equities on the European markets. The WIG Ukraine Index of Warsaw-traded stocks dropped 4.2%, or 9.0% in three straight negative sessions. Its biggest component, grain trader and sunflower oil maker Kernel (KER PW), plunged 6.8%, or 11.3% in three straight losing sessions. Another top component, sugar maker Astarta (AST PW) fell 3.8%, or 12.4% in three straight negative sessions. Dairy firm Milkiland (MLK PW) plummeted 8.2%, or 13.4% in two sessions, to its lowest price since its December 2010 IPO.



In London, the most actively traded Ukrainian stock, iron ore miner and pellet maker Ferrexpo (FXPO LN), slid 2.0%, or 26.5% in five straight declining sessions, to its lowest price since March 2009. Europe’s leading egg producer Avangardco (AVGR LI) crashed 30.7% to its lowest price since its April 2010 IPO. Regal Petroleum (RPT LN) plummeted 5.3%. The Ukrainian Exchange (UX) Index of Kyiv-traded stocks increased 0.8%, led by power generator Donbasenergo (DOEN UK +4.5%), which has risen 9.9% in two sessions.



The massive selloff continued in fixed income markets, with the Ukrainian sovereign yield curve moving further upward and getting more inverted. The YTM of the shortest government paper (UKRAIN, Sep. ’15) increased 2,980 bps in the day, while the YTMs of longer bonds advanced 60-75 bps. Most corporate bonds also became cheaper, though they lost much less of their price than state paper. As a result, the 2015 notes of Metinvest (METINV), Privatbank (PRBANK) and Avangardco (AVINPU), as well as the newly restructured bond of First Ukrainian International Bank (PUMBUZ), dived under the sovereign curve.

Источник: Конкорд Капитал