Market comment

Ukranian stocks tumbled on Monday (UX -7.3, WIG-Ukraine -4.1%) as global equities were overtaken by fears a political impasse in Greece would result in its exit from the Eurozone. Declines were posted across the Ukrainian equity universe, including all stocks in both the UX and WIG-Ukraine index baskets, with just two of the liquid names finishing up. Several stocks recorded double-digit losses, including Astarta (AST PW) -10.3%, Industrial Milk Company (IMC PW) -11.4%, Azovstal (AZST PW) -11.0% and Yenakiieve Steel (ENMZ UK) -13.1%. On the London Stock Exchange, Ferrexpo (FXPO LN) dropped 5.4% and MHP (MHPC LI) plunged 8.3%. Ukraine’s 5Y USD CDS quotations widened 39 bps to 831, their highest level since mid-April.

Politics

EU Ministers do not agree on Ukraine Euro-2012 boycott
The European Union Council of Foreign Ministers, at a meeting yesterday, did not agree on a political boycott of Ukraine hosted matches in the UEFA European Football Championships set to kick off on June 8. The European Commission, led by Jose Manuel Barroso, has already said it will not attend matches in Ukraine over the treatment of jailed former Prime Minister Yulia Tymoshenko.

Brad Wells: As we expected, divisions among European politicians are serving to maintain a tenuous but constructive relationship between the EU and Ukraine. While several EU governments will undoubtedly not send delegates to Ukraine or send them but ask them to not meet with Ukrainian government officials, others will come. However, after Euro-2012, we see Kyiv becoming more and more isolated from Europe. With parliamentary election campaigns set to start just a month after the final match, the current government will be keen to stick to its current course, and not want to appear soft by changing its stance on criminal cases against opposition politicians.

Upcoming events

05/15/12
KSG Agro: Quarterly Report for 1Q12
Kernel: 3Q12 Results
Politics: President Viktor Yanukovych to meet with Russian President Vladimir Putin
Milkiland: 1Q12 Results Conference Call
05/16/12
Economy: Retail sales for April 2012
05/17/12
MHP: Unaudited Financial Report for 1Q12
Economy: Construction results for April 2012
Economy: Industrial production for April 2012
05/18/12
Bogdan Motors: 1Q12 Earnings
05/23/12
Coal Energy: Quarterly Report for 3Q FY2012
05/24/12
Ferrexpo: AGM
05/29/12
Westa: Quarterly Report for 1Q12
05/31/12
Trigon Agri: Quarterly Report 1Q12


New research

Bank of Georgia Holdings - Expectedly positive results in 1Q12
Bank of Georgia, the sole subsidiary of Bank of Georgia Holdings (BGH), posted solid 1Q12 financials this week. Net income grew 1.4x yoy (+17% qoq) to USD 24 mln, mainly driven by 11% yoy growth in net interest income to USD 37 mln (with NIM advancing 0.3 pp yoy), tough control of operating costs and improvement in loan quality. The results are supportive of our full-year bottom line estimate of USD 101 mln (+26% yoy), which implies 2012 P/E of 6.0x, a 35% discount to CEE peers. We reiterate our BUY recommendation on BGH with a 12-month TP of USD 23.7 (implying 37% upside), as we think the bank remains one of the most attractive financial sector investments in the CEE universe.

To view the full report, follow this link and login: http://rs.concorde.ua/research/research/research-reports/?get_file=972.

Источник: Конкорд Капитал