1 august 2008
Despite last week's strengthening of PFTS index by 2.58% the market continued sideways movement. The real trading activity still remained weak, in spite of some increase at the end of month due to efforts of traders to improve their ratings.
The market was still influenced by the news from foreign trading floors. So publication by some American companies of their accounting exceeding expectations of analysts, appearance of hypothesis about achieving the «bottom» of writing-offs of Merrill Lynch in connection with the company's transaction on sale of considerable part of troubled assets, extension by FRS of the program of primary dealers crediting and US President's enaction of the law on real estate market support resulted in growth of optimistic moods at the markets in the first half of the week. But later the situation changed due to the publishing of disappointing information on the US GDP (by initial estimation GDP growth in 2Q08 made 1.9% yoy vs. predicted 2.3%) and negative statements of the former FRS chairman Alan Grinspen that a slump at the American real estate market is still far from its «bottom» and the US economy is on the verge of recession. These facts as well as evidence of further growth of unemployment in the world's largest economy (federal employment report showed worsening of situation at the labour market during the seventh month in succession, unemployment rate grew in July from 5.5% to 5.7% – maximal index from March, 2004) became main reasons of markets falling at the end of the week.
It should be noticed that domestic market was not already so sensitive to external negative as in previous weeks that can serve as evidence of certain stabilization at the market. Among reasons of lessening pressure from the side of sellers we can mark seasonal decline of business activity, absence of some clearly defined tendencies at the American market moving sideways for the second week in succession (though with higher volatility), and also possible achievement of its bottom by the Ukrainian stock market. It is likely that the market has finally managed to find its bottom, and now there is consolidation before possible reverse of the trend which however will begin only after non-residents’ return to the market.
Additional support to the market was rendered by positive 2Q08 accounting of majority of listed on PFTS domestic issuers and improvement of macroeconomic situation in Ukraine (by the NBU’s preliminary estimations in 1H08 deficit on current account was reduced to 7.7% of GDP from 9.8% in 1Q08, national debt to gross GDP was reduced in May by 0.8 p.p. yoy to 10.3%).
On results of the week PFTS index rose 2.58% and closed at the level of 649.4 index points. Maximum contribution to the growth of index was made by the shares of Raiffeisen Bank Aval [BAVL UZ] (+7.4%), Centrenergo [CEEN UZ] (+2.7%), Ukrsotsbank [USCB UZ] (+5.6%), Azovstal [AZST UZ] (+3.2%), Avdiyivka Coke [AVDK UZ] (+11.9%). The trading volume made USD 42.9 million (+21.5%), the number of transactions with shares amounted to 1 281 (+9.7%). The shares of metallurgy (23.8% of total turnover), power generation (25.3%) and machine building (11.5%) led by turnover. The leaders of activity were Alchevsk Iron & Steel [ALMK UZ] (135 transactions for USD 1.5 million), Azovstal [AZST UZ] (121 transaction for USD 1.8 million), Enakievo Steel [ENMZ UZ] (95 transactions for USD 1.3 million).
Last week’s most interesting events were:
Power generation
Representatives of the National Joint Stock Company Energy Company of Ukraine and Government Executive Service with support of power structures dismissed Eduard Sokolovskiy as CEO of the country's largest power distribution company Dniproblenergo [DNON UZ], replacing him with Andriy Martyniuk. Dismissed Eduard Sokolovskiy in return classified the power change of Dniproblenergo's management as raider takeover of the company by Privat Group and declared his intention to contest the state’s actions on regaining control over the enterprise in courts and General Prosecutor's Office.
Power generating company Donbassenergo [DOEN UZ] announced its 2Q08 net income of USD 13.85 million. The company's net profit for the similar period increased by 14.5% yoy to USD 112.8 million.
Power generating company Dniproenergo [DNEN UZ] finished 2Q08 with the loss of USD 3.8 million. Its net profit for the similar period increased by 15.3% yoy to USD 188.8 million.
Power generating company Zakhidenergo [ZAEN UZ] reported its 2Q08 net income of USD 0.5 million. The company’s net profit for the similar period increased by 29.6% yoy to USD 225.8 million. Power generating company Centrenergo [CEEN UZ] announced its 2Q08 net income of USD 9.8 million. The company’s net profit for the similar period increased by 21.3% yoy to USD 187.1 million.
Metallurgy
At their EGM shareholders of Zaporizhstal [ZPST UZ] – the fifth in size metallurgical enterprise in Ukraine – voted to make a dividend payout of USD 114.2 million (UAH 554 million) or 100% of the company's 2007 net income. Dividends per share of about $0.043, dividend yield of 9%.
Ukrainian stock market July 28 – August 01, 2008
Despite last week's strengthening of PFTS index by 2.58% the market continued sideways movement. The real trading activity still remained weak, in spite of some increase at the end of month due to efforts of traders to improve their ratings.The market was still influenced by the news from foreign trading floors. So publication by some American companies of their accounting exceeding expectations of analysts, appearance of hypothesis about achieving the «bottom» of writing-offs of Merrill Lynch in connection with the company's transaction on sale of considerable part of troubled assets, extension by FRS of the program of primary dealers crediting and US President's enaction of the law on real estate market support resulted in growth of optimistic moods at the markets in the first half of the week. But later the situation changed due to the publishing of disappointing information on the US GDP (by initial estimation GDP growth in 2Q08 made 1.9% yoy vs. predicted 2.3%) and negative statements of the former FRS chairman Alan Grinspen that a slump at the American real estate market is still far from its «bottom» and the US economy is on the verge of recession. These facts as well as evidence of further growth of unemployment in the world's largest economy (federal employment report showed worsening of situation at the labour market during the seventh month in succession, unemployment rate grew in July from 5.5% to 5.7% – maximal index from March, 2004) became main reasons of markets falling at the end of the week.
It should be noticed that domestic market was not already so sensitive to external negative as in previous weeks that can serve as evidence of certain stabilization at the market. Among reasons of lessening pressure from the side of sellers we can mark seasonal decline of business activity, absence of some clearly defined tendencies at the American market moving sideways for the second week in succession (though with higher volatility), and also possible achievement of its bottom by the Ukrainian stock market. It is likely that the market has finally managed to find its bottom, and now there is consolidation before possible reverse of the trend which however will begin only after non-residents’ return to the market.
Additional support to the market was rendered by positive 2Q08 accounting of majority of listed on PFTS domestic issuers and improvement of macroeconomic situation in Ukraine (by the NBU’s preliminary estimations in 1H08 deficit on current account was reduced to 7.7% of GDP from 9.8% in 1Q08, national debt to gross GDP was reduced in May by 0.8 p.p. yoy to 10.3%).
On results of the week PFTS index rose 2.58% and closed at the level of 649.4 index points. Maximum contribution to the growth of index was made by the shares of Raiffeisen Bank Aval [BAVL UZ] (+7.4%), Centrenergo [CEEN UZ] (+2.7%), Ukrsotsbank [USCB UZ] (+5.6%), Azovstal [AZST UZ] (+3.2%), Avdiyivka Coke [AVDK UZ] (+11.9%). The trading volume made USD 42.9 million (+21.5%), the number of transactions with shares amounted to 1 281 (+9.7%). The shares of metallurgy (23.8% of total turnover), power generation (25.3%) and machine building (11.5%) led by turnover. The leaders of activity were Alchevsk Iron & Steel [ALMK UZ] (135 transactions for USD 1.5 million), Azovstal [AZST UZ] (121 transaction for USD 1.8 million), Enakievo Steel [ENMZ UZ] (95 transactions for USD 1.3 million).
| Latest value | Chg Wk, index points | Chg Wk, % | Chg YTD, % | ||
|---|---|---|---|---|---|
| 649.4 | +16.31 | +2.58% | -44.69% | ||
| Leaders of growth and decline | |||||
| Issuer | Price change*, % | Trade volume, USD mln | |||
| [KRAZ UZ] AvtoKrAZ | +27.45 | 0.01 | |||
| [KREN UZ] Krymenergo | +24.65 | 0.02 | |||
| [NITR UZ] Nyzhnyodniprovsk Pipe | +14.22 | 0.04 | |||
| [ODEN UZ] Odessaoblenergo | +13.74 | 0.06 | |||
| [PGOK UZ] Poltava Irin Ore | +11.21 | 0.18 | |||
| [RODB UZ] Rodovid Bank | -10.53 | 0.22 | |||
| [NVTR UZ] Novomoskovsky Pipe | -7.64 | 0.01 | |||
| [MSICH UZ] Motor Sich | -1.88 | 2.22 | |||
| [FORM UZ] Bank Forum | -0.40 | 0.02 | |||
| [DNEN UZ] Dniproenergo | -0.30 | 2.18 | |||
| Leaders of trading | |||||
| Issuer | Trade volume, USD mln | Transactions | |||
| [CEEN UZ] Centrenergo | 5.41 | 69 | |||
| [DNSS UZ] Dniprospetsstal | 2.76 | 16 | |||
| [MSICH UZ] Motor Sich | 2.22 | 82 | |||
| [DNEN UZ] Dniproenergo | 2.18 | 4 | |||
| [DMZP UZ] Dnipropetrovsk Metallurgical Plant n.a. Petrovsky | 1.85 | 18 | |||
Last week’s most interesting events were:Power generation
Representatives of the National Joint Stock Company Energy Company of Ukraine and Government Executive Service with support of power structures dismissed Eduard Sokolovskiy as CEO of the country's largest power distribution company Dniproblenergo [DNON UZ], replacing him with Andriy Martyniuk. Dismissed Eduard Sokolovskiy in return classified the power change of Dniproblenergo's management as raider takeover of the company by Privat Group and declared his intention to contest the state’s actions on regaining control over the enterprise in courts and General Prosecutor's Office.
Power generating company Donbassenergo [DOEN UZ] announced its 2Q08 net income of USD 13.85 million. The company's net profit for the similar period increased by 14.5% yoy to USD 112.8 million.
Power generating company Dniproenergo [DNEN UZ] finished 2Q08 with the loss of USD 3.8 million. Its net profit for the similar period increased by 15.3% yoy to USD 188.8 million.
Power generating company Zakhidenergo [ZAEN UZ] reported its 2Q08 net income of USD 0.5 million. The company’s net profit for the similar period increased by 29.6% yoy to USD 225.8 million. Power generating company Centrenergo [CEEN UZ] announced its 2Q08 net income of USD 9.8 million. The company’s net profit for the similar period increased by 21.3% yoy to USD 187.1 million.
Metallurgy
At their EGM shareholders of Zaporizhstal [ZPST UZ] – the fifth in size metallurgical enterprise in Ukraine – voted to make a dividend payout of USD 114.2 million (UAH 554 million) or 100% of the company's 2007 net income. Dividends per share of about $0.043, dividend yield of 9%.
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