Market comment

Обзоры рынка 25.03.2013 Ukrainian equities kept hemorrhaging from the Cyprus fiasco at the Friday, March 22 trading session. The WIG Ukraine Index in Warsaw slid 0.1%, extending its declines to six straight sessions and finishing the week at a 7.3% loss. Shares of farmer Industrial Milk (IMC PW -3.2%) are down 5.1% in two sessions while Coal Energy (CLE PW -3.0%) plunged to its all-time low, finishing the week at a 20.0% loss. Kernel (KER PW +1.8%) lost 9.9% for the week. In London, shares of mining firm Ferrexpo (FXPO LN -1.0%) have fallen 17.1% in five straight losing sessions. Shares of egg producer Avangard (AVGR LI -3.2%) have plummeted 14.2% in five straight declining sessions. Shares of poultry producer MHP (MHPC LI -1.1%) have lost 8.8% in six straight falling sessions. In Kyiv, the Ukrainian Exchange (UX) Index fell 1.9%, weighed down by Alchevsk Steel (ALMK UK -3.8%) and Centerenergo (CEEN UK -3.3%). On the local money markets, liquidity slightly improved last week as correspondent accounts at the NBU increased to UAH 24-25 bln from USD 21-22 bln a week before. Interbank rates remained low at 0.5-1.0% for overnight loans and no higher than 6% for one-month lending. This allowed the Ministry of Finance to place short-term local bonds for the first time this year. In particular, UAH 520 mln in 6-month notes and UAH 305 mln in 9-month notes were both placed at a 7.75% yield, setting a new low benchmark for state’s short-term lending. Success on the primary auctions led to a decline in yields at the secondary bond market, with yields of one-year notes falling 50bps to 10.7%/10.0%. The local currency was nearly stable with minor fluctuations within UAH 8.12-8.14 per US dollar.