Market comment

Обзоры рынка 15.07.2013 Ukrainian equities concluded the week with a mixed performance on Friday, July 12. The WIG Ukraine Index of Warsaw-traded stocks rose 0.9%, fueled by the torrid demand for shares of grain trader Kernel (KER PW 3.2%), which have steadily risen 13.5% in nine straight positive sessions. Coal Energy (CLE PW) bounced 10.7% after hitting its lowest price since its August 2011 IPO in the prior session. Its shares have plummeted 25.7% this month. Milkiland (MLK PW) plunged 8.4%. In London, shares of miner Ferrexpo (FXPO LN) slid 2.6% but remained up by 14.9% for the month. The Ukrainian Exchange (UX) Index of Kyiv-traded stocks advanced 1.7%, driven by surge in demand for Donbasenergo (DOEN UK +13.6%). Ukraine’s Cabinet of Ministers announced the starting price for the sale of the state’s 61% stake, which turned to be double the market price. Ukraine’s banking sector liquidity showed year-to-date highs over the last week. The correspondent accounts of banks at the NBU were at UAH 28-30 bln throughout the week. Due to excess supply of short-term liquidity, interbank rates remained at their lows: 0.5%-1.0% overnight, 2-3% for weekly funding and 4-5% for one-month money. Excess liquidity failed to affect government bond yields as banks were not ready to raise their positions in paper: six-month bonds remained at 8.5%/7.8% and one-year instruments were traded at a 12.0%/11.0% yield. The currency market was calm as well: the hryvnia was within a narrow range of 8.153-8.158 per US dollar.