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Ukraine Markets Daily (January 29, 2015)

Market news

  • US, Canada to increase financial aid to Ukraine

Market comment

The UX Index was flat on Wednesday, and down by 0.6% in the US dollar terms, while the PFTS index was down by 1.0% in UAH terms. Seven out of ten companies in the UX index were down in the UAH terms with the largest decrease in prices observed for Bank Aval (-2.1%), Alchevsk MP (-1.5%) and Ukrnafta (-1.2%).

On the interbank exchange market, the USD/UAH spot rate was up by 0.6% with the closing price of 16.30 (mid price) on Wednesday, according to Minfin.com.ua, while the average exchange rate reported by the NBU was 15.87.

Ukraine 5-year CDS were down by 0.1% on Wednesday.

 

US, Canada to increase financial aid to Ukraine

According to the statement of the US Treasury Secretary Jacob Lew, the US Government is ready to extend the package of credit guarantees to Ukraine to USD 3 bn (from the previously announced USD 2 bn) in case reforms are implemented in the country. As was stated by Lew, the first tranche of credit guarantees could be provided to the country in 1H2015. He commented that the funds raised under the guarantees of the US government will be used to finance social projects and protect the most vulnerable segments of the population, as well as to adjust financial imbalances. Additionally, Lew noted that the US is waiting for the Ukrainian government’s further steps to address corruption, reform the energy sector and improve the business climate.

Moreover, according to the official press-release on the website of Canada’s Prime Minister Steven Harper, the country intends to grant another CAD 200 mn loan to Ukraine to further promote economic and social stability (Canada provided a first CAD 200 mn low-interest loan to Ukraine in September 2014). The second loan, which will be delivered by Export Development Canada, is part of a broader package of additional international assistance for Ukraine, and will be conditional on the approval of the next review of Ukraine’s IMF-supported program.

Our view:

The news is POSITIVE for the Ukrainian economy. It seems that the international donors of Ukraine are gathering additional funds to support the country as it is faced with economic downturn and negative effect of the continuing conflict in Eastern Ukraine. The necessary condition for the provision of loans, as expected, remains the implementation of reforms program, which should provide the Ukrainian government with additional incentives to accelerate this process.

 

Disclaimer

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Any recommendations, opinions, forecasts, estimates or views herein constitute a judgment as at the date of this report. This document has been produced independently of Empire State Capital Partners and the recommendations, forecasts, opinions, estimates, expectations, and views contained herein are entirely those of the research analyst(s). While all reasonable care has been taken to ensure that the facts presented herein are accurate and that the respective recommendations, forecasts, opinions, estimates, expectations, and views are fair and well considered, none of the research analyst(s), Empire State Capital Partners or any of its directors, managers or employees has verified the contents of this document and, accordingly, no research analyst, Empire State Capital Partners or any of its respective directors, managers or employees shall be in any way responsible for its contents.

 

Ukraine Markets Daily

Market news

  • MHP is to refinance its 2020 Eurobonds with the new issue

Market comment

The UX index remained unchanged on Friday as well as the PFTS index due to holidays. The WIG-Ukraine index increased by 0.6%. On the interbank exchange market, the UAH/USD remained unchanged too at UAH 26.10 (mid price), according to Thomson Reuters. The official exchange rate reported by the NBU was UAH 26.35.

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