Weekly report January 15, 2017

15 January 2017

Week in a glance: rally of Kernel and Astarta in Warsaw, steel and iron ore prices are near the highest levels for the last two years, agri-commodities prices stability.

Stocks

Largest Ukrainian companies share prices weekly dynamics
Company Currency Price Weekly change, % Monthly change, % Capitalization, USD M
MHP USD 9.0 2.5% 2.9% 951
Kernel PLN 73.9 11.5% 12.8% 1 428
Ferrexpo GBP 131.1 1.2% -5.5% 947
Astarta PLN 60.0 5.1% 12.1% 364
Ovostar PLN 85.0 0.0% 1.2% 124
IMC PLN 8.40 0.8% 1.9% 64

Since December16 share prices of the largest Ukrainian companies traded on Warsaw Stock Exchange Kernel Holding and Astarta increased by more than 12%, driving WIG-Ukraine up to the highest level since October13 (since January16 index grew by 56%).

Share price of the largest Ukrainian sugar producer and soybeans processor Astarta started to grow since the start of Y2017, positive for its dynamics were news about factual acquisition (planned since August) by Canadian investment fund Fairfax Financial Holdings of 10% Astarta shares from its principal shareholders. Purchase price made PLN 60, which was higher than market price as of the date of acquisition (PLN 54.7 per share). Since then market price increased up to PLN 60 per share, reaching the highest level since February14. Current market capitalization of the company stands at about USD 365M.

Share price of Kernel grew by 11.5% during last weak. Current share price of the largest Ukrainian sunflower oil producer is PLN 73.9, capitalization of the company is USD 1.428bln. In Kernel case share price of the company reached the highest level since Y2012. After below average results for Q1 FY2017, on the last week Kernel reported rather strong results for the last quarter.

In London share price of MHP returned to USD 9 level, during last two years its volatility is lower vs. other large Ukrainian public companies. Current market capitalization of the largest Ukrainian poultry producer is USD 951M.

After rally in H2 2016 Ferrexpo price consolidated in the range of GBP 130-140 per share, finishing last week at the level of GBP 131 (current market capitalization is USD 947M). On last Monday Ferrexpo reported its production for Q4 and the whole Y2016. In addition the company provided key operating figures for the last year on the basis of which we estimated its total revenues in Y2016 at close to USD 1bln, EBITDA about USD 365M. With the rally on iron ore market in Q4 2016, short-term perspectives of the company significantly improved.

Commodities

Spot iron ore price in China are still close to 27-month high level reached in the beginning of December (USD 83.6 per 1 ton). Last week close about USD 81 per 1 ton. Steel prices in China during last week grew by more than 6% and are close to local highs as well.

Agri-commodities prices since mid-December are rather stable both on Chicago Exchange and in the Ukrainian ports. Current CPT corn price is at about USD 151-153/t, wheat 151-164/t (depending on quality), soybeans USD 370-375/t, sunflower oil USD 750/t.

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Company Price, USD Market Cap Change,%
MHP
Kernel
Ferrexpo
Astarta
Ovostar

Type Price Weekly change,% Annual change,%
Corn CBOT
Wheat CBOT
Iron Ore
Crude Oil

Currency Rate Weekly change,% Annual change,%
USD/UAH
EUR/USD
USD/RUR