Weekly report February 26, 2017

26 February 2017

Iron ore in China reached local highs in the beginning of the week, but decreased by its end (leading to drop in Ferrexpo share price), grains prices are stable, slight growth of Ukrainian companies in Warsaw.

Stocks

Largest Ukrainian companies share prices weekly dynamics
Company Currency Price Weekly change, % Monthly change, % Capitalization, USD M
MHP USD 9.15 1.7% 1.7% 967
Kernel PLN 79.0 1.9% 7.5% 1 541
Ferrexpo GBx 160.8 -6.2% 24.5% 1 168
Astarta PLN 61.2 1.1% -3.7% 374
Ovostar PLN 91.0 -0.5% 4.8% 134
IMC PLN 9.64 7.1% 2.3% 74

Champion of the week among the largest Ukrainian public companies was Industrial Milk Company, share price of which grew by more than 7% (so that its current market capitalization stands at USD 74M). On the last week IMC reported its main production figures for Y2016, the most important takeaways record-high corn and soybeans yields, which should provide for good financial performance of the company in current season (historically corn accounts for more than 50% of IMC sown area).

On the other hand Ferrexpo share price declined vs. previous week close by 6.2% to GBX 160.8 (though it was as high as GBX 175 in the middle of reporting week), largely as a result of iron ore share price correction on Thursday and as most likely part of investors decided to fix their profits related to recent share price growth of the company (since the start of Y2017 and till February 23 it made more than 30%) amid uncertain further prospects of iron ore.

Other largest Ukrainian companies such as Kernel (which is to report its financials for Q2 FY2017 on February 28), Astarta (the company disclosed main preliminary financial figures for Y2016 on reporting week) and MHP showed much less price volatility.

Commodities

In the beginning of last week iron ore price in China kept growing, having reached new local maximum at almost USD 95/t before sliding to USD 90.5/t by Friday close. Positive news for iron ore price in January Chinese crude steel output has been by 7.4% larger than a year ago, though iron ore stocks at Chinese ports remains at the highest levels since at least Y2004.

Steel prices in China had similar to iron ore dynamics, reaching the highest levels since late Y2013 in the beginning of reporting week.

As for agri-commodities prices, grains prices in Chicago slightly declined vs. previous week by 1-2%, which though almost did not reflect on the local prices in Ukrainian ports: during the week corn mainly traded at close to USD 156-157/t, soybeans slightly grew up to USD 380-385/t (we note good demand on Ukrainian soybeans during last weeks), wheat USD 161-175/t. We can expect certain growth of Ukrainian wheat premium, as in a view of active export in first half of current season, we expect that till June Ukraine will export just 2-2.5M tons of wheat.

Due to high stocks in ports Ukrainian sunflower oil price on CPT terms reached USD 715-720/t vs. USD 740-750/t for January beginning of February.

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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