Weekly report November 6, 2016

6 November 2016

Despite crude oil declined by 10% during last week, steel&ore prices further increased driven by good news from China. Agri-commodities prices in Ukrainian ports have been stable.

Stocks

Largest Ukrainian companies share prices weekly dynamics
Company Currency Price Weekly change, % Price, USD Weekly change, %
MHP USD 9.07 -6.5% 9.07 -6.5%
Kernel PLN 59.91 -3.2% 15.41 -1.5%
Ferrexpo GBP 101 -2.9% 126.4 -3.9%
Astarta PLN 50.0 -6.2% 12.86 -4.7%
Ovostar PLN 91.0 0.0% 23.41 1.5%
IMC PLN 7.1 -0.5% 1.83 1.1%

Decline of world stocks indexes also reflected on share prices of Ukrainian public companies. WIG-Ukraine (Ukrainian stocks on WSE index) declined from 521 to 504 the lowest level since the end of August. Decline was driven by Astarta (-6.2%) and Kernel (-3.2%). Latter just offset gains of previous week (main part of Kernel price decline happened on Friday), while share price of Astarta came back to the levels of late-August. The largest Ukrainian sugar producer is to report its Q3 financials on November 10 (taking into account good harvest of the company, increased world sugar prices and rather good grains prices, we expect good financial results).

Moving to London and its stock exchange, we note that the largest fall among Ukrainian companies (traded on both WSE and LSE) during the week was demonstrated by MHP, which share price declined from USD 9.7 to USD 9.1. Share price of Ferrexpo, after large movements during last weeks, related to the fact that its second largest shareholder sold almost half of its holding in the company through the placement to institutional investors, consolidated in GBP 100-105 range. With each week of relatively high (at above USD 55/ton level) iron ore price index, perspectives of Ferrexpo (which is to repay about USD 200M of its debt in Y2017) improve.

Commodities

Iron ore price index extended its rally and finished the week at about USD 65/ton level, the highest since the April-May highs. During last two weeks iron ore 62% Fe price index grew by almost 20%, which is highly favorable for Ukrainian producers like Metinvest and Ferrexpo. Steel prices in China also keep growing adding about 5-7% on the last week.

Agri-commodities prices in Ukrainian ports mainly remained stable (despite weekly decline of corn and soybeans on the world market by 2%), supported by forward sales of some traders at higher than spot prices. CPT corn price was mainly at USD 152-153 per 1 ton, soybeans USD 365-370/ton, wheat in range USD 149-160 (depending on quality), sunflower oil about USD 760 per 1 ton.

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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