Fixed Income

October 17, 2017

Ukraine’s local stock market took a pause from its gains after reaching a 3-year high on the back of strong early autumn buying. Traders once again see risks in hryvnia instability amid a high chance that Kyiv’s cooperation with the IMF will be interrupted by the political decision to freeze energy tariff growth. After five weeks of volatility, the hryvnia has stabilized for now near 26.50 UAH/USD, with knowledge that the National Bank (NBU) has USD 18.6bn in foreign currency reserves helping to deter speculation. The UX index ended flat for the week at 1218 points ahead of the 3-day weekend to mark the new Defenders’ Day holiday on Oct 14. The biggest surprise among the five blue chips was in DonbasEnergo (DOEN). The low liquidity stock jumped 14.4% to UAH 17.35 after the State Property Fund announced that it intends to hold an auction in December to sell the government’s 25% blocking stake. We suppose that the IMF has been pushing Kyiv to get rid of its blocking stakes in energy com