EAVEX Weekly

June 30, 2020

Locally listed Ukrainian equities were mostly lower last week amid notably negative corporate news regarding two out of the six UX index blue chips. The index fell 2.7% to 1318 points. Partly state-owned UkrNafta (UNAF) once again made unpleasant headlines by selling its extracted crude oil at auction for just USD 18 per barrel, while the global benchmark price was roughly twice as high. We estimate that the company de-facto gave away USD 50mn in the deal. The UNAF stock dropped by 3.1% to UAH 126 per share after the auction price became public. Another majority state-owned company, CentrEnergo (CEEN), saw its stock decline by 7.2% to UAH 6.40 after the head of State Property Fund (SPF) Dmytro Sennichenko commented that CentrEnergo’s coal-fired thermal power plants are loss-making at the moment. We view this statement as controversial due to the ongoing problems in the Ukrainian coal industry and the non-transparent coal purchasing procedures at CentrEnergo. There was also a report tha