EAVEX Weekly

January 12, 2017

The Ukrainian stock market saw subdued activity in the holiday-shortened first trading week of 2017. However, traders paid close attention to developments on the currency market, as the hryvnia was volatile despite the NBU’s attempts to dissuade speculators from betting on a devaluation. The NBU reported that it has USD 15.5bn in foreign reserves to support the national currency. The reserves figure is 17% higher than a year ago, and now covers an equivalent of 3.7 months of the country’s imports. Nonetheless, it would be overly optimistic to rule out devaluation of the hryvnia in the coming year. In the short term, if the IMF disburses a planned USD 1.0bn tranche to Ukraine by the end of this month, we expect a strengthening of the hryvnia by 3-5% from the current level of 27.20 UAH/USD. The UX index was little changed from 793 points, where it finished 2016. In individual stocks, Raiffeisen Bank Aval (BAVL) remained a bright spot among blue chips closing at 13.08 kopecks per shar