EAVEX Weekly

May 23, 2017

Ukraine’s main equity index fell sharply last week, although the drop was due entirely to the expected technical event of a correction in this year’s best performing issue, Raiffaisen Bank Aval (BAVL), following the passage of the ex-rights date for the bank’s 5.90 kopeck FY16 dividend. The stock fell 25% (by the amount of the dividend) to 19.40 kopecks. In our view, Raiffeisen Aval remains an attractive BUY opportunity, as its 1Q17 net profit was at a record high UAH 1.45bn (USD 54mn), implying earnings per share of 2.36 kopecks. We forecast that the bank will post a net profit of UAH 3.50bn in FY17 and will pay a 5.40 kopeck dividend next year. Overall, the UX index lost 7.8% to close at 930 points, with all of the decline coming at the hands of Raiffeisen Aval. The bright spot among the index’s five components was Motor Sich (MSICH), which advanced by 4.2% to UAH 2193 on news that the company is planning a joint venture to build aircraft engines in China. In the electricity sect