EAVEX Weekly

July 31, 2017

Ukrainian equities were on the rise last week, boosted by better-than- expected earnings results and a global rally in commodities, including iron ore and steel. Additional positive background was provided by preliminary data that said the Ukrainian economy grew by 2.5% YoY in 1H17. The UX index advanced by 3.7% to 1121 points, its highest level since early 2015. Electricity stocks CentrEnergo (CEEN) and DonbasEnergo (DOEN) outperformed the market. CentrEnergo (CEEN) added 7.0% to UAH 11.50 after the company posted an impressive UAH 5.47 earnings per share for 1H17. DonbasEnergo (DOEN) has not published its 2Q17 report, but the stock surged by 12% to UAH 14.50 on news that the State Property Fund (SPF) will conduct an auction for the sale of a 25% stake in the company with a starting price of UAH 113 per share. We think that the SPF has overestimated DonbasEnergo’s fair value, given that the company’s most valuable asset, the Starobeshivska power plant, has been seized by pro-Russian