EAVEX Weekly

January 31, 2017

Ukrainian Kyiv-listed equities saw subdued activity last week, pausing from an impressive rally that started immediately after the New Year. Most macroeconomic statistics released over the week were positive, including data showing a firm rise in industrial production in December. On the other hand, the attraction of foreign investment, which are badly needed to spur growth, has not improved much. Costs for Ukrainian business to get financing on international markets remains very high due to the overall risk perception of the country. The debut placement of 5-year Eurobonds by Warsaw-listed agro giant Kernel with coupon rate of 8.75% confirmed our concerns regarding high borrowing rates. Nevertheless, the widespread attention to Kernel’s bond placement from global portfolio investors is an encouraging indication that Ukraine is becoming more interesting for foreign capital with the military situation in the Donbass occupied territories having been more or less frozen for the last 16 mo