market conditions

It was quite difficult to understand the movement of the Ukrainian stock market yesterday. Having opened with a collapse of more than 1% in the UX index, in contrast to the positive dynamics of European indices, the local market continued its cyclical decline until the end of the day. There were no global reasons for this behavior. There was optimism on Western trading floors caused by news from Spain. Reuters, citing sources in European financial regulators and the German government, reported that Spain is ready to request financial assistance this coming weekend, but Germany opposed such a step. It is expected that the country's request for financial assistance may bring closer the launch of the ECB program to buy government bonds of European troubled countries. This news led to a decrease in the yield on Spanish securities to 5.71%.

The reason for the fall could be the news that the president signed the law “On depository accounting of securities,” notes Altana Capital analyst Sergei Belyasov. As is known, the adoption of the document was opposed by the shareholders of the Ukrainian Exchange, who threatened to close the site if the law was signed in the current version. They are not satisfied with the monopolization of the market for settlement services, which will soon be taken over by a settlement center that does not yet exist. “Nobody knows what will happen next to the exchange after the law is signed,” Vitaly Bulynin, head of the Internet trading department of Navigator-Invest Investment Company, expressed investors’ concerns. On the other hand, Kommersant reported yesterday that tax measures are being prepared that will force securities traders to enter their over-the-counter transactions on stock exchanges, which will automatically increase the profitability of this unprofitable business.

All-day stock selling led to one of the biggest drops in the UX Index in the past month. During the day, its value fell by 3.31%, to 987.86 points. The last time the market was at this level was in early September. Concerns regarding the future of the country's depository system affected all blue chips without exception. Metallurgical and energy enterprises showed a strong decline: Donbasenergo (-5.02%), Alchevsk Iron and Steel Works (-4.05%), Centrenergo (-3.8%), Avdeevka Coke (-3.78%), Enakievo Steel Plant (-3.78%), Azovstal (-3.31%). Representatives of the banking sector bear approximately the same risks: Raiffeisen Bank Aval (-2.63%), Ukrsotsbank (-2.67%). The most protected from the impact of the new accounting system were the securities of Ukrnafta (-1.41%), a company half of which is owned by the state. Nikolay Maksimchuk

The President upset investors