Daily monitor

National Bank of Ukraine (NBU) cut interest rates by 0.75 p.p. to 7.75%. Interest rates on active operations remained unchanged: The refinancing rate on collateralized overnight loans is 9.5% and on blank overnight loans is 11.5%.

According to Interfax-Ukraine, in the period of January-June 2010, Bogdan Corporation (owner of Bogdan Motors [LUAZ UZ]) exported 380 buses, which is a 2.6-fold YoY increase. The export share of the total volume of bus and trolleybus sales exceeded 73%. Russia, Belarus, and Armenia remain the major importers of Bogdan buses.

In a memorandum to the International Monetary Fund, Ukraine has indicated plans for a gradual increase in gas prices for its population in order to bring consumer prices to parity with import prices. Another 50% increase in gas and utilities prices for the population is scheduled for April 2011.

Ukraine’s international reserves grew by 4.6%, to USD 30.9 bln, during July 2010. From January to July 2010, Ukraine’s international reserves grew by USD 4.4 bln (16.5%).

A managing company for Poltava Iron Ore [PGOK UK], British Ferrexpo [FXPO LN] has reported strong financial results for 1H10. Its net revenues increased by 74% YoY to reach USD 526 mln, EBITDA by 257% YoY to USD 215 mln, and income by 383% YoY to USD 139 mln. These outstanding financials resulted from 90–120% growth in the price of pellets compared to last year’s annual benchmark price, and the company’s pellets sales volume grew by 13% YoY, to 4.7 mln tons. At the same time, FXPO’s production costs have increased by only 9% YTD, to USD 37.8.

In July 2010, Interpipe Nyzhnyodniprovsk Pipe Rolling Plant [NITR UZ] decreased production of steel by 18.8% to 39 ths t, railway wheels and bandage production fell by 20% to 12 ths t. January-July steel production showed an 86.3% rise to 285 ths t, output of wheels and bandages rocketed to123.8%, up to 94 ths t.

In July 2010 Bogdan Motors, owner of Bogdan automobile plant [LUAZ UZ] increased car production by 1.8% to 1885 units (excluding Bogdan-2310 pick-up cars). January-July data indicates a 5.3% production decline to 9034 cars (excluding 463 pick-up cars).

According to Interfax-Ukraine, Sumy Frunze Machine Building [SMASH UZ] has announced preliminary results for January-June 2010. The company estimates that YoY sales will decline by 13-15%, blaming contractors from Central Asia for not confirming previous orders as the major reason for the sales fall. Orders from Central Asia accounted approximately USD 100 mln, which is 20-25% of the total order portfolio volume. During 3Q2010 the company is expected to be under-loaded.

During January-July 2010, Bogdan Corporation (owner of the Bogdan Automobile Plant [LUAZ UZ]) reported a 2.94 times increase rise in its YoY bus and trolleybus production, to 518 units. Bogdan Corporation assembles buses at the Bogdan Automobile Plant and Cherkasskyi Avtobus facilities (a 74.58% share belongs to the Bogdan Automobile Plant). According to the company press release, a 40% increase in demand by CIS countries was the major driver for this production increase.

Domestic producers showed decreased coke output in July, by 1.1% MoM, to 1.392 mln tonnes (+8.5% in 7M10), Ukrcoke reported.