Daily monitor

The Ukrainian Government has submitted its recommendation to the National Energy Regulatory Commission (NERC) to increase the investment surcharge on Centerenergo’s [CEEN UZ] power tariffs. This move was made to enable the power generating Company to cover its loans and implement its planned investments. The investment surcharge would provide additional revenues in the amount of UAH 28 mln in 2009, UAH 51 mln in 2010-2013, and UAH 25 mln in 2014.

On November 4, 2009, the Agroton agro-industrial holding successfully carried out a private placement of 25% of its stock through depositary receipts, which will be listed on the Frankfurt SE as of November 12. Agroton placed 4 mln depositary receipts, issued at a ratio of 1:1 to the Company’s stocks. It managed to raise USD 42 mln, with the price of each receipt at USD 10.50. According to the results of the placement, the Company's capitalization has reached USD 168 mln.

The Ministry of Fuel and Energy has published October data on power production and consumption. Ukrainian electricity consumers used 1.7% more energy in October 2009 than in October 2008 and 14.7% more than consumed in September 2009. In October 2009, Ukrainian power generating companies increased their amalgamated output by 1.7% compared to October 2008 and by 13.5% compared to September 2009. The 10M09 power output, however, was still 12% lower YoY.

Azovmash, a Ukrainian trading house affiliated with Azovzagalmash [AZGM UZ, SELL] and Mariupol Heavy Machinery [MZVM UZ, Speculative BUY], has signed a contract to deliver charging equipment to the Hungarian company Dunaferr (a member of the Ukrainian ISD group). The equipment is to be delivered to the client by June 2010. The value of this agreement has not yet been disclosed.

The Fitch international rating agency has upgraded its long-term ratings, in national and foreign currency, for the National Joint-Stock Company Naftogaz from RD (Restricted Default) to CCC. The agency also awarded a ‘B’ rating to the new Naftogaz Eurobonds, which were issued in the volume of USD 1.6 bln.

The registrar of the securities company ‘Center-Registrar’ has transferred a 76% stake in the holding company Luhanskteplovoz [LTPL UZ] from the account of the ‘Bryansk Engineering Works’ Asset Management Company, which is part of the Transmashholding, to the account of the State Property Fund (SPF). Earlier, the Economic Court of the Luhansk Region had ordered ‘Center-Registrar’ to return the 76% stake in Luganskteplovoz to the State Property Fund.

The Ukrainian state monopoly Naftogaz has completed the comprehensive restructuring of its external debt by exchanging USD 500 mln in Eurobonds and other liabilities (UAH 1.1 bln) for a new Eurobonds issue. The new bonds have already been submitted to the clearing system and will soon appear in circulation in the Ukrainian Eurobond segment.

Both palm and soybean oil prices are demonstrating a tendency towards growth, according to the opinion ofOil World. Thus, world prices for palm oil should increase in December due to the reduction of stocks, and could rise to USD 80-150 per metric ton by March or April 2010. Nevertheless, according to the analysts from ‘Oil World’, sunflower seeds and sunflower oil have the greatest growth potential, which will soon rise. The main driver for this is the reduced size of harvests in major sunflower-producing countries. Prices for sunflower oil could increase to USD 120-150 per metric ton or higher in the next 3-8 months, up from the current level of 780 USD per metric ton.

In the current 2009/10 marketing year, Ukrainian grain exports have reached 9 mln metric tons, whereas the "penetration depth" of the market accounts for 50 countries of the world. The largest consumers include not only developing countries (i.e. Bangladesh, Egypt, Iran, Syria, Turkey, Kenya, Jordan, Tunisia, Morocco, Libya, Algeria), but also ‘B20’ participants, such as Saudi Arabia, South Korea, Spain, Japan, Israel, etc.

The UkrAutoprom association has reported on automobiles production for October, which amounted to 4869 cars, implying 30.8 MoM drop. The 10M09 production level, at 63519 units, is down 83.9% YoY. The production values for individual companies are as follows. ZAZ (the UkrAvto holding) produced 3165 units, which is -33% MoM. Its 10M09 output is 44209 units or -82% YoY.