Research

Last week, CDS quotes in Ukraine experienced a growth of 6.2 р.p – from 622.1 b.p. to 628.3 b.p. It seems that investors took a pause after a rally that lasted more than two months on the Ukrainian CDS market, which resulted in a reduction of CDS quotes from more than 900 b.p. to the current level of 628 b.p.

Last week, Ukrainian CDS quotations continued to decline, this week from 675.4 b.p. to 611.6 b.p. Thus, Ukrainian CDS quotations have been declining for the last four months – from 1500 b.p. at the end of November 2009 to the current 612 b.p. International rating agencies’ upgrades in the sovereign rating for Ukraine and ratings outlook continue to positively influence investors’ assessment of Ukrainian sovereign risks.

Last week, Ukrainian CDS quotations continued to decline from 812.8 b.p. to 730.7 b.p. Stabilization in the political arena of Ukraine continued to positively influence investors’ assessment of Ukrainian sovereign risks. The formation of the new Cabinet and sovereign rating upgrade by the S&P international ratings agency should drive a further reduction of Ukrainian CDS.

Last week, Ukrainian CDS quotations continued to decline, this time by 71.2 b.p., from 982.1 b.p. to 820.9 b.p. Stabilization in the political arena of Ukraine continue to positively influence investors’ assessment of Ukrainian sovereign risks. The spread between Ukrainian CDS and those of Argentina and Venezuela widened to 249.1 b.p. and 200.1 b.p. respectively.

Last week, Ukrainian CDS quotations declined by 51.8 b.p. from 980.2 b.p. to 928.4 b.p. The main influence on investors’ attitudes to Ukrainian risks was news from the political arena, including the new President’s inauguration (held February 25) and a decline in investors’ apprehension about further political destabilization in Ukraine.

Last week, Ukrainian CDS quotations declined by 1.7 b.p. from 980.8 b.p. to 979.1 b.p. Investors’ apprehension about further political destabilization in Ukraine after the second ballot of the presidential election has begun to decline. In our view, this should result in a lowering of Ukrainian CDS again next week.

Last week, Ukrainian CDS quotations took a 50.4 b.p. jump from 919.8 b.p. to 970.2 b.p. Such an increase occurred due to investor apprehension in relation to further political destabilization in Ukraine after the second ballot of the presidential election. Despite such a jump, Ukrainian CDS are still trading lower than Argentina’s and Venezuela’s CDS.

Last week, Ukrainian CDS quotations showed a decline of 37.3 b.p. from 956.7 b.p. to 919.4 b.p. Thus, Ukrainian CDS quotations moved to occupy the third place in the world, after Venezuela’s President reported about the nationalization of its retail network.

The Ukrainian electricity generating company Zakhidenergo [ZAEN UZ] won access to a 100 MW power export capacity for the year 2010 through the very first auction to be held for access to electricity exports from Ukraine. As a result, now the Company will be able to sell part of its power directly to foreign clients. The auction itself signifies the liberalization of Ukrainian electricity exports and constitutes a driver for the entire power generating sector.

Stakhaniv Railcar Works, a member of the AutoKrAZ holding and is controlled by the Finance & Credit Group, is the largest Ukrai nian producer of gondolas and hoppers, previously the railcars that were most ‘in demand’. Despite the fact that the Company has suffered a lot in the past year, recent news about the Company led us to review our models of and opinion about SVGZ`s valuation.