Spring wake-up on Ukrainian stock market will grow into a sweeping share growth this fall

A slight rise of Ukrainian stock market that began to be seen in April turned into a steady tendency in May. The inflow of investments secured a bigger number of tenders, and liquidity rise accounted for  profitability growth of unit investment trusts that registered profitable activity during the last half a year for the first time. Although financial analysts started mentioning about profit growth of Unit Investment Trusts, they are not anticipating a considerable inflow of private investments into trusts. According to their estimations, it can be counted on only after two or three months of a steady market growth.

May revival

When Ukrainian stock market started to show signs of life in April, the majority of analysts were sceptical about this. Even though PFTS index increased at first at  2,5-3%, after several leaps down it improved only  up to  1,84% (reached point 333,85). Regular increase on stock market happened only in May, when PFTS index rose up to 7% overnight. Banks, metallurgy plants and engineering companies were among the leaders. The shares of Raiffeisen Bank Aval and Ukrsotsbank became 32,65% and 25,24%  more expensive respectively. The shares of Mariupol Heavy Machinery plant increased up to  21,26%, the shares of Kryukov Carriage Works rose up to 18,52%, Alchevsk metallurgy enterprise shares reached 17,46% and Azovstal shares became 11,15% more expensive. Consequently, PFTS index increased up to 26,47% (reached point 422,22) during the period of May 1-27.

Most experts don't have any shadow of a doubt that May growth of rates is a speculation and suggest several reasons for  that. One of the main ones is market recovery in Europe and the USA. "We were following the global trend and going up together with Western tenders", -  Aleksey Dudarenko, Assets Manager from Parex Asset Management Ukraine said. "Almost every single world platform demonstrated confident growth. Investors felt taste to risk again, and afterwards markets of developing countries such as Russia, India and China began to grow actively. Ours is not an exception either", Vladimir Hryshchenko,  Head of department on securities trade from Troika Dialogue Ukraine investment company added.

Positive economic news played quite a determining role in stock market growth as it helped us regain the favor of foreign investors. “While waiting for stabilization the investments were frozen, thus a lot of free capital was accumulated. As affected by the latest news investors started coming back to the Ukrainian market. They expect that credit resumption of international finance organizations (after crediting in IMF) and recapitalization of Ukrainian banks eases the fall of Ukrainian economy”, Dmitriy Tarabakin, Head of Dragon Capital, remarked. "Not the least of the factors was grivna consolidation: many investors transferred their capital from foreign currency into it and began to invest into Ukrainian securities", Andrey Nesteruk, an analyst from Phoenix Capital investment company, added. According to  experts' evidence, stock market liquidity increased twice as much over the last two months. "If an average daily tender volume at PFTS was UAH 2-3 billion, in April and May it accounted for UAH 4-6 billion", Anastasiya Nazarenko, broker from Concorde Capital investment company, mentioned.