The Ukrainian stock market has been on the rise for the third week in a row, with the PFTS index reaching its highest point this year. Traders are bullish about the market's future prospects and are hoping that it may match the robust growth seen in Russia.
'The majority of the market's players have positive expectations,' said Ihor Maslyuk, a trader at Wood & Company.
'I also think that the market will go up. Russia is showing a steady 2-8 percent growth every day,' he said. 'Why shouldn't Ukraine go the same way as well?'
The PFTS index rose 4.4 percent during the trading period from June 15 to 22, closing at 23.01. The trading volume for the period was Hr 6.7 million.
Interest in energy-company stocks has continued to grow, with shares of Kyivenergo, Donbasenergo and Dniproenergo being traded most actively. Shares of chemical company Stirol were also in demand.
Apart from shares, promissory notes were also in demand. After a long slow period, Ukrtelecom promissories regained their position as the most actively traded notes on the market.
Trading was also up on the Ukrainian Stock Exchange. A total of 31 deals were struck over the latest trading period, with almost all of the USE's regional branches recording deals. The most active trading was registered in Kyiv and Crimea. The USE's total trading volume for the week was Hr 827,771.
Bonds
Seven OVDP sales were struck on the Ukrainian Interbank Currency Exchange in the week from June 15 to 22. The total volume there amounted to slightly over Hr 1 million. On the PFTS, only one OVDP package was sold during the trading period, for Hr 329,375.
Experts say that OVDP market, after showing slight growth in May, has again slumped into a period of stagnation, with high risk and low yields preventing further growth. And market operators remain pessimistic about radical changes in the short run.
'I don't think the Ministry of Finance is going to sell bonds cheap in the near future – it doesn't want to attract expensive money,' Maslyuk said.
Meanwhile, the Ministry of Finance sold Hr 50 million worth of OVDPs on June 18. The bonds mature in 439 days and yield 29.46 percent per annum. Three days later, the ministry sold another Hr 50 million worth of OVDPs. These bonds mature 450 days and yield 29.44 percent per annum. However, the ministry may soon lose a major customer.
The law on the National Bank of Ukraine, passed on May 20 by parliament and recently signed by President Leonid Kuchma, permits the NBU to buy securities only on the secondary market. That means the purchase of OVDPs directly from the Ministry of Finance, which the NBU has been doing since 1995, will no longer be allowed. The NBU bought most of the bonds sold by Ministry of Finance in 1998 and in the first five months of 1999.
But NBU officials said that the bank will not stop buying bonds on the primary market immediately. Natalia Hrebenyk, head of the NBU's Currency and Emission Department, said the NBU would gradually move into the secondary bond market, reducing its bond purchases from the Ministry of Finance by around 50 percent next year.
