Capitalization of Ukrainian Agrarian Companies takes a hit as tensions between Ukraine and Russia continue
2014-03-14 16:33:06
UkrAgroConsult Financial Analytics Department reports -16.37% capitalization decline, which is a new all-time low for Ukrainian Agrarian Index. UAIndex currently includes 15 public companies, involved in production of commodities with assets in Ukraine, whose shares are traded on foreign stock exchanges (currently including Warsaw, London, Frankfurt, Paris, Stockholm and Vienna exchanges). Capitalization decline resulted from direct confrontation from the Russian side, currently seizing military control of Crimea, most southern region of Ukraine. Average price per share drop is measured at -12.5% over the Monday trading session. Largest decline was indicated by Mriya (FSE: MAYA), losing 30% of its closing share price with fall from EUR 5.35 on Friday, February 28 to EUR 4.09 on Monday, March 3.
Financial analyst of UkrAgroConsult, Alex Morgun stated that currently is best time to purchase shares of these companies as they are expected to rebound back to their week-old price levels as soon as the tensions are over. At the moment, there is no direct threat to existing agrarian businesses and even currency risks posed earlier have died down with Ukrainian Hryvnya stabilizing at UAH/USD - 9.99/1. 2013 has been a difficult year for Ukrainian businesses in terms of their financial performance, and 2014 poses additional challenges as sales and production costs will increase due to national currency devaluation against U.S. dollar and Euro. However, Ukraine will be able to cooperate closer with EU, especially upon signing of association agreement and compliance with IMF requirements. Such development means better investment climate for foreign investors in Ukraine, thus potential influx of external funding towards the end of 2014.
UkrAgroConsult has completed review and recommendations study on investing in Ukrainian Agrarian Sector. You can follow this link to find out more about the study “How to profit from Ukraine’s agricultural sector?”. In case you are interested in state of agrarian sector within CIS region, please follow the link below to read UkrAgroConsult monthly report “Agrarian Business in CIS region” for January 2014 (featuring Ukraine). First issue is free of charge. You can subscribe to the report to receive it on a monthly basis.