The demand for Ukrainian securities on the Warsaw Stock Exchange (WSE) will rise in mid-October – November of 2011. This opinion was expressed by the Head of Investment Banking Services Department ofAstrum Investment Management Elena Malitskaya.

The beginning of 2011 is considered to be one of the most successful periods for Ukrainian companies. IMC, KSG Agro, Westa ISIC and Ovostar Union successfully held their IPOs during this period.

Nevertheless, recently due to several issues within global business community it became clear that the demand for investment opportunities has slightly declined. For one, Valinor Public Ltd. as well as ViOil, two major players within the agricultural market of Ukraine were forced to delay their IPOs due to unfavorable market conditions.

Nevertheless, such situation is seen by the experts as a common occurrence since summer time is usually the least favorable period for IPOs. The situation was only worsened by uncertainty in macroeconomic expectations in Europe, as well as the most recent possibility of U.S. technical default. Majority of the investors are willing to purchase safer financial assets such as treasury notes.

Another local factor that may be traced as the reason for lower demand for the shares of Ukrainian companies is contributed to IPO of a large Polish facility - coal mine JSW (Jastrz?bskaSpó?kaW?glowa). This placement was the fourth-IPO capital raised in the history of WSE and the second largest IPO in Europe in the first half of 2011, which attracted 5.37Bn PLN (1.9Bn USD) and sixth largest IPO on the number of signed applications 170 thousand subscribers.

Obviously, after such a large investment, there is a certain period when demand falls, and such period is occurring at the moment. Another large Polish PKO Bank Polski is planning its IPO for the fall. It is expected to be on the top six offerings for WSE. Thus it is possible that the demand will fall once again, yet it is expected to increase by the end of October.

UkrAgroConsult