The Ukrainian equity market enjoyed an upswing in demand Feb. 2 largely thanks to sizable growth in second-tier stocks. The UX index added 1.13% and the PFTS index 1.65%. UNAF (-1.50%) continued to decline on low crude oil selling prices for the company, while FORM (+9.93%) was the stock of the day on rumours that parent Commerzbank may inject UAH 1.1 bln of fresh capital into its Ukrainian subsidiary in March. KVBZ (+5.89%) grew on news that the company plans to increase production by 82% y-o-y, though the increase is in line with analysts’ expectations. The stock still managed to make gains due to the weak efficiency of the market.



Blue chips gained the most among Ukrainian stocks on foreign exchanges yesterday. Ferrexpo (+7.0%) jumped after Citigroup announced its forecast of a 40% increase in iron ore prices for 2010. JKX (+6.4%) and Regal (+4.0%) climbed on rising crude oil prices.



The Ukrainian Eurobond market was very active on Tuesday. Buyers were aggressive, particularly for sovereign and quasi-sovereign issues. Ukraine 11 gained almost 2 points during the session, closing 200bps higher on the day. The entire yield curve decreased, however, flattening out on strong demand. Naftogaz and Eximuk issues also traded up, gaining around 1point, while the municipal CitKiev and Privat issues also enjoyed a positive day.



On the Russian Eurobond market activity was moderate, with sovereign issues closing generally flat. Among corporates Gazprom, Mobtel, Akbars and Tmenru were active without any significant price changes.

On Kazakhstan’s Eurobond market meanwhile, most papers traded flat, with minor interest in KKBB and Kmg.