OREANDA-NEWS. The Ukrainian stock market appears to have regained its attractiveness among EM, as investors felt further pressure from rising commodities prices due in part to rising demand from Asian economies, a report published by Alfa-Bank Ukraine reads. The increasing likelihood of a further Fed rate cut in the next three months is unfreezing liquidity, which may bring about a possible shift away from US and European stocks to EM stocks, which are benefiting from the improving economic indicators of leading EM commodity providers.

According to analysts, the recent upward revision of a number of Ukrainian economic indicators on the back of new production orders for a number of PFTS-traded Ukrainian companies may lead to a new wave of interest in those stocks. Investor sentiment also appears to view Ukraine as a low political risk country, as the stock market is recovering on the eve of a major parliamentary election with a number of our picks approaching their target values at the fastest rate seen this year.

The PFTS Index rose on September 27 by another 2.7% to close at 1,035 points, securing its position above the 1,000-point benchmark. With trading volumes 3x higher than in the last two months, it was hard to find any stocks in the PFTS basket losing value during the trading session. Dniproenergo was the most actively traded stock, gaining 4.9% and accounting for about 15% of total trading volumes. Among the largest gainers on the market were also Luganskteplovoz (+9.06%), which gained on news that court hearings were put on hold for the time being. Kyivenergo (+9.2) and Stirol (+7.5%) also posted marked gains.

In other sectors, some significant news flow was generated by the opening of our Fourth Annual Ukrainian Investment Forum “Ukraine 2007: What Should Investors Expect?” hosted by Alfa Bank and Alfa Capital Ukraine. The forum began with a welcome speech by Head of Investment Banking in Alfa Bank Edward Kaufmann. The first session was devoted to politics with Anatoly Kinakh, Mykola Katerynchuk and Victor Pynzenyk speaking about the current political situation in Ukraine and its future prospects, after the elections. More specifically, Kinakh reiterated both the government’s official macroeconomic forecast for 2008 and also mentioned the expected funds to be raised from abroad for Euro-2012, which may pique investor interest in some steel and construction companies.

In the forum’s other two sessions, presentations were given by representatives from both large Ukrainian businesses, such as Interpipe, Development Construction Holding (DCH), and XXI Century, as well as new Ukrainian stories, such as Vinnifruit, Hekropet, and Ukrzernoprom Agro, which gave investors a full view of Ukraine’s future development prospects.