Stocks extend gains in line with European markets on strong commodity prices

The Ukrainian stock market on Wednesday traded in line with its European counterparts which extended their gains for the fourth consecutive trading session, says report by Astrum investment management company.

European and American markets were higher on Wednesday due to the better than expected data on retail sales and PMI Services in Germany, as well as ISM Services index in the US. As a result the DAX index rose more that 0.8% to as high as 5,830 points and the oil price advanced to above USD 80 per barrel once again.

The UX index added 1.1% to close at 1833 points, with the gains pretty much across the board. The PFTS index gained 0.7% to 718 points. Trading activity was well above average, equity volume on the UX totaled UAH 47m. Bank Forum was the leading and most actively traded issue, shooting up 7% on UAH 6m trading volume.

The stock was up on the rumours of the sale of the minority interest by Leonid Yurushev to Commerzbank which should open the way for the Bank's recapitalization.

JKX (JKX LN) to raise 37.8 mln pounds to fund development

Reuters reports that Russia and Ukraine-focused oil producer JKX Oil & Gas (JKX.L) plans to raise 37.8 million pounds ($61 million) through a placing of new shares to fund the development of reserves to boost production.

The FTSE 250 company said the proceeds of the placing would finance the building of a second rig at its Rudenkovskoye field and a liquefied petroleum gas (LPG) facility, both in Ukraine, and help it continue its well workover programme in Russia.

It added that the additional cash would also enable it to maintain the ability to make selective acquisitions.

JKX is targeting production of 20,000 barrels of oil equivalent per day in 2011 up from 13,657 bpd in the three months to the end of September 2009.

It said the $11 million LPG facility would enable it to extract increased value from its Ukrainian gas production. To date, the Russian workover programme was "encouraging" with the first sales of gas expected by the end of this year, it added.

The placing, being conducted through an accelerated bookbuilding by Oriel Securities and Brewin Dolphin was priced at 265 pence per share, a discount of 4.7 percent to the closing price on Jan. 25.

The placing shares will represent about 9.1 percent of the existing ordinary shares or 8.3 percent of the enlarged share capital.

Shares in JKX were down 3.3 percent to 269 pence by 0846 GMT, having doubled in value over the last twelve months.

Ukraine's stocks: what to wait for after presidential elections

Here are some quotes from Market Watch article on possible impact of elections on Ukraine's stocksi. The main idea of the article is that elections will bring political stability and that Tymoshenko's win will bring such a stability faster for she has to spend less time to consolidate power than Yanukovich, who'd have to fill the whole power structure of Ukraine with new personnel.

"We expect a difficult political battle during and after the election to trigger a new round of negative news flow," said Anastasia Golovach of Renaissance Capital in Kiev. "Investors could decide to sell some instruments [stocks and bonds] because the stabilization of the political situation in unlikely in the short term," she said.

Ukraine's benchmark PFTS stock index rose 90% in hryvna terms last year after tumbling 74% in 2008. In dollar terms, the index rallied 83% in 2009, just as much as it dropped the previous year. Still, over the last decade, the index has surged 858% in dollar terms and 1,366% in hryvna terms, according to data from the PFTS Stock Exchange.

"Liquidity is very poor here, but if we have a stable political situation and a stable exchange rate for a few months, investors will start looking at this country," Abromavicius said.

The market capitalization of the PFTS, which consists of 20 companies, was $10.1 billion last year. The sectors that stand out are steel and iron ore, utilities and banks.

Ukraine's stocks pay off 900% over a decade

Ukraine -- in spite of the fractiousness of its political elite in recent years -- that offered an unbeatable return of nearly 900 percent over the decade, data compiled by Reuters show.

Along with Peru and Sri Lanka, Ukraine was also among the top 10 performing stock markets in 2009, a year that saw emerging equities. Ukraine's PFTS Index .PFTSI managed to double in dollar value in 2009 despite the economy's dependence on a $16.4 billion bailout programme from the International Monetary Fund.

Over the decade, the market capitalisation of the Ukrainian bourse has increased tenfold to $26 billion, fuelled by large-scale privatisation of state assets and the explosion of new securities sales. Source.