Market overview

Ukrainian Stocks Were Mostly Lower Over the Week

Prices for Ukrainian equities listed on foreign exchanges finished the week mostly lower as the news flow around the country remained negative. Russia has warned the West against escalating the war in Ukraine, saying Moscow is prepared to use “all weapons” in its arsenal — including nuclear — if its Baltic exclave of Kaliningrad comes under attack. The warning follows recent military drills by NATO near Kaliningrad that the bloc has described as defensive exercises to strengthen deterrence. Those exercises have prompted strong concerns from Moscow.

Ukrainian iron ore producer Ferrexpo (FXPO) declined by 4.0% last week to GBp 31.2 per share and telecom giant Kyivstar (KYIV) fell 4.1% to USD 12.5. In agro related names, Industrial Milk Company (IMC) decreased by 5.6% to PLN 28.9 (MCap of USD 263mn) and MHP (MHPC) edged down by 0.7% to USD 6.97 (MCap of USD 746mn).

The moves across global markets point to a broader shift toward dollar-denominated assets. At the same time, rising Treasury yields are creating a growing risk that large institutional investors could reallocate capital from equities into US government bonds, traditionally viewed as a risk-free asset and now offering comparatively attractive returns.

The S&P 500 fell 0.3% last week but remains less than 1% below its record high reached in mid-August. The next major catalyst for US equities is likely to be third-quarter corporate earnings, which will provide a key test of whether elevated valuations can be supported by earnings growth. Among major equity indexes, Japan’s Nikkei 225 has posted the strongest performance this year, gaining 35% in the January-September period. At the other end of the spectrum, the Moscow Exchange Index has fallen almost 18%, despite elevated global oil prices. China’s Hang Seng Index has also lagged, declining 6.5% since the start of the year.