Despite the uncertainty over the future hryvna trading band and general gloom over the economy, Ukraine's stock markets surged into life for the first time in months in the five trading days leading up to Feb. 2.
The PFTS 14-share rode a huge gain on Jan. 29 – the last day of trading in the month – to close at 20.78 on Feb. 2, up 0.63 percent on the week.
All the same, trading volumes on the PFTS were marginally down, to Hr 3.512 million compared to Hr 3.69 million the previous week. Most trades were in energy-company shares, treasury bills and promissory notes. But no one, it seems, is banking on a recovery just yet.
'The rise in the market was solely due to the fact that some funds and companies bought securities to close their positions at the end of the month,' one dealer said.
He said the upsurge was artificial and 'won't boost the market in the long run.'
Other dealers predicted the market would fall back into a coma by mid-month, a victim of its continued low liquidity and wide spreads.
News from the Ukrainian Stock Exchange was mixed. The Kyiv branch of the USE celebrated its first trades of the year, with stock in three companies changing hands for a combined trading volume of Hr 310,189.
On the other hand, the regional branches of the USE, which have at least seen some trading so far this year, sank back into inactivity. The total USE trading volume over the week was Hr 349,438.
And some USE branches that have not registered trades this year are under the threat of closure, according to USE deputy head Oleksandr Odentsov.
'The USE is going to close some of its branches that have had little trading lately,' he said at a press conference on Jan. 29.
So some exchanges might not even get the chance to trade in a new financial instrument shortly to hit the Ukrainian market – National Bank of Ukraine Certificates of Deposit.
The central bank announced plans to auction CDs in a Jan. 26 resolution. Yields are to be determined by the market.
Market analysts are confident the central bank's CDs will be in demand, pointing to the market's disenchantment with treasury bills. That's good news for the NBU, which since the collapse of the T-bill market has been without a lever on the money markets.
