Yesterday, the PFTS Index recorded its third worst trading day in the last 18 months, dropping 4.6%. The large decline was mainly caused by the continued appreciation of oil prices and speculation about higher natural gas prices for Ukraine from 2009. Fortunately, favorable US manufacturing data and macroeconomic statistics from the State Statistics Committee of Ukraine to be published this week will likely reverse the decline temporarily as natural gas speculations will be overshadowed by real, strong fundamentals.
The stocks that have frequently been hit the hardest during the latest market correction once again showed the largest declines. Bank Aval (-9.9%), Ukrsotsbank (-6.1%) and the rest of the banking sector were hit the hardest regardless of expected strong 1H08 financials. Yet again, Motor Sich (-6.4%) beat the engineering sector sell-off for liquidity reasons, while UkrAVTO (-10.2%) and Kryukiv Railcar Plant (-17.2%) dropped significant values despite increased production levels and revenue growth, especially Kryukiv. In the electricity sector, a lack of industry reforms caused Centrenergo (-13.7%) and Zakhidenergo (-5.9%) to decline. Finally, the standard steel sector names, Enakievo Steel (-6.1%) and Alchevsk Steel (-7.2%), joined the market, depreciating significantly.

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