Analytics

Last week, PFTS index showed a substantial rise – by 11.5%, up to 306.66 points, having passed the threshold of 300 points. Such market developments were prompted, on one hand, by external factors: the US FRS passed another decision to cut interest rates down to 0-0.25%, which greatly cheapened financial resources for the US economy, while leaving the US government without regulatory financial levers in the future. The US president elect Barack Obama opted for development of a new two-year plan of recovery of the US economy for a much greater sum than was previously quoted by Obama’s team - $600 billion. Positive dynamics at the end of the week were further boosted by the US government allocating funds to rescue car makers: General Motors Corp. and Chrysler LLC will get $13.4 billion worth of credits from the government under the Troubled Asset Relief Program; another $4 billion are to be provided in February. On the other hand, domestically, the market was kept afloat by the rapid devaluation of the hryvnia to the record-low rates against the US dollar and euro. This prompted market actors to reassess some issuers, first of all, enterprises exporting products for US dollars.

The beginning of the week was marked by a surge of optimism prompted by Barack Obama’s statements of large-scale public expenses planned in the USA and allocation of $14 billion worth of governmental assistance for the leading US car makers to cope with the crisis. However, by the weekend, optimism yielded to a sharp decline in spirits. The plan of assistance to the Detroit Troika was not backed by the Congress, which means that this year, those companies may hardly count on anything. This, in turn, puts their bankruptcy on the agenda. More distant forecasts look even grimmer – bankruptcy of the sector will prompt cuts of hundreds of thousands working places in the USA and further slowdown of the economy, involving reduction of demand for resources.

The whole of the last week, the PFTS index mainly stayed in the red, pressed by upsetting internal and external news, and fell by over 5% in course of five days.

In course of the week, the Ukrainian share market was developing in the wake of the trends of the world stock markets, while the volumes of trading remained low.

Last trading week, the PFTS index demonstrated varied trends, reversing from green to red and vice versa. After five trading sessions, the PFTS index lost 2.64%.

The week that so promisingly began with the rise of the main stock markets brought mixed results: developing markets continued their decline, while indexes of developed economies rose by 3-5%, despite a strong drop in the middle of the week. The growth of stock markets in the developed countries was prompted by joint efforts of governments fighting the financial crisis and announcement of concrete steps intended to help the economy. In particular, $250 billion out of $700 billion promised by the US Administration were allocated to purchase stocks of leading US banks. In Europe, the European Central Bank, the Bank of England and the Swiss Central Bank reported readiness to provide unlimited amounts of funds for the banking system.