MSCI Barra Includes Eight Ukrainian Companies in its Index

MSCI Barra announced it included eight Ukrainian companies in its Frontier Markets Index for Ukraine which is calculated since November 30, 2007. The stocks added include: three generating companies Centrenergo (CEEN: HOLD), Dniproenergo (DNEN: HOLD), Zakhidenergo (ZAEN: HOLD), Chervonoarmiyska Zakhidna coal mine (SHCHZ: BUY), steel smelter MMK Illicha Steel (MMKI: BUY), Raiffeisen Bank Aval (BAVL: HOLD), state-owned oil company Ukrnafta (UNAF: U/R), and Ukrtelecom (UTEL: HOLD). Oleksandr Klymchuk: The Market Capitalization of the Index basket is USD 24 bln which covers 19% of Ukrainian Equity Universe. In our discussion with MSCI-Barra they mentioned that short-list of 17 Ukrainian stocks was considered for the Index. Most of Concorde’s definition of blue chips (Premiere League) is in the final selection: 7 out of 8 stocks (see our Liquidity Monitor report of Nov. 27). The inclusion of Chervonoarmiyska Zakhidna (SHCHZ: BUY) is a bit surprising as, unlike Premiere League stocks, it didn’t have established history, being actively traded only for the last 6-9 months. However, looking forward we expect further improvement in liquidity of Chervonoarmiyska Zakhidna as the inclusion must generate additional demand for all the stocks in the MSCI index basket. Apart from individual country index, these eight Ukrainian stocks will be represented in 13 Composite Indices:

MSCI Frontier Markets (FM) Index

MSCI Frontier Markets (FM)ex GCC Countries Index

MSCI FM Central and Eastern Europe &CIS (CEEC) Index

MSCI FM Europe, Middle East & Africa (EMEA) Index

MSCI EFM Index

MSCI EFM Central and Eastern Europe & CIS (CEEC) Index

MSCI EFM Central and Eastern Europe & CIS (CEEC) ex Russia Index

MSCI EFM  Europe & CIS (E&C) Index

MSCI EFM Europe & CIS (E&C) ex Russia Index

MSCI EFM EMEA Index

MSCI ACWI and Frontier Markets (ACWI FM) Index

MSCI ACWI FM ex USA Index

MSCI ACWI FM ex Japan Index

MSCI ACFM Europe and CIS (E&C) Index