KP-Dragon Index Breaks Through 1,000 Level

03.02.2004
The KP-Dragon Index closed at 1,001 on February 2, rallying past the psychologically important 1,000 level and demonstrating foreign investors’ strengthening confidence in the country’s capital markets.

Kyiv, February 3, 2004 – The KP-Dragon index, the leading tool for tracking the performance of Ukraine’s stock market, closed at 1,001 on February 2, rallying past the psychologically important 1,000 level and demonstrating foreign investors’ strengthening confidence in the country’s capital markets.

KP-Dragon’s 3.6% gain yesterday, from Friday’s close of 966, continued the Ukrainian equity market’s impressive month-long surge which saw KP-Dragon add nearly 24% from the start of the year and reach its highest level since June 5, 1998, as of yesterday. 

The market’s inspiring progress, following its 47% rise in 2003, is seen as the result of a beneficial combination of strong economic growth in Ukraine for the fifth year running and rising valuations in Russia, which persuaded investors to start paying closer attention to Ukraine’s undervalued markets. 

“Year-to-date, we have seen a sharp increase in interest towards the Ukrainian stock market among European and U.S. investors,” said Tomas Fiala, Dragon’s Managing Director. “Old accounts that had been inactive since August 1998 woke up, and many new investors came in over the last few months.” Dragon Capital launched the KP-Dragon index in cooperation with the Kyiv Post, Ukraine’s leading English-language publication, in August 2000. The index was recalculated back to track the full history of the Ukrainian equity market and its first value was set at 1,000 on May 5, 1997. 

The main considerations in setting up the index were selection of a proper base and the use of true market prices, which, given the Ukrainian equity market’s immaturity, often differ from those reported by the stock exchange. KP-Dragon comprises the market’s ten most liquid large-capitalization companies, whose liquidity is judged not just by turnover, but also by bid/offer spreads and frequency of trading. 

As measured by KP-Dragon, the best performing Ukrainian stocks so far this year were Ukrnafta (up 59% year-to-date), Nyzhnyodniprovsky Pipe (34%), Ukrtelecom (22%) and Stirol (20%). Despite its robust growth since 2002, the index is currently at only 24% of its peak in September 1997, but up 479% from its all-time low in March 1999. As of February 2, the index’s total market capitalization was USD 2.5 bil. 

Established in 2000, Dragon Capital is one of the leading investment banks in the Ukrainian securities markets, providing a full range of brokerage and corporate finance services to foreign and domestic institutional and strategic investors. 

In 2003, Dragon Capital became the top stock broker by the volume of trades conducted on the PFTS, Ukraine’s principal stock exchange. This accomplishment followed the recognition of Dragon Capital by international financial magazine Euromoney as the best equities house in Ukraine in 2002. The KP-Dragon index also won Euromoney’s credit as “the first reliable index in the Ukrainian market”.

 

About Dragon Capital

For more information please contact us at [email protected].