Ukraine stock market shut down again in bid to halt freefall

Business Materials 24 October 2008 16:35 (UTC +04:00)

Ukraine's government on Friday shut down the country's largest stock market in another attempt to halt share-price freefall, reported dpa.

Managers of Ukraine's largest PFTS stock exchange froze all transactions less than two hours after opening.

Share values had fallen between 10 and 19 per cent over Friday morning in heavy trading.

Since the beginning of October, PFTS officials had repeatedly closed the exchange in the middle of a trading day, three times during last week alone.

Badly hit on Friday were many of the country's "blue chip" stocks, a bellwether group of companies operating in Ukraine's economically critical metals, chemical and agricultural sectors.

The world financial crisis has demolished the worth of many publicly traded Ukrainian companies as foreign and domestic investors alike have abandoned shares in businesses in the former Soviet republic.

Ukraine's economy is heavily dependent on strong sales of industrial and agricultural commodities, particularly steel, fertilizers and grain.

Ukraine's banking sector is also under siege, with the collapse of one major bank prevented earlier this month only by the intervention of the government and five other leading financial companies requesting state assistance.

Dropping world commodity demand combined with rising energy costs have pushed many leading Ukrainian firms into red ink for the first time since 2000.

Ukraine's economy had seen strong growth over the last eight years, routinely turning in 6 - 8 GDP expansion per annum.

The national stock exchange had long paralleled that expansion, but in recent months it has gone into a tailspin, losing 73 per cent of its value since the beginning of 2008, and 33 per cent of its value since the beginning of the month, the Interfax news agency reported.