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ONIC Weekly Report July 1 2019

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Office of the National Investment Council of Ukraine presents weekly reports as handy tools to keep track of the key news in business and investment climate in Ukraine and the world. The following report covers events dated June 24-June 30, 2019

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ONIC Weekly Report July 1 2019

  1. 1. WEEKLY REPORT June 24th → June 30th, 2019
  2. 2. National energy company Ukrenergo will continuously submit and update the data in the ENTSO-E platform on the power system's load, capacity and balancing. The respective agreement was signed by Ukrenergo and Secretary-General of European Network of Transmission System Operators for Electricity (ENTSO-E) WEEKLY REPORT June 24th → June 30th, 2019 Business climate in Ukraine GDP growth +3.3% Export $14,905 Import $16,918 Industrial output -0.9% CPI 8.9% Oil Coal Natural Gas Iron Ore Copper Corn Wheat USD/bbl USD/ton USD/MWh USD/ton USD/bushel 2018, y-o-y Jan - Jan 2019 Jan-Jan 2019 y-o-y Jan – Jan 2019 Jan-Jan 2019 y-o-y Jan - Feb 2019, y-o-y Feb 2019 Macroeconomic indicators Jan - Mar 2019, y-o-y Mar 2019 UAH/USD (NBU, average) 26.17 Source: Ukrstat, NBU 66.55 54.30 11.10 109.18 USD/ton USD/bushel 5982.00 4.32 5.27 million +7,8% +7,3% +2,1% 8,8% million Ukrainian President Volodymyr Zelensky has changed composition of the National Investment Council, appointing himself head of the council. The Council was established to set a public-private dialog with key business leaders on investment promotion, boosting FDI and tackling key obstacles of Ukrainian regulatory environment The European Bank for Reconstruction and Development (EBRD) may lend EUR 60 million to NJSC Naftogaz of Ukraine to finance the purchase of natural gas for imports. The EBRD’s support in the form of a letter of credit will cover up to 20-30% of the payment risk of Naftogaz associated with financing the purchase of gas from reputable international traders, without resorting to sovereign guarantees The Guaranteed Buyer state enterprise has launched the procedure of concluding agreements with power producers on a new feed-in tariff. Guaranteed Buyer will sign supplemental agreements with producers which earlier concluded electricity sale and purchase agreements on feed-in tariff with the Energomarket state enterprise in order to change the party in the agreement, and new contracts will be signed with other producers Head of State Agency for Energy Efficiency and Energy Saving (SAEE) Serhii Savchuk as a member of the Ukrainian official delegation to Swtizerland took part in the discussion of new economic opportunities of the two countries' partnerships, including energy efficiency, green energy and energy utilization of garbage Ministery of Economic Development and Trade of Ukraine (MEDT) signed a Memorandum of Cooperation with International Finance Corporation (IFC, a member of the World Bank Group). This will enable MEDT to receive expert support from the IFC concerning the start of the work of the Public-Private Partnership (PPP) Support Agency. The launch of the Agency will allow to implement qualitatively new projects, primarily in infrastructure sector
  3. 3. Ukrainian Monobank got approval by Financial Conduct Authority (FCA) for their UK project Koto. Monobank is the first virtual bank in Ukraine, allowing customers to conduct transactions from their smartphone. Koto project is self-funded and Monobank plans to raise round A investments in the middle of the year WEEKLY REPORT June 24th → June 30th, 2019 Ukrainian Business News World Business News Geely Holding intends to remain a long-term investor in Swedish truckmaker Volvo AB. Geely became Volvo’s second largest owner by voting rights last June after assuming an 8.2% stake in the company that came with 14.9% voting rights. The move followed Geely’s purchase of a 10% stake in Volvo’s main rival Daimler The Kyivstar mobile communications operator plans to expand the 4G (LTE) mobile communication network in 2019, covering the territory of Ukraine where 75% of population concentrated. In 2018 Kyivstar has invested UAH 8.3 billion in the purchase of new frequencies and the construction of a network ABH Ukraine, the majority stakeholder of ALFA-BANK Ukraine, issued 2 year Eurobonds for a total amount of EUR 50 million. Coupon rate for the issue is 6.75% per annum paid quarterly. This is the sixteenth Eurobond issue completed by ABH Ukraine since the beginning of 2015 Metinvest Holding, the largest Ukrainian steelmaker, plans to invest USD 100 million in Pokrovske Coal assets. Concorde Capital estimates that this amount of CapEx will be a 50% increase from the 2018 investments (USD 67 million, of which Donetsksteel invested USD 1 million and Pokrovske Coal – USD 66 million) Privatbank made a second payment to budget in amount of UAH 7 billion, completing the payment of dividends for 2018, amounting UAH 11.5 billion. As reported, according to the financial statements for 2018 approved by the supervisory board and the shareholder of the bank, PrivatBank spent 90% of its net profit on dividends Lego’s founding family and private equity firm Blackstone are taking Britain’s Merlin private again in an agreed deal valuing the Madame Tussauds and Legoland owner at USD 7.5 billion. The world’s second-largest operator of visitor attractions after Disney said the deal would give it greater scope for significant, long-term investment Volkswagen is expected to reap EUR 1.55 billion from an initial public offering of its truck unit Traton. The final price guidance given to investors was for 27 euros a share, what would give Traton an initial market capitalization of 13.5 billion euros. Volkswagen plans to invest the proceeds in transforming its auto production as it readies the launch of dozens of electric vehicles over the coming years and deepens an alliance with Ford Motor Abu Dhabi National Oil Company had completed a deal for BlackRock and KKR to buy a 40% stake in ADNOC Oil Pipelines for USD 4 billion. Under the deal, the pipeline company will lease ADNOC’s interest in 18 pipelines transporting crude oil and condensates across ADNOC’s upstream concessions for 23 years. KKR and BlackRock’s investment was funded through their infrastructure funds and financed by a syndicate of banks Qatar Petroleum has signed an agreement with Chevron Phillips Chemical to build a new petrochemicals complex, part of plans by the world’s top liquefied natural gas (LNG) exporter to broaden its energy interests. Qatar is one of the most influential players in the LNG market due to its annual production of about 77 million tonnes, which is expected to grow about 43 % by 2024 from a major expansion to the country’s North Field, the world’s largest natural gas field, which it shares with Iran UK life assurance business ReAssure will be valued at up to 3.3 billion pounds when it floats on the London Stock Exchange. Swiss Re, the world’s second-largest reinsurance company, set a price range of 2.80 to 3.30 pounds for shares in the flotation, implying a market capitalization of 2.8 billion to 3.3 billion pounds when the float takes place next month Ukrainian Love&Live Fashion Group raised a USD 400,000 investment in a seed round from SMRK Venture Fund. Love&Live Fashion Group is a Ukrainian group of fashion brands with headquarters in Kyiv

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