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Presented by: VTB Bank, Custody

July 9, 2020 Issue No. 2020/26

Market News

Central bank says prolongs some measures imposed due to pandemic On June 26, 2020 it was announced that the Russian central bank prolonged easing of several regulatory measures introduced due to the pandemic from July 1. The Central Bank of Russia said that the temporary regulative easing introduced by the regulator in conditions of spread of the coronavirus infection have limited the negative consequences for the people, financial market participants and the economy. The measures announced earlier are to stop being valid on July 1, 2020. In this context, the Central Bank of Russia has considered viability of prolongation of the easing introduced earlier. The authority prolonged the permit for banks and non-credit financial organizations to provide services until September 30 to the people with expired passports. Banks are also permitted until September 30 to open client accounts without personal attendance of an individual if such accounts are opened for socially important payments and also open a bank account to an individual entrepreneur or a legal entity without the personal attendance of a person opening a bank account if such account is needed to a person classified as a small or medium-sized enterprise to obtain a loan for urgent needs in order to support and maintain employment. A number of measures relate to exemptions in terms of violation of the deadlines for the submission of certain information to the foreign exchange control authorities by authorized banks, for fulfilling certain obligations by legal entities and many others. The recommendation for acceptance of expired pay cards was not prolonged. The detailed information of all the measures can be found at the regulator’s web-site via link: https://cbr.ru/eng/press/pr/?file=30062020_120730ENG2020-06-30T12_06_50.htm

Central bank sells RUB 10.3 bln of foreign currency on market on July 8, 2020 On July 9, 2020 it was stated that Russia’s central bank sold RUB 10.3 bln of foreign currency on the domestic market with settlements on July 8. On March 9, the regulator decided to suspend purchases of foreign currency under the budget rule for 30 days in order to raise predictability of activities of monetary authorities and to reduce the volatility of financial markets in the conditions of significant global oil price changes. On March 10, the authority decided to start preemptive sales of foreign currency in order to support the financial stability, as the Finance Ministry would be able to start selling foreign currency from the National Wealth Fund only in April. The central bank started selling additional currency from the National Wealth Fund to close the Sberbank sale deal on March 19.

Company News

RusHydro to buy 7.68% in Sakhalin Energy Company from On July 3, 2020 the board of directors of Russian hydropower giant RusHydro approved the purchase of 7.68% in power infrastructure construction company Sakhalinskaya Energeticheskaya Kompaniya (Sakhalin Energy Company) from oil major Rosneft for RUB 1 bln. After the deal, RusHydro’s stake in the company will rise to 34.62%. The hydropower giant will transfer the stake into capital of subsidiary RAO Energy Systems (ES) of the East for further consolidation of a controlling stake in Sakhalin Energy Company on the books of Sakhalinenergo. RusHydro will contribute the stake as payment to RAO ES of the East for additional shares. The deal is a part of a 2017 agreement between RusHydro, RAO ES of the East, and the government of the Sakhalin Region on consolidation of the region’s power assets within Sakhalinenergo.

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Globaltrans announces launch of buyback program On July 3, 2020 it was reported that Russian rail cargo operator Globaltrans launched a buyback program. The program is intended for the company’s Global Depositary Receipts (GDRs) trading mainly on the London Stock Exchange, and will be active during a year from the date of an extraordinary general meeting of shareholders, which approved the decision on May 12.

Deputy PM Chernyshenko, VTB CEO Kostin may join board On July 6, 2020 the board of directors of Russian state-controlled telecom operator Rostelecom approved a list of candidates on a new board to be elected at an annual general meeting of shareholders. Deputy Prime Minister Dmitry Chernyshenko and VTB Bank head Andrei Kostin have been nominated for the first time. The board approved 11 candidates for 11 seats.

Rosneft buys back 763,611 securities for USD 3.9 mln on June 29–July 3, 2020 On July 6, 2020 it was reported that Russian oil major Rosneft bought back 763,611 shares and global depositary receipts (GDRs) for USD 3.9 mln on June 29–July 3. The company bought 20,000 common shares and 743,611 GDRs. The weighted average price stood at USD 5.11 apiece. Since the launch of the USD 2 bln buyback program on March 23, the company bought back 38.81 mln securities for USD 163.2 mln.

Mostotrest shareholders submit 3% shares under buyout On July 8, 2020 shareholders of Russian construction company Mostotrest submitted 3% of the company, or 7.82 mln shares worth RUB 1.72 bln, under a buyout linked to the spin-off of a new firm. The buyout price was set at RUB 220.44 apiece.

Dividends/coupons UTair owners approve paying no dividends for 2019 On July 2, 2020 shareholders of Russian airline UTair approved paying no dividends for 2019 due to RUB 5.9 bln net loss calculated under International Financial Reporting Standards (IFRS). UTair did not pay dividends for 2018 as well.

Kamaz owners approve paying no dividends for 2019 On July 2, 2020 shareholders of Russian truck maker Kamaz approved paying no dividends for 2019 due to the lack of a net profit. Kamaz did not pay dividends for 2018 as well. State-run industrial corporation Rostec holds 47.1% in Kamaz, Daimler AG has 15%.

Mostotrest holders approve paying no dividends for 2019 On July 2, 2020 shareholders of Russian construction company Mostotrest approved paying no dividends for 2019 and leaving a net profit of RUB 1.732 bln undistributed. The company did not pay dividends for 2018.

Otkritie FC Bank owners approve paying no dividends for 2019 On July 2, 2020 shareholders of Russia’s Otkritie Financial Corporation (FC) Bank approved paying no dividends for 2019. The bank paid RUB 2 bln in dividends for 2018. The central bank owns 99.99% in Otkritie FC Bank.

Slavneft says owners decide against paying dividends for 2019 On July 3, 2020 shareholders of Russian oil company Slavneft, a joint venture of Rosneft and Neft, approved paying no dividends for 2019. The company will spend last years’ net profit to redeem loans and deposits. The net profit of the company grew by 27% on the year to RUB 4.722 bln in 2019, as calculated under Russian Accounting Standards (RAS).

SPIMEX to pay RUB 53.33 per share in dividends for 2019 On July 3, 2020 shareholders of Russia’s St. Petersburg International Mercantile Exchange (SPIMEX) approved payment of RUB 53.33 per ordinary share, or a total of RUB 399.975 mln, in dividends for 2019. The remaining part of the net profit was left undisbursed. The bourse’s net profit grew by 12% on the year to RUB 1.413 bln in 2018. The core shareholders of the bourse are oil companies Rosneft, Gazprom Neft, Zarubezhneft, , and , oil pipeline monopoly , and oil product pipeline operator Transnefteproduct.

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Aeroflot says board recommends paying no 2019 dividends On July 3, 2020 the board of directors of Russian airline recommended paying no dividends for 2019 because of a negative influence of the pandemic on its activities. The shareholders will consider the issue at an annual general meeting on July 27. The company’s net profit for 2019 calculated under the new International Financial Reporting Standards (IFRS) amounted to RUB 13.5 bln. Under its dividend policy, it should pay 25% of the net profit in dividends. But for 2018, the company paid RUB 2.6877 per share, or a total of RUB 2.857 bln in dividends, which accounted for 50% of the net profit, and it also paid 50% of the profit in dividends for 2017 and for 2016. The government holds 51.2% in Aeroflot, state industrial corporation Rostec has 3.5%, institutional investors hold 35.7%, individuals own 5.1%, 4.3% is a quasi- treasury stake, and the management of Aeroflot has a 0.1% stake in the company. Aeroflot's shares decreased by 1.05% to RUB 80.72 as of 10:50 a.m., time.

Mechel to pay RUB 3.48 per preferred share in dividends for 2019 On July 3, 2020 shareholders of Russian metals and mining group approved paying no dividends on ordinary shares and RUB 3.48 per preferred share, or a total of RUB 482.87 mln, in final dividends for 2019. For 2018, Mechel paid RUB 18.21 per preferred share, or a total of RUB 2.527 bln, and zero dividends on ordinary shares as well. The core owner of the company is Chairman of the Board of Directors Igor Zyuzin with 50.54% of the company’s ordinary shares. Free-float accounts for about 60% of the preferred shares, while the company controls another 40%.

Bank Trust owners approve paying no dividends for 2019 On July 3, 2020 shareholders of Russia’s Bank Trust approved paying no dividends for 2019 and spending RUB 77.84 bln net profit to cover losses of previous years. The bank did not pay dividends for 2018 due to a net loss.

TGC-2 holders approve paying no dividends for 2019 On July 6, 2020 shareholders of Russian power producer Territorial Generating Company-2 (TGC-2) approved paying no dividends for 2019. TGC-2 has not paid dividends since 2008.

Federal Passenger Company says to pay no 2019 dividends On July 6, 2020 shareholders of Russian Railways' affiliate Federal Passenger Company approved paying no dividends for 2019, when it received a net profit of RUB 6.629 bln. Federal Passenger Company paid no dividends for 2018.

Samolet Group shareholders decide against dividends for 2019 On July 8, 2020 shareholders of developer Samolet Group decided to pay no dividends for 2019. The company said earlier that it could start to pay dividends from 2020, two times per year. Mikhail Kenin and his family own 37.5% in Samolet Group, Pavel Golubkov 46.5%, Igor Yevtushevsky 10%, Anton Yelistratov 6%.

Please be advised that the information presented in this newsletter is based on the following sources: National Settlement Depository (NSD); Clearstream Banking; Euroclear Bank; PRIME-TASS information agency; “Kommersant”, "Rossiyskaya Gazeta”, “Izvestiya, "Vedomosti”, “The Moscow Times“ newspapers, and others.

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