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Presented by: VTB Bank, Custody

May 27, 2021 Issue No. 2021/19

Market News

Moscow Exchange plans to launch morning stocks trade in October–December On May 20, 2021 it was reported that the Exchange plans to launch morning sessions starting at 7:00 a.m. on the stock market in October–December. Boris Blokhin, department director, told reporters that at the first stage, Russian stocks from the index and the most liquid foreign stocks will be admitted to trade. At the second stage scheduled for January, the Moscow Exchange will give admission to unit investment funds.

Legislation

Putin signs law to denounce double taxation deal with Netherlands On May 26, 2021 it was disclosed that President Vladimir Putin had signed a law on denunciation of an agreement on avoidance of double taxation with the Netherlands. The validity of the agreement will be terminated from January 1, 2022 if Russia notifies of its denunciation until June 30, 2021. In March 2020, Putin suggested imposing a 15% tax on dividend yields withdrawn to the accounts in foreign jurisdictions, which needs adjustments to the agreements on avoidance of double taxation with other countries. Russia will cancel such agreements unilaterally if consensus is not reached. The Finance Ministry sent notifications to Cyprus first, and then to Luxembourg, Malta, and the Netherlands. Accords with Cyprus, Luxembourg, and Malta have already been revised. Russia’s Finance Ministry had several rounds of negotiations with the Netherlands, but they broke down.

Company News

Safmar Financial Investments cuts stake in RussNeft to 1.5% On May 20, 2021 it was disclosed that Safmar Financial Investments, a unit of investment holding Safmar, had reduced its stake in Russian oil company RussNeft to 1.5% from 11.107% on May 18. The shares remained within the perimeter of Safmar, they were transferred to a subsidiary.

Inter RAO does not plan to revise dividend policy On May 21, 2021 a member of the board of directors of Russian power holding Inter RAO Yelena Sapozhnikova said that the company does not plan to revise its dividend policy encompassing payment of 25% of net profit calculated under International Financial Reporting Standards (IFRS). Sapozhnikova also said the company does not plan to pay interim dividends in the near future. Inter RAO will continue work on its option program in 2021–2022, but does not expect its introduction in 2022, she added.

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Promsvyazbank to offer RUB 10 bln exchange bonds on June 3 On May 24, 2021 it was stated that Russia's Promsvyazbank plans to collect investors' bids for 3-year exchange bonds worth at least RUB 10 bln on June 3. The yield guidance amounts to no more than 145 basis points to 3-year OFZ. Technical placement is preliminarily scheduled for June 11. The issue carries semiannual coupons. Gazprombank, Credit Bank of Moscow, Otkritie Financial Corporation (FC) Bank, brokerage company Region, Russian Agricultural Bank and Sovcombank were appointed as the placement organizers.

Former CEO of VSMPO-Avisma appointed to On May 25, 2021 it was stated that Sergei Stepanov, a former CEO of Russian titanium giant VSMPO- Avisma, had been appointed as a senior vice president and director for production of metals giant Norilsk Nickel. Stepanov will be in charge of coordination of the mining and metallurgical production and geological survey of the company and its subsidiaries.

Magnit sets coupon guide for RUB 10 bln bonds at 7.05% On May 26, 2021 it was reported that Russian retailer had set the final guidance for the first coupon’s rate of a RUB 10 bln 3-year exchange bond issue at 7.05% annually. The final guidance corresponds to an annual yield to maturity of 7.17%. The initial guidance was 7.25–7.35% annually, but it was reduced to 7.00– 7.10% during the bookbuilding. The issue carries semiannual coupons, and the technical placement was preliminary scheduled for June 2. VTB Capital, Gazprombank, Credit Bank of Moscow, Raiffeisenbank, brokerage company Region, and Sovcombank act as the organizers of the placement.

Shareholders pledges stakes in Arctic LNG 2 to Sberbank On May 26, 2021 it was reported that Russian independent gas producer and its foreign partners had pledged their stakes in liquefied natural gas (LNG) producer Arctic LNG 2 to Sberbank as collateral. Earlier in the day, Novatek said in a statement that it pledged its 60% stake in Arctic LNG 2 with a face value of RUB 9.6 bln as collateral. Data of the Unified State Register of Legal Entities showed that all foreign partners of Novatek also pledged their stakes to Sberbank as collateral. Novatek said earlier that it planned to pledge its stake in Arctic LNG 2 as collateral in order to raise USD 11 bln of financing for the project. The company raised the first, EUR 3.11 bln tranche from Sberbank, Gazprombank, Bank GPB International S.A., VEB.RF, and Otkritie Financial Corporation Bank late April. The Arctic LNG 2 plant is expected to produce 19.8 mln tonnes of LNG per year. Novatek owns 60% in the plant, while France’s Total has 10%, China’s CNOOC and CNPC have 10% each, and Japan Arctic LNG, a consortium of Japan’s Mitsui and JOGMEC, has 10%.

VTB management sees possible change in dividends on preferred shares On May 26, 2021 member of the management board of Russia’s second largest bank VTB Dmitry Pyanov told reporters that the bank does not rule out a possibility of changes to dividends on preferred shares and in the supervisory board. VTB Bank said in April that the annual general meeting of shareholders was scheduled for June 4. Pyanov pointed out that it was re-scheduled due to legal reasons as shareholders had to receive the detailed agenda 30 days ahead of the meeting. The supervisory board is to decide on what the final edition of the agenda would look like and what voting options would be there. Panov didn’t specify whether dividends on preferred shares would grow or shrink. He also stressed out that dividends on ordinary shares will likely remain the same.

Ozon fully acquires Oney Bank from Sovcombank for RUB 615 mln On May 27, 2021 it was stated that Russian marketplace Ozon had closed a deal on the acquisition of 100% of Oney Bank from Sovcombank for about RUB 615 mln. The marketplace said the strategic goal of the deal is Ozon’s access to a banking license to develop financial products in accordance with the retailer’s requirements. Ozon also said the deal will expand the number and improve the quality of the financial services the company offers buyers and sellers. Sovcombank bought 100% of Oney Bank in 2020 without disclosing the sum of the deal.

Dividends board recommends paying RUB 12.55 per share in 2020 dividends On May 20, 2021 it was reported that the board of directors of Russian gas giant Gazprom had recommended paying RUB 12.55 per share in dividends for 2020 using undistributed profit of previous years. Gazprom said earlier the dividend payment could amount to RUB 297.1 bln, or 50% of adjusted net profit calculated under International Financial Reporting Standards (IFRS). The shareholders will consider the board’s recommendation at an annual general meeting on June 25. For 2019, Gazprom paid RUB 15.24 per share, or a total of RUB 360.784 bln, or 30% of IFRS net profit, in dividends.

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Norilsk Nickel owners approve RUB 1,021 per share in 2020 dividends On May 20, 2021 it was stated that the shareholders of Russian metals giant Norilsk Nickel had approved paying RUB 1,021.22 per share, or a total of RUB 161.6 bln, in dividends for 2020. The record date is June 1. Interros of Vladimir Potanin holds 34.6% in Norilsk Nickel, while aluminum giant UC owns 27.82%.

Quadra board recommends paying no dividends for 2020 On May 20, 2021 it was stated that the board of directors of Russia’s Quadra Power Generation had recommended paying no dividends for 2020. The shareholders will consider the recommendation at an annual general meeting on June 25. Quadra has not paid dividends since 2012.

Safmar Financial Investments may pay zero dividends for 2020 On May 24, 2021 it was stated that the board of directors of Safmar Financial Investments, part of financial group Safmar of Russian tycoon Mikhail Gutseriyev, had recommended paying no dividends for 2020. The shareholders will consider the recommendation at an annual general meeting scheduled for June 23. Safmar Financial Investments paid no dividends for 2014–2016 and for 2019, and it paid RUB 30.25 per share or a total of RUB 3.38 bln for 2017 and RUB 14.5 per share or a total of RUB 1.6 bln for 2018.

TGC-1 board recommends paying RUB 0.001 per share in 2020 dividends On May 24, 2021 it was stated that the board of directors of Russian power producer Territorial Generating Company-1 (TGC-1) had recommended paying RUB 0.001 per share in dividends for 2020. The record date is July 5.

Transmashholding board recommends paying no dividends for 2020 On May 24, 2021 it was reported that the board of directors of Russian railway equipment producer Transmashholding had recommended paying no dividends for 2020 and leaving the net profit undistributed. In 2020, the company’s net profit fell 29.6% to RUB 3.9 bln under Russian Accounting Standards and decreased 4.5% to RUB 23.2 bln under International Financial Reporting Standards. Companies of Iskander Makhmudov, Andrei Bokaryov, Dmitry Komissarov, Kirill Lipa own about 80% in the company and France’s Alstom about 20%

Severstal holders approve dividends for October–December 2020 and January–March 2021 On May 24, 2021 it was stated that the shareholders of Russian steelmaker had approved paying RUB 36.27 per share, or a total of RUB 30.38 bln, in dividends for October–December 2020 and RUB 46.77 per share, or a total of RUB 39.18 bln, in dividends for January–March. The record date is June 1. Severstal paid RUB 27.35 per share in dividends for January–March 2020. It also paid RUB 15.44 per share, or a total of RUB 12.93 bln, for April–June 2020 and RUB 37.34 per share, or a total of RUB 31.28 bln for July– September 2020. The core owner of Severstal is tycoon Alexei Mordashov with a stake of 77.03%.

Sistema board recommends RUB 0.31 per share in final dividends for 2020 On May 24, 2021 it was stated that the board of directors of multi-industry holding had recommended paying RUB 0.31 per share, or RUB 6.2 per global depositary receipt (GDR), or a total of RUB 2.99 bln, in final dividends for 2020. The record date is recommended to be set at June 15. The decision is subject to approval by the company’s shareholders at an annual general meeting. Sistema’s board of directors also approved a new dividend policy for 2021–2023, envisaging basic dividends and possible extra payments of 10% of absolute growth of operating income before depreciation and amortization (OIBDA) in the previous year from 2022. The basic payments will amount to at least RUB 0.31 per common share in 2021, RUB 0.41 per common share in 2022, and RUB 0.52 per common share in 2023 .

Transneft board recommends paying RUB 66.9 bln in 2020 dividends The board of directors of Russian oil pipeline monopoly had recommended paying RUB 9,224.28 per share, or a total of RUB 66.87 bln, in dividends for 2020. Dividends on common shares will amount to RUB 52.527 bln and dividends on preferred shares to RUB 14.342 bln.

Russia’s Freight One to pay RUB 8 bln in dividends for 2020 On May 25, 2021 it was reported that Russian billionaire Vladimir Lisin’s Fletcher Group, the shareholder of railway cargo operator Freight One, had approved a decision for the operator to pay RUB 38.28 per share, or a total of RUB 7.99 bln, in dividends for 2020. In 2020, the company’s net profit rose almost 9% to RUB 21.077 bln, as calculated under Russian Accounting Standards (RAS).

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VSMPO-Avisma board recommends no dividends for 2020 On May 25, 2021 it was stated that the board of directors of Russian titanium giant VSMPO-Avisma had recommended paying no dividends for 2020. The recommendations are subject to consideration at an annual general meeting of shareholders on June 30. For January–June 2019, VSMPO-Avisma paid RUB 884.6 per common share in dividends but it paid no final dividends for 2019.

Mechel board recommends RUB 1.17 per preferred share in 2020 dividends On May 25, 2021 it was stated that the board of directors of Russian metals and mining company had recommended paying RUB 1.17 per preferred share in dividends for 2020. The record date is July 13. Igor Zyuzin, chairman of the board of directors, is the key owner of Mechel.

Gazprombank board recommends paying RUB 6 bln in 2020 dividends On May 25, 2021 it was stated that the board of directors of Russia’s Gazprombank had recommended paying RUB 9.65 per common share, or a total of RUB 6.012 bln, in dividends for 2020. The board had recommended paying no dividends on preferred shares.

Bashneft board recommends RUB 0.10 per preferred share in 2020 dividends On May 25, 2021 it was stated that the board of directors of Russian oil company Bashneft had recommended paying RUB 0.10 per class A preferred share in dividends for 2020 using undistributed profit of previous years, while paying no dividends on common shares. The shareholders will consider the recommendation at an annual general meeting on June 30. The record date for dividends was set at July 14.

Inter RAO owners approve paying RUB 0.18 per share in 2020 dividends On May 25, 2021 it was stated that the shareholders of Russian power holding Inter RAO had approved paying RUB 0.18 per share in dividends for 2020. The record date is June 7. The company’s dividend policy encompasses a payment of 25% of net profit calculated under International Financial Reporting Standards (IFRS) in dividends. In 2020, Inter RAO’s IFRS net profit stood at RUB 75.5 bln. State-owned holding Rosneftegaz holds 27.63% in Inter RAO, Federal Grid Company of Unified Energy System (FGC UES) has 8.57%, Inter RAO Capital owns 29.56%, and free float accounts for 34.24%.

Detsky Mir board offers to pay RUB 4.486 bln in 2020 dividends On May 26, 2021 it was stated that the board of directors of Russia’s largest children goods retailer had offered to pay RUB 6.07 per common share, or a total of RUB 4.486 bln, in dividends for 2020. The record date is July 11. The company’s free-float amounts to 100% excluding quasi-treasury shares and shares owned by the management and directors of the company.

Irkutskenergo board of directors recommends no dividends for 2020 On May 26, 2021 it was stated that the board of directors of Russian power utility Irkutskenergo, part of multi- industry holding En+ Group, had recommended paying no dividends for 2020. The shareholders will consider the recommendation at an annual general meeting (AGM) on June 30.

Rosseti Moscow Region to pay 4.93 kopecks per share in 2020 dividends On May 26, 2021 it was stated that the shareholders of power utility Rosseti Moscow Region, formerly known as Moscow United Electric Grid Company (MOESK), had approved a decision to pay 4.93 kopecks per share, or a total of RUB 2.401 bln, in final dividends for 2020. The record date for the dividends is June 1. Russian state power grid holding Rosseti owns 50.9% in Rosseti Moscow Region, while managing company Lider has 17.62%, Gazprombank owns 9.77%, managing company Agana has 6.19%, and OEK-Finance has 5.05%.

Mosenergo board recommends RUB 0.179 share in 2020 dividends On May 26, 2021 it was stated that the board of directors of Russian power utility Mosenergo had recommended paying RUB 0.179 per share in dividends for 2020.

Rostelecom board recommends 2020 dividends at RUB 5 per share On May 27, 2021 it was stated that the board of directors of Russian state-controlled telecom operator had recommended that shareholders approve dividends for 2020 at RUB 5 per share at an annual meeting on June 28 to be held in absentia. The dividends can total RUB 17.5 bln. The register for the meeting will close on June 7, and the register for the dividends will close on July 12. For 2019, Rostelecom also paid RUB 5 per share, or RUB 17.5 bln in total, accounting for 77% of the free cash flow for the year. In 2020, the company’s free cash flow decreased 25% to RUB 22.7 bln.

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TGC-14 holders approve paying no dividends for 2020 On May 26, 2021 it was stated that the shareholders of Russian power producer Territorial Generating Company-14 (TGC-14) had approved paying no dividends for 2020. The company did not pay dividends for 2016–2019 as well. In 2020, TGC-14’s net profit fell 8% to Rub 316.7 mln as calculated under Russian Accounting Standards (RAS) and increased 7% to RUB 317 mln (attributable to the shareholders) under International Financial Reporting Standards (IFRS).

Samolet Group board offers to pay RUB 2.5 bln dividends for 2020 On May 27, 2021 it was stated that the board of directors of developer Samolet Group had offered to pay RUB 41 per share, or about RUB 2.5 bln, in dividends for 2020. The dividends can be paid from undistributed net profit for previous years. Samolet Group paid no dividends for 2019. Mikhail Kenin and his family own 37.5% in Samolet Group, Pavel Golubkov 46.5%, Igor Yevtushevsky 10%, Anton Yelistratov 6%.

Utair supervisory board recommends no final dividends for 2020 On May 27, 2021 it was disclosed that the supervisory board of Russian airline Utair had recommended paying no final dividends for 2020 as the company suffered a net loss in the year. Utair paid no dividends for 2016–2019 as well. The net loss of Utair narrowed to RUB 2.1 bln in 2020 from RUB 14.4 bln in 2019, as calculated under Russian Accounting Standards (RAS).

Eurobonds Russia places EUR 1 bln new 15-year Eurobonds at 2.65% On May 20, 2021 it was disclosed that the Russian Finance Ministry had placed EUR 1 bln euros of new 15- year Eurobonds with the yield amounting to 2.65%. The ministry has also placed EUR 500 mln additional bonds maturing in November 2027 at 98.5% of a face value. Final demand for the new bonds exceeded EUR 1.4 bln and for the additional ones EUR 700 mln. The initial yield guidance for the new Eurobonds amounted to 2.875%, the price guidance for the additional Eurobonds was set at least 98.5%, which corresponded to a yield of 1.3674%. Previously, the ministry chose VTB Capital, Gazprombank and Sberbank CID to organize Eurobond offerings in 2021.

NLMK placing EUR 500 mln Eurobonds at 1.45% On May 25, 2021 it was reported that Russian steelmaker (NLMK) is placing EUR 500 mln 5-year Eurobonds with a yield of 1.45%. The final bidding book of investors has exceeded EUR 1.5 bln. The company held a roadshow of the Eurobonds on May 19–21. BofA Securities, J.P. Morgan, and Societe Generale act as the organizers of the placement. Simultaneously with the placement, NLMK plans to buy back USD 470.6 mln Eurobonds maturing in 2023–2024. The company will buy back UISD 266.391 mln Eurobonds maturing in 2023 at USD 1,073 per security and USD 204.177 mln Eurobonds maturing in 2024 at USD 1,083 per security. The company plans to finance the buyback with the new Eurobonds. Currently, NLMK has USD 700 mln Eurobonds maturing in 2023 and USD 500 mln Eurobonds maturing in 2024 in circulation.

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.

For more information kindly contact: Anna Enfiandzhiants Evgenia Makarova Julia Dombrovskaya T +7 (495) 783 13 91 T +7 (495) 783 13 64 T +7 (495) 783 13 15 F +7 (495) 783 13 89 F +7 (495) 783 13 89 F +7 (495) 783 13 20 E [email protected] E [email protected] E [email protected] This document has been prepared exclusively for internal use of VTB Bank (PJSC) customers. The information should not be further distributed or duplicated in whole or in part by any means without the prior written consent of VTB Bank (PJSC). The information contained herein has been prepared on the basis of information which is either publicly available or obtained from a source which VTB Bank (PJSC) believes to be reliable at the time of publication. Information provided herein may be a summary or translation. The content of the material contained herein is subject to change without notice, and such changes could affect its validity. VTB Bank (PJSC) is not obligated to update the material in light of future events. Furthermore, VTB Bank (PJSC) does not warrant, expressly or implicitly, its veracity, accuracy or completeness. VTB Bank (PJSC) and its affiliates accept no liability whatsoever for any use of this communication or any action taken based on or arising from the material contained herein. Additional information may be available upon request. The material in this communication is for information purposes only. Therefore, this communication should not be interpreted as investment, tax or legal advice by VTB Bank (PJSC) or any of its officers, directors, employees or agents and customers should consult with appropriate professional advisers for these specific matters. Nothing expressed or implied herein is intended to create any obligation of VTB Bank (PJSC) and/or impose any liability on VTB Bank (PJSC) and/or create legal relations between VTB Bank (PJSC) and VTB Bank (PJSC) customers.

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