SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly

Presented by: VTB Bank, Custody

April 30, 2020 Issue No. 2020/16

Market News

Putin orders government to mull lifting COVID restrictions after May 12, 2020 On April 28, 2020 President Vladimir Putin ordered the Russian government and the Federal Service for Consumer Rights Protection and Human Welfare Oversight to prepare recommendations before May 5 on gradual lifting of the coronavirus restrictions starting from May 12. The Russian regions should receive these recommendationds in advance so they have some room for action and for making decisions on their own to soften restrictions, including the lockdown and resumption of work of industrial companies and companies in the services, trade, constructions, agriculture sectors and others. Putin also ordered the government and the regional authorities to prepare a national plan for restoration of the economy. The plan should ensure long- term structural changes in the Russian economy taking into account the new reality. He also ordered the government to work out new emergency measures to support the economy and people as soon as possible. He also said that May 6 through May 8 would be paid days offs in addition to the Day of Spring and Labor and the Victory Day holidays. Nevertheless, the governors should continue working.

Central bank sells RUB 20.5 bln foreign currency on market on April 27, 2020 On April 28, 2020 it was reported that ’s central bank sold RUB 20.5 bln of foreign currency on the domestic market with settlements on April 27. 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

Global Ports appoints Jakobsen from APM Terminals board chairman On April 24, 2020 it was reported that Soren Jakobsen from APM Terminals was appointed as the chairman of the board of directors of Russian stevedore company Global Ports. The official will replace Morten Engelstoft on the position.

Yandex buys back 4.5 mln shares for USD 150 mln since January 1, 2020 On April 28, 2020 Greg Abovsky, Chief Operating Officer and Chief Financial Officer at Russian Internet company , stated that the company bought back 4.5 mln Class A shares for USD 150 mln. The company’s board of directors approved a buyback of Class A shares in November 2019.

Moscow Exchange sets expiration of June futures for WTI at April 30, 2020 On April 28, 2020 it was announced that the Exchange rescheduled the expiration date of futures for the Light Sweet Crude Oil, or the WTI oil blend to April 30 from May 19 and the expiration of the margin option for the futures to April 29 from May 14. The decision is meant to prevent possible negative consequences for the market players and their clients. The expiration price will be the settlement price for

1 the corresponding futures contract set at the New York Mercantile Exchange at about 9.30 p.m. Moscow time on April 30.

TGC-2 IFRS net profit falls 15% to RUB 2.17 bln in 2019 On April 29, 2020 it was reported that the net profit of Russian power producer Territorial Generating Company-2 (TGC-2) fell 15% to RUB 2.171 bln in January–March, as calculated under International Financial Reporting Standards (IFRS). Revenue grew 10% to RUB 41.59 bln, while operating expenses increased 8.5% to RUB 38.4 bln.

Gazprom cuts payments to key management 26% to RUB 3.18 bln in 2019 On April 29, 2020 it was stated that Russian gas giant reduced payments to the management and the board of directors to RUB 3.18 bln in 2019 from RUB 4.312 bln in 2018.

Dividends/coupons may pay RUB 27.35 per share in dividends for January–March 2020 On April 23, 2020 the board of directors of Russian steelmaker Severstal recommended paying RUB 27.35 per share, or a total of around RUB 22.91 bln, in dividends for January–March. The shareholders will consider the recommendation at a meeting on June 5. The register for the meeting will be closed on May 11. The record date for dividends is June 16. Severstal paid RUB 35.43 per share, or RUB 29.68 bln, in dividends for January–March 2019. The core owner of Severstal is tycoon Alexei Mordashov with a stake of 77.03%.

Mother and Child holders decide against dividends for 2019 On April 24, 2020 it was reported that shareholders of Russia’s Mother and Child maternity hospital and clinic chain, operated by MD Medical Group, decided against paying dividends for 2019. An annual general meeting of shareholders took place on April 23. In March, the company’s board of directors recommended paying RUB 8.5 per share, or a total of RUB 639 mln, in dividends for 2019.

TMK board recommends paying no dividends for 2019 On April 24, 2020 the board of directors of Russian oil and gas pipe maker TMK recommended paying no dividends for 2019. The company paid RUB 2.55 per common share in dividends for January–March 2019 and did not pay dividends for 2018. Dmitry Pumpyansky, chairman of the board of directors, is the main beneficiary owner of the company.

NLMK board now recommends RUB 3.12 per share in October–December 2019 dividends On April 24, 2020 the board of directors of Russian steelmaker (NLMK) reduced its recommendations on dividend payments for October–December 2019 to RUB 3.12 per share from RUB 5.16 per share that was opposed by the shareholders on April 24. The shareholders will consider the new recommendation at an extraordinary general meeting by correspondence on May 29. The register for the meeting will be closed on May 5. NLMK paid RUB 5.8 per share in dividends for October–December 2018. In 2019, the company paid RUB 3.22 per share, or a total of RUB 19.298 bln, in dividends for July–September, RUB 3.68 per share, or a total of around RUB 22.06 bln, in dividends for April–June, and RUB 7.34 per share, or a total of RUB 43.99 bln, in dividends for January–March. Vladimir Lisin holds around 81.4% in NLMK through Fletcher Group.

Novatek holders approve RUB 18.1 per share in final dividends for 2019 On April 27, 2020 shareholders of Russian independent gas producer approved paying RUB 18.1 per share, or a total of RUB 54.96 bln, in final dividends for 2019. Novatek already paid RUB 14.23 per share in dividends for January–June 2019. Thus the company’s total dividend payments for 2019 will amount to RUB 32.33 per share, or a total of RUB 98.16 bln. The company will allot almost 39% of its normalized net profit for 2019, which grew 5.2% to RUB 254.002 bln, for the dividend payment. CEO holds 24.75% in Novatek, gas giant Gazprom owns 9.99%, tycoon ’s companies Ena Invest and Volga Group own 19.16% and 4.3%, respectively, and France’s Total has a 19.4% stake.

Polymetal to pay USD 0.42 per share in final dividends for 2019 On April 27, 2020 shareholders of Russian gold producer approved paying USD 0.42 per share, or around USD 197 mln, in final dividends for 2019. The payment will account for 50% of the company’s adjusted net profit for July–December calculated under International Financial Reporting Standards (IFRS). Total dividends for 2019 will thus amount to USD 0.82 per share, or around USD 385 mln. ICT Group of tycoon Alexander Nesis owns about 27% in Polymetal, while PPF Group NV of Petr Kellner holds 13%, and tycoon and his family owns 10%. More than 50% in Polymetal is free-float.

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Freight One board recommends paying RUB 17 bln in 2019 dividends On April 28, 2020 the board of directors of railway cargo operator Freight One, part of Russian billionaire Vladimir Lisin’s Fletcher Group, recommended paying RUB 17 bln in dividends for 2019. The dividend payment will account for 90% of the company’s net profit for 2019 calculated under Russian Accounting Standards. The company did not pay dividends for 2018.

Gazprom Neft board recommends paying RUB 37.96 per share in 2019 dividends On April 28, 2020 the board of directors of Russian oil major recommended paying RUB 37.96 per share in dividends for 2019. The shareholders will consider the recommendation at an annual general meeting to be held in absentia on June 11. The record date for dividends is June 26.

Moscow Exchange to pay RUB 7.93 per share in dividends for 2019 On April 28, 2020 shareholders of the Moscow Exchange decided to pay RUB 7.93 per share, or a total of RUB 18.052 bln in final dividends for 2019. The company will pay the dividends using the entire RUB 15.703 bln net profit for 2019 and RUB 2.349 bln from undisbursed profits for previous years. The record date for the dividends is May 15. Previously, Moscow Exchange paid RUB 7.7 per share, or a total of RUB 17.528 bln in final dividends for 2018. The largest shareholders of the bourse are Russia’s central bank with an 11.779% stake, Sberbank with 10.002%, state development corporation VEB.RF with 8.404%, and the European Bank for Reconstruction and Development with 6.069%.

Director says Russia shareholders may change 2019 dividends On April 28, 2020 Carlo Palasciano Villamagna, General Director of power utility Enel Russia, said that the company did not rule out that the shareholders might change dividends for 2019 during an annual general meeting, but recommendation of the board of directors still stands. The board earlier recommended paying 8.5 kopecks per share, or a total of RUB 3 bln, in final dividends for 2019 using undisbursed profits for previous years.

MOESK board recommends paying RUB 0.025 per share in 2019 dividends On April 29, 2020 the board of directors of Moscow United Electric Grid Company (MOESK), a unit of power grid holding , recommended paying RUB 0.025 per share in dividends for 2019. The record date for dividends is June 9. MOESK paid RUB 0.059 per share in dividends for 2018.

MMK puts off decision on interim dividends for 2020 to autumn On April 29, 2020 Viktor Rashnikov, Chairman of the Board of Directors and core beneficiary of Russia’s Magnitogorsk Iron and Steel Works (MMK), stated that the company decided to postpone decisions on interim dividends for 2020 to the autumn due to the spread of coronavirus.

Beluga Group recommends RUB 32 per share in dividends for 2019 On April 29, 2020 the board of directors of Russian alcohol producers Beluga Group recommended paying RUB 32 per share, or a total of RUB 505.6 mln, in dividends for 2019. The decision is subject to approval by an annual general meeting of shareholders on June 1. The record date is recommended to be set at June 12.

NLMK board recommends paying RUB 3.21 per share in January–March 2020 dividends On April 30, 2020 the board of directors of Russian steelmaker Novolipetsk Steel (NLMK) has recommended paying RUB 3.21 per share in dividends for January–March. The dividend payment will account for 75% of the company’s free cash flow. NLMK paid RUB 7.34 per share in dividends for January–March 2019. Businessman Vladimir Lisin holds around 81% in NLMK through Fletcher Group.

Protek board recommends paying no dividends for 2019 On April 30 the board of directors of Russian pharmaceutical holding Protek has recommended paying no dividends for 2019. The shareholders will decide on the issue at an annual general meeting on June 9. Vadim Yakunin owns 24.42% in Protek directly and 59.28% through LLC Protek. Hungary's Gedeon Richter sold its 5% stake in Protek in April. Before the deal, 11.3% were in free float.

Eurobonds / DRs Foreign investors buy 80% of ’s Eurobonds On April 29, 2020 Denis Shulakov, First Vice President of , one of the organizers of a recent Eurobond offering of Russian oil company Lukoil, said that foreign investors participated actively in the

3 offering and bought around 80% of the issue. On April 28, Lukoil placed USD 1.5 bln of 10-year Eurobonds with an annual yield of 3.875%. Initially, the yield guidance was set at 4.25%, but it was later reduced to around 4% plus or minus 0.125 percentage points. Aside from Gazprombank, Citi and Societe Generale were the organizers of the offering. The final bid book amounted to USD 3.5 bln annually. Investors from the U.S. bought 20% of the issue, from the U.K. 12%, from Switzerland 15%, from other European states 20%, from Asia and other regions 13%, and from Russia 20%.

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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