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Presented by: VTB Bank, Custody

December 31, 2020 Issue No. 2020/51

VTB Bank Custody wishes you a healthy, wealthy and prosperous New Year full of joy, happiness and success! Let dreams come true in the year 2021!

Legislation

Russian President ratifies double taxation deal with Cyprus and Luxembourg On December 30, 2020 Russian President Vladimir Putin ratified double taxation avoidance agreements with Cyprus and Luxembourg, which increases taxes on dividends and interest to 15%. Earlier the agreements were ratified by the Russian Parliament. In March, Russian President Vladimir Putin suggested imposing a 15% tax on dividend yields withdrawn to accounts in foreign jurisdictions, which needs adjustments to agreements on avoidance of double taxation with other countries. will cancel such agreements unilaterally if a consensus is not reached. Russia and Cyprus signed the protocol introducing changes to the double taxation avoidance agreement in September. The protocol with Luxembourg was signed in November. The base rate was raised to 15%, a reduced one of 5% is envisaged for institutional investments and public companies with no less than 15% stakes in free float if such companies owned at least 15% in the company paying dividends for no less than a year.

Central bank caps e-assets deals for non-professionals at RUB 600,000 within a year On December 25, 2020 Central bank published an order allowing non-qualified investors in Russia to buy digital financial assets worth no more than RUB 600,000 within a year. Individuals who are not qualified investors will be able to buy digital financial assets during a year via an operator of exchange of digital financial assets on condition that the amount of money transferred in payment for them or a gross value of other digital financial assets transferred as consideration does not exceed RUB 600,000. Only qualified investors will be authorized to buy digital financial assets issued in the information systems organized in accordance with a foreign law.

Company News

Bank St Petersburg board decides against new buyback On December 24, 2020 it was stated that the supervisory board of Bank Saint Petersburg had decided against a new round of the buyback program. It was said that the purchase of common uncertificated shares of Bank Saint Petersburg shall not be made. The bank approved measures in October 2018 to triple its market capitalization until 2021, and planned to consider buybacks at least twice a year. In April 2020, Bank Saint Petersburg decided against a buy back.

Mosenergo board approves RUB 15.1 bln bond program On December 25, 2020 it was reported that the board of directors of Russian power utility Mosenergo had approved a perpetual program of RUB 15.1 bln bonds. The bonds will be offered publicly for up to 819 days. Gazprombank will be the organizer.

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Russia's Group Onexim says buys 5.35% stake in On December 25, 2020 it was stated that Group Onexim of Mikhail Prokhorov had acquired a 5.35% interest in children goods retailer Detsky Mir. Multi-industry holding earlier divested from the asset, selling 20.38% in Detsky Mir.

Altus Capital says consolidates 25% stake in Detsky Mir On December 29, 2020 it was stated that investment company Altus Capital had completed acquisition of a 25% interest in children goods retailer Detsky Mir. Altus Capital initially planned to buy 29.9% in Detsky Mir and accept bids until December 24. But later the fund reduced the plan to 25% and stopped taking bids on December 16.

Moscow Exchange raises stake in exchange to 13% On December 28, 2020 The Exchange stated that they had raised the stake in the Kazakhstan Stock Exchange to 13.1% from 3.32%. The Kazakhstan's and Moscow stock exchanges signed a strategic partnership agreement in 2018, envisaging the increase of stake in the Kazakhstan's exchange to 20% for up to RUB 338 min. The bought 3.32% in the Kazakhstan Stock Exchange in January 2019.

Auction to sell Russian Railways unit’s 39.81% in TGC-14 cancelled On December 28, 2020 a spokesperson for the Russian Auction House told reporters that the auction to sell the entire 39.81% stake of a Russian Railways’ subsidiary Energopromsbyt in power utility Territorial Generating Company-14 (TGC-14) had been cancelled. The initial price for the stake was set at RUB 1.68 bln. In March, a similar auction with an initial price of the stake set at RUB 2.3 bln was cancelled due to a lack of bids. TGC-14 distributes heating to consumers in the Zabaikalsky Region and the republic of Buryatia. It comprises seven combined heat and power plants and two energy complexes with the combined installed capacity of 650 megawatts and heat capacity of 3,130 gigacalories.

Rosneft buys Taimyrneftegaz On December 28, 2020 it was stated that Russian oil major has acquired Taimyrneftegaz, which owns license for the Payakhsky and Severo-Payakhsky sites in the Krasnoyarsk Region. Taimyrneftegaz was previously owned by Independent Petroleum Company of Rosneft’s former President Eduard Khudainatov.

Russia's Rosneft says cuts stake in Vostok Oil to 90% from 100% On December 28, 2020 it was stated that Russian oil major Rosneft had cut its share in Vostok Oil project to 90% from 100% to Singapore's Trafigura. The oil company owns the project via affiliates RN-Trade, RN- Resource, RN-Commerce and Finance-M-com. In November, Rosneft’s board of directors approved the deal.

MTS says buys back 0.065% in ordinary shares via unit Bastion On December 28, 2020 Bastion, a wholly-owned unit of Russia’s major mobile operator MTS, had acquired 1,300,000 ordinary shares of MTS, or 0.065% of the capital, the operator said late on Monday in a statement. The shares were acquired for MTS’ long-term incentive program for senior management.

Sistema, Sberinvest JV buy Group Elektrozavod for RUB 25 bln On December 28, 2020 it was stated that Megapolis-Invest, 75.86% owned by multi-industry holding Sistema and 24.14% by SberInvest, had bought Group Elektrozavod from private investors for RUB 24.7 bln. Group Elektrozavod holds a 64.37% stake in Elektrozavod and 100% in Elektrokombinat. The joint venture plans to find co-investors in both the electrical transformer and development business of the group. Sistema and SberInvest gave shareholder financing of RUB 11 bln and RUB 3.5 bln respectively to Megapolis-Invest. SberInvest also gave Megapolis-Invest a RUB 10.2 bln loan.

Polyus Gold's share in falls to 76.34% after buyback On December 29, 2020 it was stated that Russian gold producer Polyus had bought 1,110,779 own common shares from Polyus Gold International Limited, cutting its stake to 76.34% from 77.152%. The amount of the deal was about RUB 17.19 bln. The company approved the buyback program in November. The finish was scheduled for December 24 and the auction price range was USD 210–240 per ordinary share and USD 105–120 per depositary share. According to Polyus' statement on December 28, the price was USD 210 per ordinary share and USD 105 per depositary share.

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Beluga Group to pay over 25% of profit in 2020 dividends On December 29, 2020 CEO of Russian alcoholic drinks producer Beluga Group Alexander Mechetin said at a conference that the company plans to pay over 25% of profit in dividends for 2020 and revise its dividend policy. The CEO added that that is due to both good results and the needs that the company sees in 2020– 2021 for investments. He also mentioned that hopefully that rule will become regular for Beluga Group. He also said that the company plans to make its dividend policy more transparent. Revenue of Beluga Group will grow by 20% in 2020, Mechetin said. In 2019 the group’s revenue stood at RUB 53.074 bln, and shipments of alcoholic beverages were at 14.124 mln decaliters.

Tinkov says deal failed on USD 200 mln price difference On December 29, 2020 Russian businessman and TCS Group founder said in an interview that acquisition by Yandex of a group with core asset had failed because of USD 200 mln difference in price between the companies. TCS Group and Yandex said they agreed on the acquisition by the Internet company of the group for USD 5.48 bln, but later TCS said it terminated the talks.

Otkritie FC Bank sells VTB shares to Bank Trust for RUB 44.6 bln On December 30, 2020 it was stated that Otkritie Financial Corporation (FC) Bank had signed a deal to sell a 9% voting stake in VTB to Bank Trust for RUB 44.58 bln. On November 27, a central bank official told reporters that Bank Trust will buy a 9% stake in VTB from Otkritie FC Bank on market terms, and that the central bank would provide financing of no more than RUB 79.8 bln for the deal.

Russian Railways board re-elects Belousov as chairman On December 30, 2020 it was stated that the board of directors of Russian Railways had re-elected First Deputy Prime Minister Andrei Belousov as its chairman. The government, which owns 100% in Russian Railways, earlier approved the relevant directive. The board of directors appointed by the state in September comprises 11 representatives of the government and three independent directors.

Goldman Sachs boosts share in Detsky Mir to 5.26% from 4.89% On December 30, 2020 it was disclosed by the reporters that investment bank increased its share in largest children goods retailer Detsky Mir to 5.26% from 4.89% on December 21. Detsky Mir said earlier in December that Goldman Sachs International had reduced its direct stake in the retailer to 4.62% from 5.08%, and Goldman Sachs Group had decreased its indirect shareholding to 4.78% from 8.32%.

Altus Capital cuts stake in Pharmacy Chain 36.6 to 10.03% On December 30, 2020 it was stated that Investment fund Altus Capital Pharmacy Retail 1 Limited had reduced the stake in Pharmacy Chain 36.6 to 10.03% from 15.35%. The fund controlled 1.17 bln shares of the pharmacy before the deal and 765.63 mln after.

Russia adopts subsidy rules for perpetual bond coupons On December 30, 2020 it was disclosed by the reporters that the Russian government had adopted the rules of subsidies on coupon payments to Gazprom’s perpetual bond holders, ordering to take the subsidies into account during dividend calculation. The federal budget subsidies shall be paid if the issuer unilaterally refuses to pay coupons. The document seen by the reporters covers only the Gazprom bonds, whose issue and refusal to pay interest, were agreed with the government.

Dividends/coupons says to pay RUB 245.31 per share in January–September dividends On December 25, 2020 it was reported that the shareholders of Russian retailer Magnit had approved paying RUB 245.31 per share, or a total of RUB 25 bln, in dividends for January–September. The record date is January 8, 2021. VTB is the key shareholder of Magnit with a 17.28% stake. Marathon Group and companies of Alexander Vinokurov own about 16.7%.

MMK says to pay RUB 2.391 per share in dividends for July–September On December 29, 2020 it was stated that the shareholders of Russia’s Magnitogorsk Iron and Steel Works (MMK) had approved paying RUB 2.391 per share in dividends for July–September. The company previously paid RUB 0.607 per share in dividends for April–June, which accounted for 200% of its free cash flow. In 2019 the company paid RUB 1.488 per share, or RUB 16.627 bln, or 100% of free cash flow, in dividends for January–March; RUB 0.69 per share, or RUB 7.71 bln, or 200% of free cash flow, in dividends for April–June; and RUB 1.65 per share, or RUB 18.438 bln, or 100% of free cash flow, in dividends for July–

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September; and RUB 1.507 per share or Rub 16.84 bln in dividends for October–December. Viktor Rashnikov, chairman of the board of directors, holds 84.26% in MMK, while free float accounts for 15.7%.

Globaltrans says to pay RUB 5 bln in final 2020 dividends On December 29, 2020 it was stated that one of Russia’s largest railway operators Globaltrans had confirmed the intent to pay about RUB 5 bln, or about RUB 28 per share, in final dividends for 2020, taking into account the recent business dynamics of the group and its compliance with expectations of the executives. The company separately said that it plans capital expenditures at about RUB 6–7 bln in 2021. The company will retire about 100 vehicles, the capital expenditures on fleet extension are not to be large.

Chelyabinsk Pipe Plant to pay RUB 6.55 per share in January–September dividends On December 30, 2020 it was stated that the shareholders of Russia’s Chelyabinsk Pipe Plant had approved paying RUB 6.55 per share, or a total of RUB 2.002 bln, in dividends for January–September using undisbursed profits of previous years. The record date for the dividends is January 10, 2021. In February the board of directors approved a new dividend policy, under which the company will pay dividends at least twice a year with the minimum combined payout for a year of RUB 7.5 bln in 2020 and in 2021. The company previously paid RUB 8.18 per share, or a total of RUB 2.5 bln, in final dividends for 2019. The core shareholders of the company are Board of Directors Chairman Andrei Komarov with a 77.26% stake and Pavel Fyodorov with 10.67%.

Novorossiysk Grain Plant to pay RUB 10.92 per share in January–September dividends On December 31, 2020 it was disclosed that the shareholders of Russia’s Novorossiysk Grain Plant had approved paying RUB 10.92 per share, or a total of RUB 738.159 mln, in dividends for January–September 2020. The record date is January 14. The company paid RUB 6.36 per share in dividends for January– September 2019. United Grain Company holds 50.99% stake in Novorossiysk Grain Plant, Demetra-holding 35.6%.

Eurobonds / DRs Rosneft says buys back USD 50,000 of securities in December 21–25 On December 29, 2020 it was stated that Russian oil major Rosneft paid USD 50,000 to buy back 8,000 global depositary receipts (GDRs) from December 21 through December 25. The weighted average price stood at USD 5.73. Since the launch of the USD 2 bln buyback program on March 23, the company has bought back 80.976 mln securities for USD 370.68 mln.

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, "”, ““ 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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