SSEECCUURRIIITTIIIEESS MMAARRKKEETT NNEEWWSSLLEETTTTEERR weekly Presented by: VTB Bank, Custody September 24, 2020 Issue No. 2020/37 Market News Moscow Exchange to restart trade in RUSAL’s shares on September 28, 2020 On September 22, 2020 a spokesperson for the Moscow Exchange stated that the bourse suspended trade in shares of Russian aluminum giant UC RUSAL on September 22 and would restart it on September 28 after the company finishes the registration in the country. The suspension is connected to re-registration of the company from the Jersey Island into Russia. RUSAL said in a statement that the central bank had already registered the issue and a prospectus of securities under the re-registration process, and the company expects to obtain registration as an international company with the Federal Tax Service on Friday. In April 2018, the U.S. imposed sanctions against 38 Russian tycoons, officials and companies, including Oleg Deripaska and his companies – En+ Group, carmaker GAZ Group, holding Basic Element, and RUSAL – among others. In December, the shareholders of En+ Group unilaterally voted for reregistration of the business in Russia and for Deripaska’s ownership reduction below 50% and an end to his influence on the board of directors. RUSAL and En+ Group were decided to be reregistered in a special administrative zone in Kaliningrad. Moscow Exchange to suspend trading in Mostotrest shares from September 24, 2020 On September 23, 2020 it was announced that the Moscow Exchange would suspend trading in the shares of construction company Mostotrest from September 24 due to reorganization of the company. Ruble falls 82.35 kopecks to RUB 77.18 per US dollar On September 24, 2020 it was reported that the weighted average rate of the Russian ruble with tomorrow settlement fell by 82.35 kopecks against the U.S. dollar to RUB 77.1780 on September 24. On September 23, the weighted average rate stood at RUB 76.3545 against the dollar. Politics PM discusses 3-year budget draft with State Duma Speaker On September 24, 2020 it was reported that Prime Minister Mikhail Mishustin has discussed a draft three- year budget with Speaker of the State Duma Vyacheslav Volodin at a working meeting. The government also said that the draft would be submitted to the State Duma, parliament's lower chamber, next week. According to the statement, seven draft laws concerning the budget, tax and tariff legislation, have already been submitted to the State Duma. Company News ICT sells 4% in Polymetal for 342 mln British pounds On September 18, 2020 it was reported that Russian tycoon Alexander Nesis’ ICT Holding sold 19 mln shares, or around 4%, in gold producer Polymetal at a price of GBP 18 per share. The entire stake was sold for GBP 342 mln. BofA Securities organized the deal. Before the deal, ICT Holding held around 28% in Polymetal. 1 Share of non-residents among Sberbank shareholder falls to 43.75% On September 18, 2020 Bella Zlatkis, Deputy CEO of Russia’s top bank Sberbank, stated that the share of non-residents in the shareholder structure decreased by 1.3 percentage points to 43.75% from April 2019. CFO Alexandra Buriko said that around 70% of the non-resident holders are U.S. and U.K. citizens. U.S. investors account for around 40% of the free float, U.K. citizens for nearly 30%, continental Europeans for 15%, and Asian investors for 10%. Buriko also said that the share of individuals in the bank’s shareholder structure rose to 4% from 3.15% as of April 29, 2019. Bank Trust says RUB 329.2 bln suits versus Rost Bank owners concern bad deals On September 21, 2020 it was reported that the two suits that Russia’s Bank Trust filed against former owner of Rost Bank Mikail Shishkhanov and other former executives of the bank totaling RUB 329.2 bln were connected to deals that inflicted financial damage on the bank. Earlier in the day, the bank filed RUB 306.5 bln suit against Shishkhanov and three other top managers of the bank, and RUB 22.7 bln suit against Shishkhanov and five co-defendants, including three individuals and two companies. Bank Trust said that the first suit was connected to several deals done in 2015–2017 that hurt the bank, including a capital injection into Rost Capital and Rost Investitsii, to purchase non-liquid securities, and to provide non-performing loans. The second suit was connected to a 2017 unbeneficial purchase of shares of OTD Yasenevo from defunct company Malarton Holdings Limited. Aeroflot announces beginning of SPO, central bank registers shares On September 21, 2020 it was stated that the central bank registered an issue of additional shares of Russian national flagship carrier Aeroflot, and the company announced the beginning of the secondary public offering (SPO) to float up to RUB 1.7 bln. The shareholders will be able to use preemptive rights to buy the shares till October 1, 2020. The amount of placed shares may be lower than 1.7 bln, and it depends on preemptive rights used by shareholders and on results of the public subscription. The shares that will not be placed following implementation of preemptive rights and public subscription will be canceled. The government owns 51.17% in Aeroflot, state corporation Rostec owns 3.5%, and institutional investors, individuals, and the management of the carrier own the rest. The current shareholder equity of Aeroflot comprises 1,110,616,299 shares, so the SPO would more than double it. The federal authorities will have to place the additional shares in such a way that the government maintains its stake in the company. The airline will use the money on general corporate goals and to reduce its debt burden. Ex-CEO of VimpelCom Izosimov appointed as M.Video-Eldorado CEO On September 21, 2020 it was reported that Alexander Izosimov, former head of Russian mobile operator VimpelCom, had been appointed as the CEO of electronic goods retailer M.Video-Eldorado. Izosimov will proceed with the liabilities on October 1. Rosneft says buys back USD 500,000 of securities on September 14–18, 2020 On September 21, 2020 it was announced that Russian oil major Rosneft bought back 104,000 shares and global depositary receipts (GDRs) for USD 500,000 on September 14–18. The company bought 10,000 common shares and 94,000 GDRs. The weighted average price stood at USD 5.05 apiece. Since the launch of USD 2 bln buyback program on March 23, the company bought back 52.348 mln securities for USD 232.9 mln. MTS buys back 0.008% of capital under repurchase plan On September 22, 2020 it was reported that Bastion, a wholly-owned subsidiary of major Russian mobile operator MTS, acquired 163,952 MTS shares, representing 0.008% of the operator’s capital. The shares were acquired under a repurchase plan announced on March 31, and since then Bastion has acquired 23.7 mln MTS common shares, including 8.223 mln shares bought back from the operator’s main owner, multi- industry holding Sistema for RUB 2.715 bln. In total, the purchased shares account for 1.1% of the capital. Under the Russian law, MTS must disclose any shares acquired by the company or by any of its subsidiaries. Yandex price ascends 3.6% in Moscow amid project TCS Group deal On September 23, 2020 it was stated that Yandex’s ordinary shares gained 3.60% to RUB 5,076.20 on the Moscow Exchange as of 10.22 a.m. local time as the rally continues after the company confirmed its negotiations to acquire 100% of TCS Group. Yandex’s American depositary receipts rocketed 11.80% to USD 66.06 on September 22 on the Nasdaq. 2 Tinkov says yet to sell TCS, deal to become merger with Yandex On September 23, 2020 Russian businessman Oleg Tinkov said that he had not sold Tinkoff Bank, and the deal with Internet company Yandex was being discussed. Yandex said late on September 22 that it was in negotiations to fully acquire Tinkov’s TCS Group for USD 5.48 bln. Protek to mull delisting from Moscow Exchange on November 13, 2020 On September 24, 2020 it was reported that shareholders of Russian pharmaceutical company Protek would consider delisting of ordinary shares from the Moscow Exchange at an extraordinary meeting on November 13. As of September 30, 2019, Vadim Yakunin owned 24.42% in Protek directly and 59.28% through LLC Protek, and the company’s subsidiary CV Protek owned 2.57%. In January 2020, CV Protek made an offer to buy 13.73% in the parent company from the group’s minority shareholders. CEO Dmitriev says RDIF to invest into Russia’s Sovcomflot On September 24, 2020 Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), stated that the company plans to invest into state-owned shipping company Sovcomflot. On September 15, Sovcomflot said that it planned to hold an initial public offering (IPO) on the Moscow Exchange to raise at least USD 500 mln. The Finance Ministry said in a statement that the government may cut its stake in the company to 75% plus one share from 100%. Dividends/coupons Rusagro owners approve USD 25.6 mln in interim dividends On September 18, 2020 shareholders of Russian agricultural holding Rusagro approved paying USD 25.561 mln in interim dividends. The dividends would amount to USD 0.95 per share and USD 0.19 per global depositary receipt (GDR). Excluding the treasury GDRs, the family of Russian businessman Vadim Moshkovich owns around 71.9% in Rusagro, CEO Maxim Basov holds 7.3%, and free-float accounts for 20.8%.