Page 54 - UKRRptJun19

8.3 Stock market
8.3.1 Equity market dynamics
Cabinet orders state firms to pay 50%-90% dividends from 2018 profit.
Ukraine’s Cabinet of Ministers published at the start of May a resolution on dividend distribution of state-controlled companies adopted on April 24. According to the resolution, all state-controlled companies should pay 90% of their 2018 profit in dividends if it exceeded UAH50mn, and 50% if the profit was below UAH50mn. Exceptions are Oschadbank (OSCHAD), Ukrainian Railway (RAILUA) and two other state companies, which were ordered to pay 30% of their profit in dividends. The resolution slightly contradicts earlier statements that declared state enterprises should pay only 50% of their profit in dividends. Most such companies, including Centrenergo (CEEN UK) and Turboatom (TATM UK), have already convened AGMs at, which shareholders already decided to pay 50% in dividends (although their 2018 profit exceeded UAH50mn). Meanwhile, the AGMs of high-profit companies like Naftogaz and Ukrnafta (UNAF UK) have yet to decide on their dividends. So they will have little choice but to obey the published government regulation and distribute almost all their 2018 profit in dividends. For the state enterprises, such large dividend payouts do not look efficient. But taking into account the state budget’s weak interim collections, they look like an aggressive attempt to generate revenue.
Ukraine central bank raises limit on dividend repatriation. The National Bank of Ukraine (NBU) announced on May 7 it has raised the limit on dividend repatriation to €12mn from €7mn per month per company. The decision takes effect on May 8.
“The raised limit of €12mn indeed satisfies the needs of all companies with foreign investments operating in Ukraine. However, we realize that this limit is a certain barrier for new investors, and our goal is to lift the limit," NBU deputy head Oleh Churiy noted.
In addition, Churiy said the NBU’s recent ForEx market deregulation hasn't
54 UKRAINE Country Report June 2019 www.intellinews.com