Page 9 - BNE_magazine_06_2020 Growers

bne June 2020 The Month That Was I 9
Finance
Eastern Europe
Russia's Finance Ministry is preparing a massive increase in OFZ federal bonds issuance in order to finance the coronavirus (COVID-19) fiscal stimulus. OFZ issues are in record-high demand on expectations of lower interest rates. The Finance Ministry already has placed over RUB1.1 trillion ($15.5bn) worth
of bonds this year, out of originally planned domestic borrowings of RUB2.3 trillion. Previously extra borrowing of RUB2 trillion was said to be possible.
Russia’s leading petrochemical producer Sibur Holding has successfully closed the order book for its BO-01 and BO-02 exchange-traded bond issues, worth RUB10bn ($139mn) and RUB5bn ($69mn) respectively, that pay a fixed at 5.50% per annum – the lowest ever corporate bond yields.
Russian development bank and state investment hub VEB.RF (former Vneshekonombank) could invest RUB100bn ($1.41bn) of pension savings in perpetual bonds of Russian Railways (RZD).
The supervisory board of Russia’s largest bank Sberbank met on May 19 and decided to delay its AGM from 26 June to 25 September. That means the decision on the 2019 dividend size will now only be addressed in August. The record date for dividend payments has now been moved to October 5. Investors will be watching closely, as the bank
said earlier that it intends to increase the dividend payments closer to 50% of net profits.
Net profit at Ukraine's PrivatBank, nationalised in late 2016, jumped
by 2.5 times year on year to UAH 32.6bn ($1.2bn) in 2019. The assets of PrivatBank increased by 11.4% y/y to UAH309.7bn last year. According to the National Bank of Ukraine (NBU), the bank was ranked first among 75 banks operating in the country in terms of assets.
Central Europe
The yield of Hungary’s 10-year
bond fell below 2% again. Hungary's state debt manager sold HUF87bn (€250mn) of bonds at auctions on May 21, HUF17bn more than planned. The average yield was 1.2%, 9bps under the secondary market benchmark and 14bps lower than the yield at the previous auction.
The number of companies that have listed their corporate bonds on the Budapest Stock Exchange's Xbond market has reached ten. Bonds with
a face value of HUF232.5bn (€653mn) have been listed since oil and gas company MOL became the first to list in December. The National Bank of Hungary aims to beef up Hungary's relatively small corporate bond market.
MTB Magyar Takarekszovetkezeti Bank (MTB), the "central bank"
for Hungary's integrated savings cooperatives, and MKB Bank have agreed to set up a joint financial holding company in a first move towards a merger. The partners have their eye on challenging market leader OTP bank.
Czech bank mortgage issues had their strongest ever April despite the coronavirus pandemic and a decrease in volumes of mortgages m/m. The banks extended mortgage loans worth CZK17.845bn (€701.3mn) in April. The average mortgage interest rate in April, after three months of growth, fell to 2.39% from 2.45% in March.
Southeast Europe
Slovenia’s banks reported pre-tax profit of only €69.6mn in the first quarter of the year, falling by more than half from the same period a year ago, according to the central bank. Slovenia’s banks’ net interest income was only minimally higher than in the first quarter last year to €165.8mn,
while non-interest income fell 28.5% y/y to €89.3mn.
UEA Private equity company Growmore group took control of Lithuania’s top six lender Medicinos Bankas in May to strengthen Growmore Group’s position in the EU, the company said. A retail and SME specialist, Medicinos Bankas manages €365mn assets and posted a net profit of €3.99mn in 2019, growth of 63.9% versus 2018.
Romanian state-controlled hydropower group Hidroelectrica has picked STJ Advisors Group as advisers for a planned IPO that the supervisory board chief says will probably take
place next year. The fee for this service will be €0.95mn, Profit.ro reported.
The company announced an updated investment strategy that involves projects worth RON26bn (€5.36bn)
by 2030.
Romania’s Ministry of Finance raised €3.3bn with two Eurobonds with maturities of five and 10 years on May 19. The target size of the two bonds
was initially set at €3bn with €1bn for the five-year maturity and €2bn for the 10-year maturity, but both tranches were heavily oversubscribed. The coupon
for the five-year tranche was set at mid-swap plus 305bp, and the 10-year tranche mid-swap plus 375bp.
Eurasia
Uzbekistan’s Agency for Capital Market Development has granted licences to the US financial company Bluestone Financial Group for the provision of services of an investment intermediary, investment consultant and trustee of investment assets. The licences make Bluestone a fully regulated investment bank in Uzbekistan.
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