Dear investors, we invite you to review the performance results of the mutual investment funds managed by OTP Capital.
NBU Actions
At the beginning of 2024, the macroeconomic environment in Ukraine stabilized at levels acceptable to the NBU:
- Low inflation – 4.7% in January;
- Managed flexible exchange rate of the hryvnia without significant fluctuations;
- Decrease in interventions from 2.5 billion in January to 1 billion USD.
The market has adjusted to a consistent macroeconomic policy from the regulator for the next six months. A major event that could affect the fragile stability in Ukraine is the absence of military aid in the amount of 60 billion USD from the USA.
Interest rates on term deposits gradually decreased to levels of 9%-14%, depending on the term.
Hryvnia Instruments
Government Bonds (OVDP). In February, the Ministry of Finance maintained the yield curve of the primary market OVDP at January levels across the entire OVDP lineup:
- Up to 1 year – 16.5%
- From 1.5 to 2 years – 17.7%
- Up to 3 years – 18.6%
Deposits. Interest rates on term deposits gradually decreased to levels of 9%-14%, depending on the term.
Exchange Rate of the Hryvnia to the Dollar. The NBU continues its easing policy on the currency market and helps the market avoid peak loads. The demand for currency was moderate, and although the market mainly satisfied demand through supply, the official exchange rate of the hryvnia weakened by 1.3% from 37.55 to 38.05 UAH/USD, and the cash rate – by 0.7% to 38.42 UAH/USD.
Stocks. The stock index (UX from UB) continued its downward trend for the second consecutive month, losing 4% in February. Once again, we note that the absence of liquidity in the stock market is a main characteristic of the stock market under martial law. The main factors of the decline were the following index basket shares – PAT “Centrenergo”, – 20.4%, and AT “Raiffeisen Bank”, – 10.2%.
Foreign Currency Instruments
Government Bonds (OVDP). Yields on foreign currency-denominated OVDP remained unchanged in 2024 at primary auctions at levels of 4.7% in USD and 3.25% in EUR. However, by introducing limitations on the volume of placement, the Ministry of Finance forces investors to compete in terms of yield to maturity. On the secondary market, yields on foreign currency OVDP do not exceed 4% in USD and 3% in EUR.
Deposits. Interest rates on USD deposits in February remained unchanged, staying at the previous levels of 1.5%-3% in USD.
Foreign Currency Bonds (OZDP). Uncertainty regarding financial aid for the next year from allies, the USA, and the EU, adds volatility to the OZDP prices: after decreasing in January, OZDP regained lost ground in February and grew by 3%-9.2% across the entire issuance lineup.
What Happened with the Assets of the Fund Managed by OTP Capital?
OTP Classic
In the reporting month, OVDPs worth 4.7 million UAH were purchased for the “OTP Classic” fund portfolio. No actions were taken in the deposit part.
In February, the “OTP Classic” fund earned its participants 1.3% (or 17.9% annually).
OTP Children
In the reporting month, OVDPs worth 0.4 million UAH were sold from the “OTP Children” fund portfolio. In February, the “OTP Children” fund earned its participants 1.4% (or 19.5% annually).
OTP Currency
No actions were taken with the assets of the “OTP Currency” fund portfolio in the reporting month. The growth of OZDP in February helped the “OTP Currency” earn its investors 1.4% (or 19.4% annually).
OTP Equity Fund
The management of the “OTP Equity Fund” in February was aimed at reallocating funds into short-term deposits at maximum rates, in particular, deposits were reallocated in AT “Ukreximbank” for an amount of 0.93 million UAH, AT “Ukrgazbank” for an amount of 0.93 million UAH, and in AT “Taskombank” for an amount of 0.9 million UAH.
The fall in shares of AT “Raiffeisen Bank” and PAT “Centrenergo” in February was reflected in the fund’s performance in the reporting month– the “OTP Equity Fund” fell by 2.7%.
We continue to work. So, let’s remain calm, believe in Ukraine, and invest wisely!
