Dear members of OTP Pension and FreeFlight!
Please find below the results of the non-state pension funds managed by OTP Capital.
Actions of the NBU
Macroeconomic environment in Ukraine in April 2024:
reduction of the discount rate to 13.5% in April
low inflation – 3.2% in March
decrease in deposit certificate rates by 1 pp
reduction of the credit refinancing rate from 19.5% to 17.5%
Approval of assistance from the United States
The decision of the NBU Monetary Committee was additionally influenced by the approval of USD 61 billion in aid from the US, USD 9 billion of which will be used to support the budget
Hryvnia instruments
DOMESTIC GOVERNMENT BONDS. The Ministry of Finance began to reduce yields on hryvnia domestic government bonds at primary auctions for the entire line of domestic government bonds
up to 1 year – 15.4%
from 1.5 to 2 years – 16.4%
up to 3 years – 17.7%.
Deposits. Time deposit rates gradually decreased to the levels of 5.0%-12% depending on the term and bank
Hryvnia exchange rate against the dollar. The NBU continues its policy of easing the FX market and helping the market to avoid peaks. Although the demand for foreign currency was elevated in March, the regulator did not prohibit the hryvnia from weakening, maintaining moderate interventions. As a result, the official hryvnia exchange rate depreciated by 2.5% from UAH 38.05 to UAH 39.01, and the cash exchange rate by 2.7% to UAH 39.45.
Stocks. The UX equity index continued its downward trend in April, losing 8.4%. Once again, we note that the lack of liquidity in the equity market is the main feature of the stock market under martial law. The main factors behind the decline were the following stocks in the index basket: Centrenergo PJSC – 19.5%. Raiffeisen Bank, -7.1%.
Instruments in foreign currency
Deposits.
UKRAINIAN GOVERNMENT BONDS. Yields on foreign currency-denominated domestic government bonds remain unchanged in 2024 at primary auctions at 4.6%-4.7% in the dollar and 3.25% in the euro. However, by imposing restrictions on the volume of placements, the Ministry of Finance is forcing investors to compete on the basis of yield to maturity. On the secondary market, yields on foreign currency domestic government bonds do not exceed 4.3% in the dollar and 3% in the euro.
EUROBONDS. Demand for Ukraine’s Eurobonds is very volatile and, as a result, the prices of government bonds are highly volatile, which is reflected in the fund’s performance. In particular, all the gains made in March – a 19.4%-22.2% increase in government bond prices – were lost in April, when prices fell by 13%-17%. The market is nervous in anticipation of the restructuring terms to be announced in May.
What happened to the assets of the OTP Pension fund?
In April, OTP Pension sold UAH 108.7 million worth of government bonds from its portfolio and purchased UAH 109.1 million worth of government bonds with a better yield. On the deposit side, the funds were placed in the amount of UAH 4.1 million with JSC Ukreximbank. In April, OTP Pension earned 1.1% (or 14.3% p.a.) for its participants.
In general, in April, the assets of the OTP Pension fund increased by UAH 10,405,569, or 2.0%. The total net asset value at the end of February amounted to UAH 530,333,183. In April, participants contributed UAH 5,313,153 to the fund, while UAH 680,313 in pensions were paid out.
What happened to the assets of the Free Flight fund?
In April, the Free Flight fund’s portfolio was placed on deposits in the following banks – in the amount of USD 80 thousand in JSC Ukreximbank, USD 80 thousand in JSC Agroprosperis Bank, USD 8 thousand in JSC Tascombank and UAH 1.9 million in JSC Ukrgasbank.
The decline in the value of government bonds in April had a negative impact on the results of the Free Flight fund, with the yield in April decreasing by 1.4% (or 15.8% p.a.) in dollars.
Overall, in April, Free Flight’s assets increased by USD 740,840 or 1.7%. The total net asset value as of the end of February amounted to UAH 44,853,020. In April, participants contributed UAH 862,060 to the fund, while UAH 1,680 in pensions were paid.
We continue to work. So stay calm, believe in Ukraine and invest consciously!
