Dear investors, please find below the results of the mutual funds managed by OTP Capital.
NBU actions
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 USD and 3.25% in EUR. 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 fund managed by OTP Capital?
OTP Classic.
In the reporting month, UAH 11.6 million worth of government bonds were sold from the portfolio of the OTP Classic fund and UAH 10.4 million worth of government bonds with a better yield were purchased instead. In April, the OTP Classic fund earned 1.4% (or 17.8% per annum) for its participants.
OTP Children
In the reporting month, UAH 0.5 million of government bonds were sold from the portfolio of the OTP Children fund. In April, the OTP Children fund earned 1.5% (or 19.9% p.a.) for its participants.
OTP Currency
In the reporting month, no active actions were carried out with the assets of the OTP Currency fund. The decline in the value of government bonds in April had a negative impact on the results of the OTP Currency fund, which led to a decrease in yield by 6.1% (or 53.6% p.a.) in dollars.
OTP Equity Fund
In April, the management of the OTP Equity Fund was focused on re-investment in short-term deposits at maximum rates, in particular, deposits in JSC Ukreximbank in the amount of UAH 0.87 million, JSC Ukrgasbank in the amount of UAH 0.87 million, and JSC Tascombank in the amount of UAH 0.87 million were reallocated.
The fall in shares of Raiffeisen Bank JSC and Centrenergo PJSC in April affected the fund’s performance in the reporting month – OTP Equity Fund decreased by 2.1%.
We continue to work. So let’s stay calm, believe in Ukraine and invest consciously!
