Dear Investors,
We are pleased to present a review of the results of the mutual investment funds managed by OTP Capital for August 2024..
GENERAL ECONOMIC SITUATION IN UKRAINE
Last month, the Ukrainian financial market continued to demonstrate stability despite the economic challenges.
The official exchange rate of the hryvnia slightly strengthened from 41.12 UAH/USD to 41.03 UAH/USD, while the cash rate remained almost unchanged at 41.45 UAH/USD.
Hryvnia Investments
Interest rates on government bonds (OVDP) at primary auctions, denominated in hryvnia, remained stable throughout August:
- 14.6% for OVDP with a term of up to 1 year
- 15.4% for OVDP with a term of up to 2 years
- 16.5% for OVDP with a term of up to 3 years
Interest rates on term deposits found their equilibrium at 8%-12.5%, indicating stability in the bank deposit sector.
Foreign Currency Investments
⇒ OVDP: The Ministry of Finance did not issue foreign currency-denominated OVDPs in August. On the secondary market, yields on foreign currency OVDPs remained at 4% for dollar-denominated bonds and 2.75% for euro-denominated bonds. These figures reflect the relative stability in demand for Ukrainian eurobonds.
⇒ Eurobonds (OZDP): In August, the Ministry of Finance of Ukraine successfully restructured the country’s external sovereign bonds (OZDP). The government received support from over 97% of eurobond holders, reducing the national debt by $11.4 billion. This was achieved through a nominal write-down, reduced coupon payments, and an extension of debt maturity from 2024-2035 to 2029-2036.
As a result, eurobond prices rose from 1.5% to 6% in early August, positively impacting foreign currency investments. However, by the 28th, OZDPs were frozen in clearing systems pending an exchange that will conclude in early September.
RESULTS OF FUNDS UNDER “OTP CAPITAL” MANAGEMENT
In August, the fund sold bonds worth UAH 2.1 million and placed UAH 10.5 million in deposits with Agroprosperis Bank. These actions allowed the fund to achieve a 1% return for the month. Over the past 365 days, the fund generated a 17.2% annual return.
The fund did not actively manage its assets in August but still generated a 0.9% return for its participants in the past month. Over the past 365 days, the fund has produced a significant 19.2% annual return, reflecting the market’s stability.
No portfolio asset transactions took place during the reporting month. As a result, the fund posted a -0.3% return for the month. Over the past 365 days, the fund has generated an 8.8% annual return in U.S. dollars.
The fund continued to manage its assets, focusing on short-term deposits in various banks, yielding a 0.6% return for the month. Over the past 365 days, the fund has generated a 15.2% annual return.
SUMMARY
August 2024 was a month of stability for the investment funds under OTP Capital management. Despite the lack of significant market changes, the funds managed to preserve and even grow their investors’ capital. We continue to closely monitor market conditions and work to improve returns for our clients.
Thank you for your trust, and we wish you successful investments!
