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On Thursday, April 23, the NBU took up the baton of most central banks of the world to support the economy, and lowered the discount rate by 2 points from 10% to 8%. Low economic activity reduces the inflationary pressure, which allows the National Bank to pursue an aggressive policy to support the economy during the crisis without the fear of increase in prices. In addition, Ukraine is on the verge of receiving a huge tranche of financial assistance from the IMF at a low rate, which will partially close the budget deficit and stabilize the country’s financial system. This fact gives the NBU free rein and encourages the lowering of discount rate. Thus, before our eyes, a kind of “anti-crisis super-team” is being formed, which includes the Ministry of Finance with an anti-crisis budget, the NBU with a supportive monetary policy, and the IMF and the Western partners with massive financial assistance.

OTP Capital’s Heading: View on the current events Dear Investors and Depositors, traditionally, we publish our prompt messages regarding the vision of the current economic situation in the world and Ukraine, as well as the status of assets held in the portfolios of investment and pension funds managed by OTP Capital. What is happening in the world? The oil has broken china in the world markets. In particular, on Monday, the May futures price dropped below zero for the first time in history and hit a negative value of minus USD 37 per barrel. In fact, this has created a situation where the sellers pay extra to the buyers for the purchase of WTI oil. This is all due to the significant excess of supply over demand in the context of limited oil storage. That is, the lower demand and storage capacity have created a situation where it is more profitable for the sellers to pay for the storage than to suspend the wells. Currently, there are many viewpoints on the oil market ranging from minus USD 100 per barrel to the quick situation stabilization. In any case, the oil market is critical to the economic health of many countries, and the negative values make no joy. What is happening in Ukraine? Ukraine’s movement towards the IMF continues. A new obstacle in the form of 16 thousand amendments to the Law No. 2571-д “On the Improvement of Some Mechanisms of Banking Regulation” (the so-called “antikolomoiskyi” law) is overcomed by the Parliament by the amendment to the regulation and combining such amendments into separate groups. This will allow voting not on separate amendments but groupwise, which will significantly shorten the time of elaboration of this law.

OTP Capital column: View on the current events Dear investors and depositors! We continue to publish the prompt notices regarding the current economic situation in the world and Ukraine, as well as the status of assets held by OTP Capital’s investment and pension funds’ portfolios. What is happening in the world? There is an optimistic spirit in the world markets. The greatest attention is focused on the coronavirus situation, where there are positive trends, because the dynamics of all key indicators of the pandemic are improving. Oil market stabilization is also expected. As a result of the Conference held on April 12, 23 countries have pledged to collectively limit the oil production to record 9.7 million barrels per day. The reduced production will lead to the stabilization of the oil prices. The stock market starts the reporting period for the first quarter. The actual results of the crisis will appear there. In the global stock market, the analysts’ positive expectations are prevailing. In particular, the average analyst forecast states that the key US S&P500 index for the next year will increase by more than 17%.

Dear members of OTP Pension fund! We understand your concern about the results of the fund in March. And we want to comment on the situation and explain why the fund’s assets “demonstrated a minus”. Therefore, we provided short answers to your main questions. My account balance has decreased. What is the matter? The matter is that the revaluation of bonds which occupy 43% of the fund’s assets. Will I lose this money? No, the assets are decreased now, but the yield on them have increased. That is, your assets are increasing at a faster rate, because they are currently operating not at 11%, but at 19% per annum. Correspondingly, everything will return to its usual state, either from a reverse revaluation (when the rates will decrease again) or from the redemption of G-bonds (if we hold the bonds to the redemption, we will get an expected yield).

OTP Capital Column: View on the current events Dear investors and depositors of investment and pension funds managed by OTP Capital. We continue to publish prompt messages regarding the vision of the current economic situation in the world and Ukraine, as well as the status of assets that are under our management.