The State Treasury reported a 2020 central budget cash deficit of 5.3% of GDP (UAH 217bn  or $8.0bn) and consolidated budget cash deficit of 5.5% of GDP (UAH 224bn or $8.3bn).

WSE-listed IMC reported that Chairman of the Board Oleksandr Petrov purchased, on Jan. 25, a total of 13,250 shares in IMC (0.04% of shares outstanding) at a fixed price of PLN 19.04 per share, increasing his total shareholding, held via Richmarket Investments Ltd and Agrovalley Limited, to 26,437,463 (79.68%) shares.

The Economy Ministry and local grain exporters agreed a corn export cap for the 2020/21 marketing year (MY; July ’20-June ’21) of 24 Mt, with the possibility of revision based on final harvest data. The Ministry estimated the 2020 corn harvest at 30.3 Mt, down 16% y-o-y but one of the largest crops on record, allowing to export 24 Mt (-21% y-o-y).

Following an extended rally in 4Q20 and the first three weeks of 2021, Ukrainian equities faced profit-taking last week, especially in foreign exchanges.

We have upgraded our 2021 real GDP growth forecast by 0.7pp to 5.3% y-o-y, factoring in much stronger than expected economic activity in 4Q20, the mild impact of the January lockdown, and our assumption that the Ukrainian economy will enter a new growth trajectory.

With the IMF mission expected to finalize its work in Ukraine this week, rumors surfaced in local media about a potential 6-month extension of the current $5.0bn Stand-By Arrangement (SBA).

Industrial production (IP) in Ukraine fell by 5.2% y-o-y in 2020 following a 0.5% dip in 2019 and 3.0% growth in 2018. In December, IP rose by 4.8% y-o-y, rebounding from -0.3% in November. The State Statistics Service (SSS) estimated seasonally adjusted IP increased by 1.1% m-o-m in December following 1.5% growth in November and rose by 3.2% y-o-y vs. -0.1% in November on a calendar-adjusted basis.

The Eurasian Economic Commission’s (EAC) antidumping duty on imports of Interpipe-made rail wheels to the Customs Union expired on Friday, Jan. 22.

Ukraine seeks to extend its current 18-month $5.0bn Stand-By Arrangement (SBA) with the IMF by six months, until mid-2022, the local news site lb.ua wrote on Friday, citing unidentified sources. The article said that the government’s recent decision on temporary gas price regulation would make it difficult to reach a staff-level agreement with the ongoing IMF mission, which is expected to finalize its work this week, possibly as early as today. Removing the gas tariff cap would become one of the prior actions for the IMF Board’s approval of the next loan tranche expected at $0.7bn, along with steps on the anticorruption front and judicial reform, namely introducing more severe punishment for illicit enrichment and resolving the Constitutional Court issue. Also, the program may include additional structural benchmarks, such as amendments to the NBU law curtailing the powers of the NBU Council and banning secondary purchases of government bonds, creation of the Fiscal Investigation Service, and effectiveness of the tax and customs services.

WSE-listed Kernel Holding, Ukraine’s largest sunflower oil producer and one of the largest grain exporters, seeks to attract $80m of working capital financing from the EBRD in the form of participation in a syndicated senior secured revolving credit facility. The board date for the EBRD loan is Feb. 25.

Monthly indicators for October and November surprised on the upside, suggesting that economic activity further improved in 4Q20 following an already strong recovery in 3Q20.

The NBU left its discount rate unchanged at 6.0% p.a. for the fifth consecutive meeting, adhering to its earlier guidance and forecast. At the same time, the Bank revised its key rate forecasts for 2021-2023, projecting a 100bp hike this year, to 7.0% p.a. e-o-p, vs. +150bp to 7.5% assumed before, but forecasting that the higher rate will stay for longer, until mid-2023, compared with a gradual decline to 6.5% by end-2022 assumed in the previous forecast.

Growth in retail trade turnover in Ukraine accelerated to 13.4% y-o-y in December from 12.1% in November, bringing the 2020 tally to 8.4% y-o-y, below 10.5% in 2019 but up from 6.2% in 2018.

WSE-listed Kernel Holding, Ukraine’s largest sunflower oil producer and grain exporter, reported 2Q21FY (October-December 2020) operating results. Vegetable oil sales totaled 425 kt (+23% y-o-y), with the volume of oilseeds crushed rising 5% y-o-y to 1.0 Mt following the launch of a sunflower seed tolling operation with a third-party oilseed processing plant. Grain exports from Ukraine stood at 2.4 Mt over the period, up 6% y-o-y, with Kernel’s domestic export terminals handling an identical volume of crops (2.4 Mt, up 41% y-o-y), reflecting the addition of a new terminal (TransGrainTerminal). Company silos increased grain and oilseed crops intake by 17% y-o-y to 2.4 Mt. Kernel plans to publish its 2Q21FY financials on Feb. 26.

Interpipe published its operating results for December and 2020. Steel production rose 11% m-o-m and 8.2% y-o-y to 61.8 kt last month, bringing full-year output to 759 kt (-11% y-o-y). Monthly pipe production increased 2.5% m-o-m and 20% y-o-y to 38.4 kt, falling 21% y-o-y to 464 kt in 2020. Seamless pipe output rose 11% m-o-m and 21% y-o-y to 33.8 kt in December and dropped 20% y-o-y to 384 kt in 2020, while production of welded pipes fell 35% m-o-m and was up 10% y-o-y at 4.6 kt last month and down 25% y-o-y at 80.1 kt in 2020. In the rail product segment, December output totaled 16.5 kt (+28% m-o-m, -16% y-o-y), bringing 2020 production to 191 kt (-8.3% y-o-y).

Ukrainian banks reported combined net profit of UAH 43bn ($1.6bn) in 11M20, down 27% y-o-y. The sector-wide capital adequacy ratio (CAR) was reported at 21.6% in November, -0.1pp m-o-m and +2.0pp YTD.