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Unemployment rate rises to 9.9% in 2Q20, below expectations
Ukraine’s unemployment rate (under ILO methodology) increased to 9.9% in 2Q20 from 8.6% in 1Q20 and 7.8% in 2Q19. The number of unemployed rose 21% y-o-y (or 0.3 million people) to 1.7 million people in 2Q20 (+11% q-o-q), while the country’s total labor force (aged 15-70) slid 4.3% y-o-y or 0.8 million to 17.3 million (-3.9% q-o-q).
NBU deputy governor comments on IMF, F/X policy
NBU Deputy Governor Dmytro Sologub said the next IMF tranche would be linked to the 2021 budget and could be disbursed in November. He also stressed that the NBU’s F/X policy has not changed, with temporary deviations in the Bank’s approach to F/X interventions being caused by rotations in the respective department.
Banking sector recovery slows in August, profits down 26% y-o-y in 8M20
The domestic banking sector generated total revenues of UAH 20bn ($0.7bn) in August, down 1.9% m-o-m and 16% y-o-y, bringing 8M20 revenues to UAH 169bn ($6.4bn), still up from UAH 165bn in 8M19. Banks booked combined net income of UAH 4.3bn ($0.2bn) for the month, marginally down from UAH 4.6bn in July and substantially below UAH 7.6bn in August 2019. The sector’s CAR stood at 21.4% as of end-August, marginally down from 21.9% at end-1H20 but up from 19.7% as of end-2019. ROE totaled 23.8% in 8M20 vs. 22.9% in 1H20 and a high of 45.6% in February, before the coronavirus lockdown.
IP deteriorates to -5.3% y-o-y in August from -4.2% in July
Industrial production (IP) in Ukraine fell 5.3% y-o-y in August following a drop of 4.2% in July, bringing the 8M20 tally to -7.4% y-o-y (vs. -7.7% in 7M20 and +1.4% in 8M19). The State Statistics Service (SSS) estimated seasonally adjusted IP inched down 0.1% m-o-m in August after a 1.4% increase in July and was down 4.2% y-o-y (vs. -4.4% in July) on a calendar-adjusted basis.
Ukreximbank – Gov’t approves UAH 6.8bn recapitalization
The Cabinet of Ministers approved a UAH 6.8bn ($0.24bn) equity injection for state-owned Ukreximbank, to be provided in the form of 15-year T-bonds paying 9.3% p.a.
Oschadbank — NBU approves new CEO
The NBU approved the appointment of Serhiy Naumov as the new CEO of state-owned Oschadbank, replacing Andriy Pyshny, after a local court overturned a lawsuit that had suspended the process.
Naftogaz — Reports weak 1H20 financials
Naftogaz published unaudited 1H20 financial results, reporting sales of $2.8bn (-18% y-o-y), negative EBITDA of $67m (vs +$1.1bn in 1H19) and a net loss of $444m (vs $655m net income in 1H19). The company reported a 67% drop in net operating cash flow, to $600m, investment cash outflow of $333m (vs. $494m in 1H19), and financing cash outflow of $1.6bn (+70% y-o-y).
MinFin sells UAH 0.3bn of hryvnia debt, yields inching higher
The Finance Ministry sold UAH 0.3bn of hryvnia-denominated bonds at an auction yesterday (down from UAH 2.9bn last week), including UAH 0.1bn each of 3-month and 12-month paper at 7.0% (unchanged from Aug. 25) and 9.46% p.a. (+18bp from two weeks ago), respectively, and UAH 30m of 3-year bonds at 10.5% p.a. (+4bp from two weeks ago).
Sequential recovery in passenger and cargo transportation continues in August, still -55% and -17% y-o-y in 8M20
Passenger transportation turnover fell 55% y-o-y in 8M20, virtually in line with the 7M20 record, while cargo transportation fell 17% y-o-y over the period, marginally improving on -19% in 7M20.
EUR 1.2bn MFA hinges on cooperation with IMF and rule of law — top EU diplomat
The EU stands ready to provide EUR 1.2bn of macro-financial assistance (MFA) to Ukraine, provided that the country “constructively engages” with the IMF and “meets the rule of law conditions attached to this support,” EU High Representative for Foreign Affairs Josep Borrell said yesterday during his visit to Kyiv.
Interpipe — Reports 1H20 results
Interpipe posted its 1H20 financial results reporting revenues of $468m (-16% y-o-y) with pipes revenues of $231m (-36%), revenues from wheels segment of $216m (+23% y-o-y) and steel segment external revenues of $15m (+32%). The EBITDA increased by 19% y-o-y, to $149m with wheels segment contributing $111m (+84% y-o-y), pipe segment contribution to EBITDA was negative $2.2m (vs. positive $45m in 1H19). The steel segment EBITDA doubled to $40m. The company’s net profit stood at $116m vs. net loss of $25m in 1H19, implying EBITDA margin of 32% (+9pp) and net margin of 25% (+29pp).
Retail trade up 8.7% y-o-y in August, recovers to pre-crisis level
Growth in Ukraine’s retail trade turnover accelerated to 8.7% y-o-y in August from 8.5% in July, bringing the 8M20 tally to +6.0% y-o-y, up from +4.2% in 7M20. At the same time, the Consumer Confidence Index rose 1.8 points m-o-m in August, to 68.5 (on 0-200 scale), following a similar increase in July, still remaining 13 points below the February level and 27 points below the October 2019 peak.
Politics – Ruling party support hits record low
According to a Sep. 12-16 poll by Kyiv International Institute of Sociology, the ruling Servant of the People party’s electoral rating stood at 21.5% as a share of decided voters, followed by former president Petro Poroshenko’s European Solidarity on 17.8% and pro-Russian Opposition Platform on 16.3%.
Ukraine asks IMF to start online mission
Prime Minister Denys Shmygal held an online meeting with IMF European Department Director Alfred Kammer, saying that Ukraine sent a letter to IMF Managing Director Kristalina Georgieva with a request to start an online mission.
Agricultural production down 5.5% y o-y in August
Agricultural production in Ukraine fell 5.5% y-o-y in August (vs. -5.8% in July and bringing the 8M20 tally to -9.8% y-o-y), driven by the crop farming subsector (domestic agricultural production statistics incorporate the plant-growing subsector starting from June each year, with the beginning of the harvesting season).
DTEK — Receives injunction in connection with $45m payment to Sberbank
DTEK Energy B.V. received an injunction from the District Court of Amsterdam dated September 18, 2020, which was levied over the share capital of the company’s sole Dutch subsidiary, current and future monies, receivables and other assets held for or owing to the company by its affiliates (including DTEK Oil & Gas) and certain other third parties. The injunction prohibits the payment of receivables to the company, disposal of or receiving dividends, but does not affect the company’s ability to conduct business or negotiate the terms of its ongoing restructuring.
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