Business news from Ukraine

China will use its spacecraft to collect rocks and soil from moon’s back side

China on Friday launched an automated spacecraft on a nearly two-month mission to collect rocks and soil from the moon’s back side, becoming the first country to undertake such an ambitious endeavor, Reuters reported. China’s largest rocket, Long March-5, launched at 17:27 Beijing time (12:27 Kiev time) from the Wenchang spaceport on the southern island of Hainan with the Chang’e-6 probe weighing more than 8 tons.

Chang’e-6’s mission is to land in the South Pole-Eitken basin on the back side of the moon, which is eternally facing away from Earth, after which it will retrieve and return samples.

The launch was another milestone in China’s lunar and space exploration program.

“It remains a mystery to us how China was able to develop such an ambitious and successful program in such a short time,” said Pierre-Yves Meslain, a French researcher working on one of the Chang’e-6 mission’s scientific objectives.

In 2018, Chang’e-4 made the first unmanned landing on the back side of the moon. In 2020, Chang’e-5 delivered lunar samples for the first time in 44 years, and Chang’e-6 could make China the first country to get samples from the “hidden” side of the moon.

Earlier, the launch of the Quequiao-2 transponder satellite, designed to link China’s lunar landers with ground stations, was reported.

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CRH has invested $80 mln in Ukraine during war

The CRH Group, the largest manufacturer of building materials in North America and Europe, has invested $80 million in Ukraine during the full-scale invasion.

According to Guillaume Cavalier, President of CRH in Central and Eastern Europe, in an interview with Forbes Ukraine, the group’s total investments in Ukraine over 25 years of operation amount to more than $500 million.

According to him, it is important to use locally produced cement in the context of infrastructure reconstruction in Ukraine, which will provide jobs and higher revenues to the state budget.

Cavalier emphasized that for the potential growth of the Ukrainian cement market after joining the EU, it is important to invest in the expansion of production now. He reminded that the Antimonopoly Committee of Ukraine (AMCU) is currently considering CRH’s application to acquire the assets of Italian Buzzi in Ukraine – Volyn-Cement (Zdolbuniv, Rivne region) and Yugcement (Olshanske, Mykolaiv region).

As reported, on January 23, the AMCU announced the commencement of consideration of the case on concerted actions in the form of implementation of non-competition provisions enshrined in the concentration agreement between the Irish CRH group and Dyckerhoff GmbH, which own assets in Ukraine.

In June 2023, the Italian cement producer Buzzi, listed by the National Agency for the Prevention of Corruption as an international war sponsor, through its subsidiary Dyckerhoff GmbH, reached an agreement to sell part of its Eastern European business to the Irish CRH Group, including its Ukrainian assets in the form of two cement plants. The deal is expected to close in 2024.

Later, in September 2023, the AMC returned CRH’s merger filing without consideration due to non-compliance with the requirements, and noted that the group holds about a third of the Ukrainian cement market. In October of the same year, the agency resumed consideration of the case.

CRH has been operating in Ukraine since 1999. Since November 2021, its cement enterprises in Ukraine have been operating under the Cemark brand: Podilskyi Cement JSC (Khmelnytskyi region), Cement LLC (Odesa), and Mykolaivcement PrJSC (Lviv region).

CRH’s separate business in Ukraine is the production of concrete and reinforced concrete products. PoliBeton Energo’s Bila Tserkva concrete goods plant is a specialized enterprise that produces power transmission towers. PoliBeton’s concrete hub in the north of Odesa joined CRH in 2020.

CRH is the world’s leading manufacturer of building materials. The company employs around 71,000 people at its 3,200 sites in 28 countries. It is the largest manufacturer of building materials in North America and Europe. The company is also represented in Asia. CRH American depositary shares are listed on the New York Stock Exchange.

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National Bank estimates Ukraine’s GDP growth in first quarter at 3.1%

The National Bank of Ukraine has estimated Ukraine’s real gross domestic product (GDP) growth in the first quarter of 2024 by the same period last year at 3.1%, while in January it forecast it at 7.1%.

“Real GDP growth in the first quarter of 2024, according to NBU estimates, was weaker than expected, primarily due to restrained budget expenditures amid uncertainty about the receipt of external financing. An additional factor was the blockade of the western border, which restrained the activity of certain types of activities,” the National Bank explained in the Inflation Report published on its website.

At the same time, as the NBU pointed out, stable operation of the sea corridor, favorable weather and increased domestic demand supported economic growth. The central bank added that fiscal policy remained accommodative and, together with the effect of a significant increase in fiscal spending at the end of 2023, significantly fueled aggregate demand.

Earlier, in late April, the Economy Ministry estimated Ukraine’s GDP growth at 4.5% in the first quarter of this year.

As the National Bank notes, moderate GDP growth rates will remain until the end of 2024. “The main factors of growth will remain the preservation of soft fiscal policy, revitalization of external demand, as well as further adjustment of business and population to the conditions of significant security threats. However, the pace of economic growth will slow given the impact of the war and the depletion of growth momentum from the low base of 2022,” the NBI pointed out.

It added that the recovery will also be constrained by the impact of the destruction of energy infrastructure.

According to the updated forecasts, GDP growth will accelerate to 3.7% in the second quarter (the NBU expected it at 4.8% in January) before slowing to 1.3% (1.7%) in the third quarter and accelerating again to 4.1% (2.0%) in the fourth quarter.

Overall, for 2024, the NBU worsened its growth forecast for the Ukrainian economy to 3% from 3.6% in its January report, and for 2025 to 5.3% from 5.8%.

“The negative contribution of revised estimates of the e/e deficit to the change in real GDP in 2024 is estimated at 0.6 percentage points (pp), and 0.5 pp in 2025. Instead, the impact on GDP of a smaller grain harvest in 2024 will be insignificant due to the reorientation of agricultural producers to more marginal crops, particularly oilseeds,” the central bank said.

According to the regulator, the balance of risks of the baseline forecast is shifted towards deterioration of Ukraine’s economic growth rates and increased price pressure.

The National Bank in the updated Inflation Report increased the number of key risks of the forecast (with a strong impact and probability of 25-50%) to three: to the risk of a longer period and intensity of the war added the risk of large budgetary needs (a quarter earlier the NBU estimated its probability at 15-25%) and large damage to energy and port infrastructure (a quarter earlier the impact of this risk the central bank considered moderate).

At the same time, the probability of the risk of reduction of volumes and loss of rhythm of international aid receipts and continuation of partial blocking of cargo traffic across the border by some EU countries was reduced from 25-50% to 15-25%, but the degree of impact of the latter risk was increased from weak to moderate.

In addition, the NBU added a new risk – aggravation of the situation in the Red Sea, but estimated its probability at 15-25% and the degree of influence as low, as well as excluded the risk of increasing the capacity of maritime export routes, which is positive for the forecast.

Earlier Experts Club analytical center and Maxim Urakin released a video analysis of how the GDP of the world’s countries has changed in recent years, more detailed video analysis is available here – https://youtu.be/w5fF_GYyrIc?si=BsZmIUERHSBJrO_3 Subscribe to Experts Club YouTube channel here – https://www.youtube.com/@ExpertsClub.

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Law enforcers detain head of State Enterprise “Administration of River Ports”

Law enforcement officers detained the head of the State Enterprise “Administration of River Ports” on suspicion of receiving an undue benefit of $8.5 thousand for permission to place recreation facilities on berths in Kyiv region, the press service of the Ministry of Community Development, Territories and Infrastructure reports.

“According to law enforcement agencies, yesterday the head of the State Enterprise “Administration of River Ports” was detained for receiving an undue benefit of $8.5 thousand for concluding a contract for the operation of hydraulic structures (berths) in the Kyiv region for the organization of recreation facilities and placement of small architectural forms,” the ministry said in a Facebook post on Friday.

It is noted that he is suspected under Part 3 of Article 368 of the Criminal Code of Ukraine. The issue of choosing a preventive measure is being decided.

“The Ministry emphasizes zero tolerance for corruption of officials, is interested in an objective investigation and assists law enforcement agencies in establishing the truth in every possible way,” the statement said.

The report does not specify the name of the detainee. The River Ports Authority has been headed by Oleksandr Kozlovsky since July 10, 2020.

In Kiev tomorrow up to 20 ° warm, on Monday rain and thunderstorms

On Sunday, May 5, most of Ukraine will be sunny and dry, only in the northern part, in Transcarpathia and the Carpathians in the afternoon in some places a little short-term rain, thunderstorms, according to Ukrhydrometcenter. The wind is north-eastern with a transition to south-western, 5-10 m/s.

The temperature at night is 3-8° of heat (in the eastern, Dnipropetrovsk, Zaporizhzhya and Kherson regions 1-6° of heat, frost 0-3° on the soil surface); during the day 17-22° of heat, in the western regions up to 25°.

In Kiev on May 5, there will be no precipitation at night and light rain in places during the day. The wind is northeastern with a transition to southwestern, 5-10 m/s. The temperature at night is 6-8°, during the day about 20°.

According to the Central Geophysical Observatory named after Boris Sreznevsky. Borys Sreznevsky in Kiev on May 5, the highest daytime temperature was 30.2° in 2018, the lowest nighttime temperature was -0.7° in 1908.

On Monday, May 6, in Ukraine, except for the southern part, small short-term rains in places, thunderstorms in some areas, hail in some areas.

The wind is south-western with transition to north-western, 7-12 m/s, in the afternoon gusts of 15-20 m/s in some places. The temperature at night 10-15°, in the south and east of the country 6-11°; in the daytime 20-25°.

In Kiev on Monday is expected in places light, short-term rain, thunderstorms. The wind is southwesterly with transition to northwesterly, 7-12 m/s. The temperature at night is 12-14°; during the day 22-24°.

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NBU announces implementation of largest package of easing of currency restrictions

The National Bank of Ukraine says it is implementing the largest package of easing currency restrictions for businesses since the start of the full-scale war to improve the conditions for doing business in Ukraine and the entry of domestic businesses into new markets, as well as supporting economic recovery and facilitating the inflow of new investment into the country.

“First, all currency restrictions on imports of works and services are abolished. Second, the ability of businesses to repatriate ‘new’ dividends is ensured. Third, the possibility to transfer funds abroad on leasing/renting is provided,” the NBU said in a press release on Friday evening.

“Fourth, restrictions in terms of repayment of new external loans are relaxed. Fifth, the possibility to repay interest on ‘old’ external loans is provided. Sixth, restrictions in terms of transferring foreign currency from representative offices in favor of their parent companies are relaxed,” the regulator added.

It is specified that these and a number of other technical changes were introduced by the NBU Board Resolution No. 56 of May 3, 2024 to the so-called “military” Resolution No. 18 of February 24, 2022. The vast majority of the document’s provisions come into force from May 4, 2024, and only in terms of repatriation of new dividends – from May 13, 2024.

The regulator believes that this will support Ukrainian producers and provide them with the opportunity to enter foreign markets, which in turn will contribute to a gradual increase in export revenues.

It is indicated that repatriation of dividends by businesses will be allowed only for dividends accrued based on performance after January 1, 2024.

“This relaxation does not apply to the payment of dividends at the expense of retained earnings for previous periods or reserve capital,” emphasized the National Bank.

In addition, the regulator set a monthly limit for repatriation of “new” dividends at EUR1 million equivalent in order to minimize risks to macro-financial stability. It is noted that control over compliance with this norm will be ensured thanks to the NBU’s automated information system “E-limits”.

“Providing an opportunity to repatriate “new” dividends will contribute to the inflow of new investments in Ukraine, minimize the risks of curtailing the activities of enterprises with foreign capital and support the economy,” the National Bank believes.

As for the easing of restrictions on servicing and repayment of “new” foreign loans and repayment of “old”, the NBU has reduced the minimum period of use of the loan, the funds for which come from abroad after June 20, 2023 on the accounts of residents, from three to one year, when reaching which it is allowed to buy foreign currency for its repayment. Thus, the ban on the purchase of foreign currency for repayment of “new” loans will apply to loans for up to one year.

In addition, the NBU will allow businesses, regardless of the period of use of “new” loans to buy foreign currency to pay interest on them.

“All this will contribute to increasing opportunities for Ukrainian businesses to attract new external loans not only from official partners, but also from private investors,” the release said.

Moreover, according to it, resident borrowers will be able to make transfers in foreign currency to repay interest on “old” external loans, which, according to the terms of the agreement, are payable from February 24, 2022. However, under one loan agreement for interest payments overdue as of May 1, 2024, borrowers will be able to transfer no more than 1EUR million equivalent per calendar quarter.

Also, according to the release, legal entities and individual entrepreneurs will be able to transfer funds abroad for settlements under leasing or rental contracts without additional restrictions on the subject of such a contract, as well as the date of its conclusion.

The National Bank reminded that previously such permission was only for leasing or renting vehicles.
Regarding the permission for representative offices of foreign companies to transfer foreign currency to the accounts of parent companies, it is specified that the central bank will allow international card payment systems and foreign airlines to buy and transfer foreign currency abroad to the account of a non-resident legal entity, but for such operations will be set a monthly limit of EUR5 million in equivalent.

According to the regulator, this will contribute to further development of cashless settlements in Ukraine.

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