Naftogaz CEO Oleksiy Chernyshov invited foreign gas traders to inject natural gas into Naftogaz’s underground gas storage (UGS), offering up to 10 bcm of capacity. In 2023, foreign traders injected close to 2.5 bcm and Naftogaz hopes to increase 2024 injections to 4 bcm. Chernyshov said the recent Russian aerial attacks on Naftogaz storage sites were an attempt to scare off foreign traders.

Ukrainian corporates returned 12.1% in 1Q24 based on the CEMBI Broad Index, with solid growth of 7.3% m-o-m in January and 5.5% in February followed by a 1.0% correction in March as the market shifted to profit-taking after Russia resumed its mass missile and drone strikes against Ukrainian energy assets on Mar. 22.

NBU gross foreign reserves jumped by 18% or $6.7bn m-o-m in March, hitting a new all-time high of $43.8bn (+8.0% YTD). The end-March tally was equivalent to 5.8 months of prospective goods and services imports, according to central bank estimates. The official exchange rate of the hryvnia to the US dollar weakened by 2.6% m-o-m to UAH 39.22:USD on top of -0.9% in February, bringing the rate of YTD depreciation to -3.2%.

According to Infrastructure Minister Oleksandr Kubrakov, Ukraine has exported around 36 Mt of commodities via three of its Black Sea ports since opening them in August, including 25 Mt of agricultural produce. Separately, Ukraine has resumed container shipping via the Odesa Black Sea ports. According to local media, the first container vessel moored at the port of Chornomorsk on Apr. 3 and successfully docked at Constanta (Romania) on Apr. 5.

DTEK CEO Maksym Tymchenko said DTEK Energy aimed to restore at least 50% of its power generating capacity damaged by recent Russian attacks within the next three to four months. The company is working closely with the Ukrainian Energy Ministry and its partners and donors to replace or repair the damaged units. Tymchenko estimated repair costs at $230m, with DTEK to cover almost half of this amount while seeking support from donors.

Russian assaults remain concentrated around Bakhmut and Avdiyivka in Donetsk region, with further small gains; the rest of the front remains much less active

Ukraine exported 5.6 Mt of grain and oilseeds in March, the ninth month of the marketing year (MY) 2023/24 (July 2023 – June 2024), down 13% m-o-m and 12% y‑o‑y. Grain exports totaled 5.2 Mt, down 11% m-o-m and 9.2% y-o-y, while oilseed exports stood at 436 kt (-26% m-o-m, -35% y-o-y). March sunflower oil exports were reported at 606 kt (+0.8% m-o-m, +16% y-o-y).

Moody’s Investors Service affirmed its corporate family rating (CFR) on Metinvest at Caa3, changing the rating outlook from negative to stable. The agency said its assessment assumed continuous positive free cash flow in 2024, enabling Metinvest to build up a larger cash balance for ongoing debt servicing and repayment of the 2025 bond. The company’s rating, one notch above the sovereign, remained constrained by Ukraine’s rating of Ca (stable outlook).

Ukraine received $8.9bn of foreign aid last month, all this amount being loans and including EUR 4.5bn of bridge financing from the EU (part of a EUR 50bn 4-year Ukraine Facility program), $1.5bn from Canada, $1.1bn and $0.5bn from Japan and the UK via the World Bank, and $0.9bn from the IMF, the fourth tranche of a $15.4bn EFF program.

The Finance Ministry reported the central budget’s provisional cash deficit at UAH 104bn ($2.7bn) in March.

The National Bank’s PMI-type index of business activity expectations rose by 4.5 points m-o-m in March, to 52.0 on a 0-100 scale, up 2.5pt y-o-y.

State rail monopoly Ukrainian Railways (RAILUA) reported freight transportation of 16 Mt in March, up 10% m-o-m and 31% y-o-y and a new wartime high.

President Volodymyr Zelensky has signed into law two bills intended to step up and expand prospective mobilization. One of the bills lowers the conscription age from 27 to 25. The other accelerates the completion and launch of a previously created online registry of those eligible for military service with the aim of providing the military with up-to-date information about people who can be drafted and their qualifications.

The Russian offensive that began last October and has since achieved only minor territorial gains appears to be running out of steam. The intensity of fighting, based on reported combat engagements, dropped by the end of March to levels seen in early January. The rate of Russian personnel losses claimed by the Ukrainian military has also gone down in recent weeks, pointing to Russian “meat wave” attacks subsiding but by no means stopping.

Ukraine’s headline current account (C/A) deficit narrowed to $0.1bn in February from $0.5bn gap in January, while the financial and capital account (F/A) deficit, including IMF funds, stood at $1.3bn, flat m-o-m.

Russia continued its attacks on the Ukrainian energy system, launching another mass strike on Mar. 29 that included 60 suicide drones and 39 missiles (25 cruise missiles, 9 guided missiles, 3 Kinzhal hypersonic missiles, and two Iskander ballistic missiles). The Ukrainian military reported intercepting 58 drones and 26 missiles. Russia followed with a smaller strike on Mar. 31, launching 15 missiles and 11 drones, of which 18 were shot down. Ukrainian authorities reported that thermal power plants in the central and western regions were damaged along with hydroelectric power plants in central Ukraine. The attack also targeted power transmission system operator Ukrenergo’s high voltage substations powering industrial consumers in the east and struck Naftogaz’s underground gas storage facility in western Ukraine.