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					                  London, May 23 2006




Russia’s Capital Market:
 Today and Tomorrow




          Alexei Rybnikov
               CEO
       MICEX Stock Exchange
             Domestic Capital Market in Figures

   In 2005 MICEX Stock             The turnover of the Russian exchanges
    Exchange’s share in the                 in 2003-2006, bln USD
    Russian     stock    market
    turnover reached more than                                       Jan-Apr
    85%                                      2003    2004    2005
                                                                      2006
   Volume of transactions in
    2005 reached 225,6 bln USD    MICEX SE   99.1    151.2   225.6    164.4
    (+49,2% over 2004)
                                  RTS        13.3    26.1     38      33.1
   Volume of transactions in
    January-April 2006 reached
    164,1 bln USD, which is 3
    times more than in January-
    April 2005
MICEX Stock Exchange Liquidity Growth (Average
               Daily Turnover)
                        Cash Equities Market

   290 equities of 184 issuers traded
   50 equities of 33 issuers listed,
    including RAO UES, LUKoil,
    Rostelecom and Sberbank
   Cash equities turnover reached 141,8
    bln USD in 2005 (+30,6% over 2004)
   Cash equities turnover in January-April
    2006 reached 120,4 bln USD, which is
    3,7 times more than in January-April
    2005
   MICEX Index is currently at 1143,76
    (May 22, 2006): +13,1% from the
    beginning of 2006
                  Equities Market Capitalization

   Equities market capitalization
    grew 73% during 2005 to 258,6
    bln USD
   Equities market capitalization
    grew 2,6 times to 709,58 bln
    USD in January-April 2006
   The most capitalized companies
    are (as of 19 May 2006)
       Gazprom – 249,24 bln USD
       Lukoil – 66,76 bln USD
       Surgutneftegaz – 58,23 bln
        USD
MICEX Stock Exchange: Trading in Gazprom Stock
            Corporate and Regional Bond Market

   400 bonds of 276 issuers traded
   115 bonds of 65 issuers listed
   Trading volume reached 83,8 bln
    USD in 2005, which is two times
    more than in 2004
   Trading volume reached
    44 bln USD in January-April 2006,
    which is 2 times more than in
    January-April 2005
               Corporate Bonds: Primary Market

   In 2005 144 corporate bond issues
    were placed on MICEX SE for the
    total amount of 9,14 bln. USD
   In January–April 2006 58 corporate
    bond issues were placed on
    MICEX SE for the total amount of
    4,21 bln. USD
   The biggest companies in 2005 by
    bond volume placement are:
        Russian Railways — 0,89 bln.
         USD
        VTB — 0,54 bln. USD
        Federal Grid Company of
         Unified Energy System — 0,5
         bln. USD
                 Regional Bonds: Primary Market

   In 2005 24 regional bond issues
    were placed on MICEX SE for the
    total amount of 3,17 bln. USD
    (including City of Moscow )
   In January–April 2006 6 regional
    bond issues were placed on
    MICEX SE for the total amount of
    1,19 bln. USD (including City of
    Moscow )
   The biggest regions in 2005 by
    bond volume placement are:
        City of Moscow — 0,67 bln USD
        Moscow Region – 0,43 bln. USD
        Krasnoyarsk Territory – 0,11 bln.
         USD
                     Exchange Traded Funds


   74 exchange traded funds
    trade on MICEX SE
   ETF trading volume reached
    29,5 mln. USD in January-
    April 2006, which is 18 times
    more than in January-April
    2005
                      Trading Members and Clients

                           Investors

                 December      July 1,   January   May 1,
                  30, 2004      2005     1, 2006   2006

Total            117 382       106 969   134 440   166 078

Legal Entities    20 066       17 622    19 069    20 973
Private
                  96 529       84 523    109 714   138 673
investors
Non-residents      787           957      1 145     1 345
Institutional
                                3 867     4 512     5 123
Investors
      MICEX Stock Exchange: Issuers at a Glance


              Issuers on MICEX SE

             January   January January May 1,
             1, 2004   1, 2005 1, 2006 2006
Total
number of     225       241      385    475*
issuers
Issuers of
               91        81      161    184
equities
Issuers of
              152       179      245    276
bonds

*including ETF and Eurobonds of RF
                       2005-06 Projects


   Launching MICEX Stock Exchange
   Implementation of corporate governance standards
   Market participants matter
      MICEX  SE Council
      Stock Market Committee, IT Committee
      Index Committee
                    2005-06 Projects (continued)

   Modified Bond REPO
      Ability to conclude a REPO deal without coverage control for the first leg of REPO
       transaction
      Ability to conclude an intraday REPO deal with execution at the same settlement
       date
      Extended REPO terms up to 180 calendar days and also out of coupon term
      New fees
   New rules for clearing and settlement
      Mechanism of Margin Calls for REPO deals
      Early execution of trades with settlement codes В01-В30
      Bilateral netting for trades with settlement codes В01-В30, REPO deals and Margin
       calls
      Intraday clearing session
   Development and promotion of MICEX Indexes
      New stocks in MICEX Index as of 14/03/06 (Gazprom, MTS, Transneft)
      Changes in MICEX Index methodology
                 2005-06 Projects (continued)

   Market-makers and margin trading
      Market-makers   re-launched at MICEX Stock Exchange on November 10,
       2005
      13 Market-makers cover 16 bonds
   IPO sector development
      MICEX  facilitated 3 IPOs for Russian companies in 2005: IPO of ―PAVA‖,
       ―Lebedyansky‖, and SPO for ―Severstal-auto‖
      Total amount of 2005 IPOs was 288,5 mln USD
   Gasprom stock trading started (January 2006)
   International Financial Organizations sector development
           The Pipeline: New Equities REPO

   New features:
       Market price discounting for REPO transactions
       Margin calls for REPO
       Ability to conclude deals conclusion without coverage control for the
        first leg of REPO transaction
       Increased term or REPO deals up to 180 days
       New fees
       Implementation started 22/05/06 (marketing period)
             The Pipeline: New Technologies


   Extensive technological agenda:
       PIX technology
       Joint user testing
       Remote workplaces
       Fast warning system
   User role (IT Committee)
           The Pipeline: Our Contribution to IPOs

 Innovative and Growing Companies Sector development
       Growth of number of issuers on MICEX SE
       Growth of number of the stocks with better liquidity
       Leads to development of wider IPO market
   Market-makers and specialists institution creation
       Creation of additional mechanism to support stock liquidity
       Market stabilization for selected stocks
       Additional benefits for IPOs on MICEX Stock Exchange
   Marketing activity
       Working with issuers and their financial advisors
       Cooperation with the LSE (Co-marketing agreement)
          Introduction of Specialists

                          Specialist:
Market participants
                               Stock      exchange     member
                                nominated by the issuer can sign
                                a contract with the Exchange to
                                support market of low-liquidity
                                issues and mutual funds
                               Specialists    will   have    an
       Specialists              exclusive right to announce and
                                maintain quotes
                          Specialist vs market-maker:
                               Specialist is nominated by the
                                issuer
       Market-makers           Specialist can maintain quote for
                                own and client account
                   Specialists (continued)

                            «Specialist List» include stocks that specialists
Liquid stocks                can trade
                            Selection for the «List» is based on liquidity
                             criteria:


                            Where Fi – criteria of liquidity:
 Admitted stocks               Number of trade days;
                               Number of trades;
                               Volume of trades;
                               Number of the market participants
 «Specialist List»                involved in trading.
                            «Specialist List» is reviewed every 6 months
                            Specialist is obliged to support bid-ask quotes
                             within the spread
                            Specialist has an exclusive right for making
                             market, getting special fee rates and unique
  «Stocks of the             ability to promote securities
   specialists»
                      Specialists (continued)

   New admission and trading rules approved by FFSM
   Preliminary list of securities quoted by specialists worked out: 76
    stocks selected
   Information sent to trading participants and issuers
   Special web page created
New Sector for Innovative and Growing Companies

    Creation of Innovative and Growing Companies (IGC) Sector on
     MICEX Stock Exchange
    Main criteria of the IGC Sector:
        Less strict listing requirements (period of existence, shareholding
         structure, capitalization)
        Additional requirements for investor rights protection (information
         transparency)
    Where we are:
        New admission and listing rules developed
        Working with FFMS to change IGC sector regulation
     IGC Stock Selection Criteria: Easier Access and
                  Investor Protection
   Industry; technology details, market cap, growth rates
        Listing criteria                                  List «B»                List «B»
                                                         (standard)            (IGC Sector)

        Share of stock for one shareholder   < 90%                    -
        Total capitalization                 > 2 billion rubles       < 5 billion rubles

        Period of existence                  Not less then 1 year     Not less then 1 year
        Monthly trading volume (3 months     > 1,5 million rubles     -
        before the admission)
        Monthly average trading volume (6    > 3 million rubles       > 0.3 million rubles
        months after admission)
        Compliance with Corporate            Yes                      -
        Governance Code
        List of the affiliates               Yes                      -
        Additional information disclosure    -                        Yes

   Investors protection mechanism: expert council; additional information
    disclosure for companies; listing agents; investor sophistication requirements
The Pipeline: Derivatives at MICEX Stock Exchange

   On the way to starting derivatives trading in 2006:
       All necessary licences received
       Range of instruments defined: MICEX Index futures and most liquid single
        stock futures, followed by bond yield derivatives
       Clearing model in the works: goal is CCP
       Pricing and services model in the works
Global Concentration of Liquidity Intensifying

   March 2006: NYSE+Archipelago
   March 2006: Australian Stock Exchange (ASX)+futures stock
    exchange SFE Corp.
   LSE continues to receive M&A offers from European, US and
    Australian companies
   NASDAQ+LSE (25%+)
   NASDAQ+Instinet
   Euronext+NYSE or Deutsche Boerse?
   Eastern and Central Europe case
Where is Russia’s Capital Market Heading?

   Russia big enough to deserve a domestic market
   Currency control liberalization effect
   Settlement infrastructure: what change do we need?
   Taxation bumps
Where is Russia’s Capital Market Heading?




   MICEX Stock Exchange mission: THE
       national exchange of Russia
           MICEX Stock Exchange Among Peers

           Equities Trading Volume for January-April 2006 and Number of Issuers
                                           $ Billions              Number of issuers
NYSE                                        6991.9                       2176
NASDAQ                                      4081.3                       3150
London SE                                   2432.3                       3169
Tokyo SE                                    2168.5                       2372
Euronext                                    1214.6                       1225
Deutsche Borse                               877.0                        757
Hong Kong Ex&Cl                              266.7                       1143
Shanghai SE                                  143.2                        831
MICEX SE                                     120.4                        184
Singapore Ex                                 60.8                         680
Wiener Borse                                 24.0                         110
Warsaw SE                                    17.1                         240
                               Contacts

   Address:
        13 B.Kislovsky per., Москва, 125009
   Phone:
        (095) 234-48-11
   Fax:
        (095) 705-96-22
   E-mail:
        info@micex.com
   Web:
        www.micex.ru

				
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