Borsa Italiana - 2004 Performance (Figures To 29 December)

• The Mib index closed at 22,881, thus achieving the high for the year, with an increase of 17.4% compared to the end of 2003. The low for the year was reached on Wednesday 24 March (19,221). The highest daily increase (+1.3%) was recorded on Friday 2 April, and the biggest fall (-1.8%) on Monday 10 May. December was the month featuring the best performance, while May featured the worst (-2.2%).

• The continuous indices revealed a homogeneous trend, with Mibtel standing at +18.1% and S&P/MIB at +14.9%, while Midex rose by 12.2%. MibSTAR performed better than the general index and those of the companies with greater capitalisation, with an all-time best annual performance of 24.5%.

• Of the 318 shares listed at year end, 186 (58.5% of the total) achieved a substantially positive annual performance (2.5% higher), 24 (7.5%) remain unchanged (performance between +2.5% and -2.5%), 88 (27.7%) are negative (lower than -2.5%) and the performance of 20 (6.3%) cannot be calculated as they were either unlisted at the end of 2003 or were suspended at year end.

• The shares featuring the best annual performance were Garboli (+188.0%), Erg (+104.0%) and Isagro (101.7%).

• Of the shares currently held in the S&P/MIB basket, 28 close the year with a positive performance (notably RCS Mediagroup +53.1%, Autostrade +43.0% and Capitalia +42.8%), 3 remain unchanged, 8 are down (Tiscali -50.4%, STMicroelectronics -34.3%), while the performance of Terna (newly listed in 2004) cannot be calculated.

• 2004 closes with a total of 278 companies listed on the Borsa Italiana markets. This breaks down into 225 companies on the Stock Exchange, 40 on the Nuovo Mercato and 13 on the Mercato Expandi. The Stock Exchange has seen the new listing of 7 companies (of which 6 followed placements with public offer) and an equal number of delistings. On the Nuovo Mercato one company has been newly listed while 4 companies have been delisted. On the Mercato Expandi 2 new companies have been listed.

• This year's 10 new listings (2 companies in the STAR segment, 3 on the blue chip segment, 2 on the ordinary segment of the Stock Exchange, 1 on the Nuovo Mercato and 2 on the Mercato Expandi) bring to 159 the number of companies newly listed on the stock markets over the last seven years, i.e. since Borsa Italiana Spa commenced activity.

• Of the 7 new listings on the Stock Exchange, six took place as a result of placements with public offer (DMT, Terna, Procomac, Azimut Holding, Panariagroup, Geox), while one was the result of a demerger from an already listed company (Sorin from Snia). The new listing of Cell Therapeutics on the Nuovo Mercato was due to the incorporation of Novuspharma, a previously listed company. The two new listings which took place on the Mercato Expandi (Greenvision Ambiente and RGI) were both the result of placements with public offer.

• Of the 7 delistings of companies listed on the Stock Exchange, four were the result of successful completion of takeover bids (Banca Popolare Cremona, Locat, Manuli Rubber, Saeco) and three were due to failure to meet listing requirements owing to bankruptcy or extraordinary administration (Cirio, Giacomelli, Stayer). Of the four Nuovo Mercato delistings, one was due to merger into a foreign company which was newly listed at the same time (Novuspharma - Cell Therapeutics) and three were the result of failure to meet listing requirements owing to bankruptcy or liquidation (Gandalf, TC Sistema, CTO). On the Stock Exchange the savings shares of two companies (Intek and Pininfarina) were delisted, following their conversion into ordinary shares.

• Against the 4,478 new listings and the 4,051 delistings the number of covered warrants and certificates listed on SeDex rose to 3,021 (+16.5%).

• On the Mot the number of listed Government securities is equal to 96 instruments, with 48 new listings and 52 delistings. Following 32 new listings and 89 delistings, the number of bonds present at year end totals 289 instruments. The EuroMot financial instruments rose from 49 to 58, on account of 12 new listings and 3 delistings.

CAPITALIZATION

• For the second year running, the positive trend in share prices and the listing of new companies brought about an increase in the overall capitalization of national listed companies, which rose to € 580.6 billion (€ 487.4 billion at the end of 2003), representing 43.1% of Gross Domestic Product (37.5%). ·

• In detail, capitalization totalled € 568.6 billion for the Stock Exchange, (€ 474.6 billion at the end of 2003), € 6.7 billion for the Nuovo Mercato (€ 8.3 billion) and € 5.3 billion for the Mercato Expandi (€ 4.6 billion).

• At the end of November, Borsa Italiana, with € 550.6 billion, was in sixth place in Europe in terms of the capitalization of national listed companies, ahead of Stockholm (€ 277.2 billion) and Helsinki (€ 138.2 billion) and behind London (€ 2,028.8 billion), Euronext (€ 1,746.1 billion), Deutsche Börse (€ 856.3 billion), Madrid (€ 671.2 billion) and Swiss Exchange (€ 591.5 billion).

• Within the Italian Stock Exchange, the capitalization ranking between the macro-sectors saw Financial confirmed in first place (down from 42.3% in 2003 to 39.2%), ahead of Services (up from 35.1% to 37.6%) and Industrial (which rose from 22.6% to 23.2%).

TRADING

• Total trading on the MTA and securitised derivatives market involved 39.3 million contracts and a turnover of € 753.2 billion. The daily average was 153,653 contracts and a turnover of € 2.9 billion (+ 6.8%).

• Daytime trading of shares listed on the Stock Exchange saw a rise in turnover (daily average rising from € 2.6 to € 2.8 billion, + 5.5%), with the daily average number of contracts standing at 118,686, down by 13.8%. The highest daytime trading figure was achieved on Friday 18 June (session in which derivatives matured), with a turnover of € 7.26 billion (second all time session in the history of Borsa Italiana, after 17 March 2000 with a turnover of € 7.9 billion). The most liquid month was March, which, with a daily turnover of € 3.3 billion, saw the highest volume of trading since November 2000.

• The average value of Stock Exchange share contracts finalized during daytime trading disclosed a decisive increase, rising from € 18,900 to € 23,200, a new all-time high for the Italian market.

• Daytime trading of Nuovo Mercato shares was also up, rising from a daily average turnover of € 53.6 million to € 72.5 million (+ 35.2%). The highest daytime trading figure was achieved on Wednesday 22 September, with a turnover of € 411.3 million. The most liquid month was September, with a daily average turnover of € 117.1 million.

• ENI was the most traded share in terms of turnover, involving a total of € 87.3 billion (11.9% of the total), followed by STMicroelectronics (€ 70.9 billion and 9.7%), TIM (€ 69.7 billion and 9.5%), Enel (€ 61.4 billion and 8.4%) and Unicredito Italiano (€ 55.4 billion and 7.6%). The leading share on the Nuovo Mercato, Tiscali, comes in 16th place with € 10.8 billion (1.5% of the total), and the second share, Fastweb, in 25th place (€ 5.6 billion and 0.8%).

• In terms of contracts, the most traded share was STMicroelectronics, with 2.9 million contracts (8.4% of the total), followed by Eni (1.6 million and 4.7%), Enel (1.3 million and 3.9%), Tiscali (1.1 million and 3.1%) and Generali (1.1 million and 3.1%). Fastweb is in 14th place (0.7 million and 2.1%).

• Daytime trading of covered warrants and certificates listed on the SeDex totalled € 62.2 million in terms of turnover (+ 48.3% when compared with 2003) and 13,488 contracts per day.

• At the end of November, the Italian market was notable in Europe for the high liquidity of its shares, as proven by its leading position in terms of turnover velocity, the indicator which compares trading turnover with the capitalization to show the annual rate of turnover of shares. Italian turnover velocity came to 139.0%, compared with 113.5% for Stockholm, 105.8% for Deutsche Börse, and 105.0% for Helsinki. Borsa Italiana - with a daily average of € 2.8 billion - and confirmed its fourth place in Europe in terms of trading of shares on electronic systems, ahead of Madrid (€ 2.5 billion), SWX-Virt-x (€ 1.6 billion) and Stockholm (€ 1.1 billion) and behind Euronext (€ 6.1 billion), London (€ 5.1 billion) and Deutsche Börse (€ 3.6 billion).

• After hours trading disclosed 1.1 million contracts and a turnover of € 7.9 billion, achieving a new all-time high in terms of turnover, whose daily average rose from € 31.0 million in 2003 to € 33.2 million in 2004 (+ 6.8%). January was the month with the most trading activity, with a daily average of 6,600 contracts and turnover of € 41.5 million. The highest daytime trading figure was achieved on Friday 16 January for contracts (14,100) and Monday 13 September for turnover (€ 198 million, a new all-time high).

• Sharp growth was seen in ETF trading, which with daily turnover of € 12.6 million (+ 115.8% compared with the average in 2003) and 518 contracts a day (+ 140.5%) achieved an all-time high. The month with the highest levels of trading was December (€ 22.2 million and 861 contracts on average a day). The highest daily trading figure was reached on Thursday 2 December for contracts (1,435) and Thursday 28 October for turnover (€ 61.5 million). In both cases, the levels achieved represent new all-time highs for the Italian market. During November, Borsa Italiana's ETF market was the most liquid in Europe.

• On 22 March, derivatives were introduced onto the new S&P/Mib index; they completely replaced the derivatives on the Mib30 as from 20 September.

• During the year, 18.3 million standard contracts were traded with a notional turnover of € 705.4 billion. The daily average number of standard contracts increased from 70,365 last year to 71,318 (+ 1.4%), a new all-time high for the Idem market. A breakdown into individual instruments discloses significant growth in stock futures and stock options and a drop in derivatives traded on the index.

• Trading in futures on the index recorded a daily average of 13,007 standard contracts and a notional turnover of € 1.8 billion. March, also characterized by quarterly maturity, was the most liquid month, with a daily average of 18,025 standard contracts and notional turnover of € 2.4 billion.

• MiniFutures trading involved a total of 1.5 million standard contracts and € 41.5 billion in notional turnover, with a daily average of 5,797 standard contracts and notional turnover of € 162.0 million.

• Trading in options on the indexes disclosed a daily average of 8,666 standard contracts and notional turnover of € 596.3 million.

• Trading in stock options rose in terms of standard contracts, going from a daily average of 31,445 in 2003 to 37,007 in 2004 (+ 17.9%). At year end, 40 options had been traded, of which two are underlying instruments of the Nuovo Mercato (Fastweb and Tiscali).

• Trading in stock futures increased by 264.5%, rising from 1,857 standard contracts a day in 2003 to 6,771 in 2004. In terms of turnover, the figure rose from a daily € 8.1 million in 2003 to € 30.5 million in 2004 (+ 275.5%). At year end, 22 stock futures had been traded, of which two are underlying instruments of the Nuovo Mercato (Fastweb and Tiscali).

• Trading in Government securities rose from € 133.8 billion in 2003 to € 139.1 billion (+ 3.9%), with a daily average of € 543.2 million. Trading in bonds listed on the Mot totalled € 7.3 billion, involving a daily average of € 28.5 million.

• Trading on the EuroMOT came to € 3.6 billion, with a daily average of € 14.0 million. The new all-time daily high of the EuroMOT market was reached on Thursday 22 January, with 2,261 contracts and a turnover of € 59.2 million.

• During the year, listed companies raised a total of € 15.2 billion by means of right issues and placement operations, on growth with respect to the € 12.6 billion reported in 2003 and € 6.6 in 2002.

• In 2004, listed companies performed 23 right issues (15 on the Stock Exchange, 6 on the Nuovo Mercato and 2 on the Mercato Expandi), which enabled the listed companies to raise € 3.3 billion (28 transactions totalling € 9.8 billion in 2003). The largest three transactions in 2004 (which together raised two thirds of the total) were carried out by BNL in November-December (€ 1.2 billion), by Reti Bancarie Holding in May-June (€ 639 million) and by Credito Valtellinese in March-April (€ 344 million). Among the other transactions, the following raised amounts in excess of € 100 million: Banca Popolare di Sondrio (€ 220 million), Buzzi Unicem (€ 206 million), Chl (€ 120 million) and Telecom Italia Media (€ 119 million). The other transactions (16) raised funds under the threshold of € 100 million. The average size of the transactions, influenced by the size of the larger ones, came to € 142 million (€ 352 million in 2003), while the median was € 27 million (€ 108 million in 2003). The transactions mainly took place by means of the issue of ordinary shares (21 cases). In one case, a placement of ordinary shares plus convertible bonds took place and in another, ordinary and savings shares were placed. In addition to the subscription transactions, 6 other transactions were carried out without payment (Banca Popolare di Sondrio, Banche Popolari Unite, Bipielle Investimenti, Bnl, Premuda and Reti Bancarie Holding).

• The 18 placement operations - excluding two transactions for the purpose of the placement of real estate fund units - raised € 12.0 billion, a figure which has risen sharply when compared with the last two years (€ 2.8 and € 2.9 billion in 2003 and 2002, respectively).

In 8 of the cases, involving a total of € 2.6 billion, the placements were carried out for the purpose of Initial Public Offering transactions (in date order, Dmt - Digital Multimedia Technologies, Terna, Procomac Industries, Azimut Holding, Greenvision Ambiente, Panariagroup, Rgi, Geox). In 2 cases, totalling € 136 million, they were carried out for the offering of convertible bonds (Azimut Holding and Banca Ifis) and in another 7 cases, for a total of € 1.6 billion, they concerned private placement operations with institutional investors only (Amplifon, Autostrade, Banca Intesa, e.Biscom, Pirelli Real Estate - twice - and Socotherm). In 1 other case, the placement involved a secondary offering, for € 7.6 billion (Enel).

• There were also two cases of placements of real estate fund units (Tecla and Olinda Fondo Shops), for a total of € 540 million.

• The largest transactions during 2004 included the Enel placement (€ 7.6 billion, representing 64% of the total) and the placement carried out for the new listing of Terna (with an IPO of € 1.7 billion). The following were also significant in size: the private placement of Autostrade (€ 912 million), the IPOs of Azimut (€ 380 million, excluding the related placement of convertible bonds) and Geox (€ 344 million), the private placement of e.Biscom (€ 290 million) and the placements of Tecla (€ 287 million) and Olinda Fondo Shops (€ 252 million) real estate fund units. Other IPO transactions included Panaria (which raised € 89 million), Dmt (84), Procomac Industries (19) and the first two listings on the Mercato Expandi, Greenvision and Rgi, respectively raising € 11 and € 4 million.

In the 13 transactions with public offerings, the method of sale alone (OPV) was used 6 times, in 2 cases the subscription of new shares alone (OPS) was used, and the mixed technique of sale and subscription (OPVS) was used in the 5 remaining cases.

• Overall, around 64% of the capital raised was subscribed by institutional investors. The remainder (36%) was subscribed by retail investors, involving a quota of 13% subscribed by Enel's pre-existing shareholders at the time of the secondary placement in October. Excluding just private placement operations reserved for institutional investors, the percentage of the total raised, subscribed by the latter, came to 59%.

• Moving onto the 8 IPO transactions, the shares bought by retail investors represented 40% of the total raised (41% in 2003), compared with 60% by Italian and foreign institutional investors (59%). A breakdown of the retail segment reveals that 21% of the capital raised was subscribed by the general public, 4% by employees or individuals associated with the issuing companies and 15% by other parties benefiting from reserved tranches (residents, clients of online trading brokers, clients, etc.).

• With regards to the IPO transactions, the majority of the capital raised - 87%, similar to 2003 with 88% - pertains to shareholders who have sold their equity holdings. The remaining part (13%, compared with 12% in 2003) went directly to the issuing companies, who raised € 352 million. Excluding the Terna placement, which represents 65% of the total raised, the incidence of the OPV portion falls to 62%, but continues to be predominant.

• A re-discovered interest was witnessed for placement operations, especially towards the latter part of the year. The average oversubscription figure (which gauges the ratio between the number of securities demanded and effectively allocated) among the IPOs came to 2.3 (the median figure was 1.5), with peaks equalling 6.7 for Geox, 3.6 for Greenvision Ambiente and 2.3 for Terna. The Enel secondary offering carried out in November received applications for 2.9 times the number of shares offered.

• During the year, a total of 19 takeover bids were performed raising € 0.5 billion (32 in 2003, for a total of € 16.9 billion). The year was characterized by transactions of a smaller size and by a modest total value: since 1992, only 1998 witnessed a poorer result.

• In 5 of the cases, the takeover bids were voluntary (22 in 2003) while 14 were compulsory takeover bids, of which 4 were residual (17 in 2003, including 10 residual).

• The main transactions in 2004 were the takeover bids for Saeco Int. Group (followed by a residual offer) and Ericsson, during the period running from May to June. The value of the two transactions amounted respectively to € 233 million (including both the compulsory takeover bid in May-June and the subsequent residual bid in July-August) and € 135 million. All the other transactions involved a value of less than € 30 million.

• The voluntary and compulsory total takeover bids included 4 which resulted with more than 50% subscription of the securities demanded (Giro Investimenti for Saeco Int. Group; Arena Holding for Roncadin; Dina Italia for Ericsson; and Vento for Grandi Navi Veloci), 5 involving subscription between 20% and 50% (Acqua Marcia Holding for Acqua Pia Antica Marcia; Roland Europe for its own shares; Seconcar for Perlier; Eutelia for Nts Network Systems; and Sintesi for Bastogi), and 6 under 20% (Sintesi for Brioschi Finanziaria; La Leonardo Finanziaria for Beni Stabili; Sirefid for Dmail Group; Lupo for Euphon; and SGG Holding for Saes Getters ordinary and savings shares). The 4 residual bids saw rates of subscription ranging between 68% and 90%, thereby permitting the bidders to exceed the threshold of 98% and exercise the purchase option on the remaining shares.

• Following the takeover bid transactions during the year, 4 companies were delisted (Banca Popolare di Cremona, Locat, Manuli Rubber and Saeco Int. Group), involving a total capitalization as of 30 December 2003 of € 2.1 billion (equalling 0.4% of total capitalization).

Capitalization reached € 580,9 billion (487,4 at the end of 2003) representing 43,1% of Gross Domestic Product.

In detail, capitalization totalled € 568,9 billion for the Stock Exchange( 474,6 at the end of 2003), € 6,7 billion for the Nuovo Mercato (8,3) and 5,3 for the Mercato Expandi (4,6).