MICEX Shareholders Sum Up The Results Of The Exchange’s Work In 2006, Decide To Pay About 185 Million Rubles In Dividends

Today, the general meeting of shareholders of the MICEX has discussed the results of the Exchange’s financial and economic activities in 2006 and decided to distribute the Exchange’s net profit. According to the MICEX President Alexander Potemkin, the growth of the MICEX Group’s capitalization and its reserve funds and the launch of new technologies and instruments create better conditions for the rapid development of the infrastructure of the Russian financial market, which is becoming an important mechanism of attracting investments to the country’s economy.

Shareholders summed the results of the MICEX’s financial and economic activities in 2006, approved the Exchange’s balance sheet, statement of financial position and distribution of profits and losses. According to the MICEX’s reports, prepared under Russian standards, in 2006, the Exchange’s income amounted to 4.1 billion rubles (up 83% on 2005), while the net profit increased 2.5 times and reached 1.8 billion rubles. Shareholders decided to distribute the net profit in the flowing way:

dividends: 184 816 thousand rubles;
special-purpose funds (including the guarantee fund for clearing in the securities market, the reserve fund and the development fund): 1 663 344 thousand rubles.

Considering the results of the extraordinary general meeting of the MICEX shareholders, held 27 April, shareholders decided to reduce the authorized capital of the MICEX from 1154.15 million rubles to 1114.15 million rubles by paying off 4000 common nominal shares of the MICEX which are at the disposal of the MICEX.

Shareholders appointed Deloitte & Touche CIS auditor of the MICEX till the next annual general meeting of shareholders.

Shareholders elected the Board of the MICEX, which will work till the next annual general meeting of shareholders. The Board is comprised of 14 people:

Alexei I. Akinshin (Deputy President-Chairman of the Management Board of VTB)
Ivan N. Bolshakov (First Vice President - Deputy Chairman of the Executive Board of Evrofinance Mosnarbank)
Andrei F. Golikov (Director for Treasury of Sberbank)
Nadezhda Yu. Ivanova (Director of the General Economic Department of the Bank of Russia)
Vladimir V. Karmashev (Director of the Bank of Russia’s Department for Provision and Control of Financial Markets Operations)
Konstantin N. Korishchenko (Deputy Chairman of the Bank of Russia)
Sergei A. Koshelenko (Deputy Chairperson of the Board of Rosbank)
Nina V. Kukuruzova (Advisor to Chairman of the Executive Board and Member of the Supervisory Council of Bank “St. Petersburg”)
Sergei P. Lykov (Deputy Chairman of Vnesheconombank)
Alexander I. Potemkin (President of the MICEX)
Alexander I. Sobol (Deputy CEO of Gazprombank)
Sergei A. Shvetsov (Director of the Bank of Russia’s Financial Markets Operations Department)
Kirill Ye. Shershun (First Deputy Chairman of the Management Board of CentroCredit Bank)
Andrei A. Yumatov (General Manager and Head of Financial Market Operations of International Moscow Bank).

After the meeting of shareholders, the MICEX Board elected Konstantin Korishchenko (the Bank of Russia) Chairman of the Board and Sergei Lykov (Vnesheconombank) Deputy Chairman.

The following persons were elected members of the MICEX Audit Commission till the next annual general meeting of shareholders:

Svetlana Yu. Kiseleva (Head of the Internal Audit Service of International Moscow Bank),
Tatiana G. Sannikova (Deputy of the Bank of Russia’s Department for Provision and Control of Financial Markets Operations),
Igor B. Turuyev (Vneshtorgbank’s Senior Vice-President and Head of Internal Control Department),
Vyacheslav Ye. Ulupov (Director of the Internal Control and Audit Department of Vnesheconombank of the USSR),
Oleg V. Chistyakov (Deputy Director of Sberbank’s Office for Internal Control and Audit).

The meeting of shareholders summed up the results of the MICEX’s work in 2006. One of the Exchange’s most important achievements was the record-high turnover of trading, which puts the MICEX on the same level with the world’s leading exchanges. In 2006, the total volume of trading in all markets of the MICEX Group amounted to 52 trillion rubles (1.9 trillion dollars), two times more than in 2005. The average daily turnover exceeded 200 billion rubles (211 billion rubles or 7.8 billion dollars). In 2006, the turnover of the MICEX currency market reached 956 billion dollars, up 60% on 2005. In 2006, the turnover of the government securities market and the money market amounted to 4.9 trillion rubles, up 60% on 2005. The stock market was one on the most dynamic segments of the MICEX Group. In 2006, the volume of trading on the MICEX SE reached 20.3 trillion rubles, 3.2 times more than in the previous year. At the end of 2006, the MICEX Group accounted for 95% of the Russian stock market, compared to 85% in 2005. In December 2006, the Group accounted for 77% of the global securities market, compared to 48% in December 2005. One of the Exchange’s achievements in 2006 was the rapid growth of the number of investors on the stock market. The total number of investors reached 265 thousand, mainly due to the coming of new individual investors to the market. During the year, their number grew from 110 thousand to 230 thousand. Today, their number exceeds 300 thousand.

According to the MICEX President Alexander Potemkin, the Exchange achieved these impressive results thanks to a favorable external and internal economic situation, the removal of foreign exchange restrictions, the country’s stable economic growth, the rapid development of all sectors of the exchange-based market and the successful implementation of a number of projects, including:

the launch of trading in Gazprom shares on the MICEX Stock Exchange;
the modification of the “equity repos” trading mode, which improved the liquidity of these operations;
the improvement of index management, which included the development of a family of indices and the increase in the number of securities comprising the MICEX Index;
the reduction of market participants’ costs (Participants’ costs were reduced by 25% for all instruments in the USD/RUR segment and by almost 50% for transactions in non-government bonds concluded in the main (anonymous) trading mode on the MICEX Stock Exchange. Participants’ costs were also reduced for swaps in the EUR/RUR segment.).

Implementing its strategic policy, the MICEX:

extended the time of trading in the euro in the EUR/RUR market till 17:00, Moscow time;
organized the service of a new segment of the money market: the Bank of Russia’s lombard credits;
organized the service of the market for government savings bonds, intended for institutional investors;
The MICEX Stock Exchange launched the Sector for Innovation and Growth Companies (IGC Sector), which was created to promote investments in the sector of innovation and fast-growing companies by small and medium-sized businesses. The IGC Sector must create appropriate conditions for initial public offerings of these companies and promote venture financing in the country.
The MICEX SE introduced the institution of exchange specialists.

The main corporate events that took place on the MICEX in 2006 were:

the inclusion of the National Clearing Center, which obtained the Bank of Russia’s license, in the MICEX Group’s business;
further development of relations with regional exchanges (the MICEX increased its share in the authorized capital of the Asian-Pacific Interbank Currency Exchange (APCEX) and the Rostov Currency and Stock Exchange (RCSE) to 100%).

In the area of information technologies, the MICEX increased the effectiveness of its trading system and brought its own software products to the IT market.

Speaking about the strategic plans of the MICEX Group, Alexander Potemkin noted that the MICEX would continue to evolve as the core of a universal infrastructure group based on an up-to-date hi-tech platform. In order to further develop the infrastructure of the Russian financial market, the MICEX intends to:

put the National Clearing Center into operation in the MICEX Group’s currency market and introduce centralized clearing in the main sectors of the exchange-based market;
develop the market for derivative financial instruments (this includes the launch of derivative instruments on stock assets and the development of a new risk management system);
implement a new procedure of executing transactions in the MICEX SE’s securities market on the basis of simple clearing;
develop the Sector for Innovation and Growth Companies on the MICEX SE;
develop the money market on the MICEX, including the market for inter-bank credits;
transform the National Depository Center from a non-profit partnership into a joint-stock company;
develop the regional exchange network.

The implementation of these projects will help the MICEX to retain a worthy place among the world’s leading exchanges and remain the largest exchange in Russia, the CIS and Eastern Europe.