The MICEX Stock Exchange's Shareholders Sum Up The Results Of 2009

On June 1, 2010, the MICEX Stock Exchange’s shareholders held their annual general meeting. The meeting summed up the results of the Exchange’s financial and economic activities, approved the annual financial statements and the annual report of the MICEX Stock Exchange for 2009. In 2009 the net profit of the MICEX Stock Exchange amounted to 284 982 rubles. The shareholders decided to distribute the net income as follows: dividends: 28 498 thousand rubles; retained earnings: 256 484 thousand rubles.
The meeting elected a new Board of the MICEX SE, consisting of:

Mikhail Alekseyev, Chairman of the Board of UniCreditBank;
Mikhail Belyaev, CEO of OTKRYTIE Financial Corporation;
Oleg Vyugin, Chairman of the Board of Directors of MDM Bank;
Anatoliy Gavrilenko, Chairman of the Supervisory Board of ALOR Company;
Vladimir Gusakov, Vice President of the MICEX;
Bella Zlatkis, Deputy Chairman of the Board of Sberbank;
Alexander Kolomiets, Vice President and Head of the Department for Corporate Long-term Investments and Share Capital of Gazprombank;
Konstantin Korischenko, President of the MICEX, CEO of the MICEX Stock Exchange;
Sergei Lykov, Member of the Board and Vice-Chairman of Vnesheconombank;
Gennady Mayatski, Vice-President and Head of Treasury of Evrofinance Mosnarbank;
Vladimir Reutov, Deputy Chairman of the Board and Member of the Board of Bank Saint Petersburg;
Andrey Yumatov, Vice-President of the Investment Unit of VTB Bank.

Immediately after the shareholders’ meeting, the meeting of the Board of the MICEX SE elected Bella Zlatkis (Sberbank of Russia) Chairperson of the Board.

Deloitte and Touche CIS Company was appointed as the independent auditor of the MICEX Stock Exchange.

The shareholders’ meeting discussed the Stock Exchange’s performance in the reporting period. The total volume of transactions in non-government securities on the MICEX SE, including transactions in stocks, bonds, shares of investment funds, futures on shares, futures on the MICEX Index and repos, amounted to 40.7 trillion rubles. The total volume of secondary trading in shares increased by 2 trillion rubles to 14.3 trillion rubles. The volume of initial offerings of bonds grew by 67% to 1.02 trillion rubles.

Brief information:

The MICEX Stock Exchange is Russia’s largest exchange which organizes trading in securities of almost 700 Russian issuers, including such blue chips as Sberbank, Gazprom, Rostelecom, LUKoil, Rosneft, Norilsk Nickel, VTB Bank and others, whose combined capitalization, as at December 31, 2009, amounted to 22.3 trillion rubles (738 billion USD). The MICEX Stock Exchange organizes trading in 702 bonds of 418 issuers, including 558 corporate bonds of 372 issuers, 29 commercial papers of 16 issuers, 93 regional bonds of 32 issuers, 14 municipal bonds of 13 issuers and 8 Russian eurobonds. Participants in trading on the MICEX SE are 654 organizations – professional participants in the securities market. Their clients are over 735 thousand investors. The MICEX Stock Exchange is among the world’s top 25 stock exchanges.

In 2009, the MICEX Stock Exchange maintained its position as the center of pricing formation for securities of Russian companies. The proportion of the MICEX SE in the on-exchange share market was about 98% (taking into account the OTC segment: 65.2%). After the crisis-ridden second half of 2008, the competitive position of the Exchange was strengthened by the increased activity of Russian investors, primarily individuals.
In 2009, the capitalization of the MICEX SE’s share market grew by 119% to 738 billion USD (22.3 trillion rubles). By the end of the year, the MICEX Index rose by 121% to 1370.01 points, which allowed him to join the group of the world’s fastest-growing major indices. Growth of the Russian index was significantly higher than the growth of the major stock market indices of developed countries (20–40%). Of the BRIC countries, only Brazil showed higher growth. During the year, the proportion of the MICEX Stock Exchange in the global volume of trading in the secondary market for shares and depository receipts for shares in Russian companies increased from 63.1 to 69.6%.
In 2009, the amount of funds raised in the market for corporate and regional bonds increased significantly. The total volume of placements increased by 67% to 1.02 trillion rubles. This is the largest volume in the history of the MICEX Group’s bonds market.
The expansion of the family of the MICEX indices was another step aimed at improving the range of instruments used by professional participants in the stock market. In December 2009, the the Exchange began to publish new indicators for the Russian stock market: the MICEX Consumer Goods and Services Index (MICEX CGS) – the index of companies in the consumer sector – and the MICEX Chemicals Index (MICEX CHM) – the index of chemical and petrochemical companies. The new indices supplemented the group of the MICEX sectoral indices, including such indices as MICEX O&G (oil and gas), MICEX PWR (power engineering), MICEX TLC (telecommunications), MICEX M&M (metallurgy), MICEX MNF (machine building) and MICEX FNL (finances). In April 2009, the Exchange started to publish the indicators of the repo rate. The indicators are calculated separately for the equity repo market and the bond repo market.
The instability of the financial market combined with the outflow of non-resident investors. In 2009 their proportion in the volume of trading in the secondary market for shares decreased from 36% to 24%. The growth of activity of individual investors, the number of which increased by 20%, contributed to the recovery of prices in the stock market. The instruments of the stock market were seen as attractive investment objects, despite the instability of the financial system.

The role of on-exchange markets as a venue for secure transactions and settlements increased.
In 2009, the Exchange continued to develop its line of instruments and improve its trading technologies.
In 2009, the MICEX Stock Exchange has the following major projects:
• Participants in trading were given the possibility to conclude repos with the Bank of Russia in the new modes of trading: “Repo with the Bank of Russia: Repo Auction” and “Repo with the Bank of Russia: Fixed Rate”;
Jointly with RUSNANO Corporation, the MICEX Group opened a new exchange sector, the Market for Innovations and Investments, on the basis of the Sector for Innovation and Growth Companies (IGC), operating on the MICEX Stock Exchange since 2007. The Market for Innovations and Investments includes the IGC Sector, the IGC-2 Sector (for private placements) and the Information Board (for non-public companies). Despite the continuing crisis in 2009, in the IGC Sector, trading was launched in shares of NEKK, a fast-growing chemical company. The Human Stem Cells Institute (HSCI), a biotechnology company, made its IPO in the Market for Innovations and Investments.
• The Listing Rules were supplemented with the concepts of “default” and “technical default”, the procedure for cross-delisting, which provides for the delisting of all bond issues of an issuer when the latter fails to perform its obligations in respect of any of the bond issues admitted to trading on the MICEX Stock Exchange with or without listing (except in cases of technical default on the bonds of corporate issuers and commercial papers);
• To protect the rights of investors, the Rules of trading in securities on the MICEX SE were supplemented with two new trading modes intended for transactions in defaulted bonds. Also, the Listing Rules were supplemented with conditions for the lifting of restrictions on permissible trading modes for the bonds of an issuer that has defaulted on its obligations.