GSS NEWSLETTER · One of the main reasons contributing to the oversubscription of government debt...

GSSNEWSLETTERISSUE 143March 2013

Issue 143, March 2013

2

CoNTENTS

EdIToRIaL 4

HR NEWS 5

JoHN’S CoRNER 6

aUSTRIa 8Vienna Stock Exchange starts trading in futures on the Istanbul Traded Index 8

Index cooperation with Kazakhstan Stock Exchange 8

BELaRUS 9Draft amendments to the Law “On the Securities Market” scheduled for review 9

BoSNIa aNd HERzEGovINa 10Slight credit growth in 2012 10

BULGaRIa 11Law on Public Finance promulgated 11

Bulgarian National Bank confirms its position to join T2S after Bulgaria’s Euro adoption 12

CRoaTIa 13Value of Croatian securities grew in 2012 13

Test shows Croatia’s banking sector is resilient 13

CzECH REpUBLIC 15Czech Central Securities Depository plans changes in settlement 15

Czech Republic will not introduce the Financial Transaction Tax 16

Draft law regulating anonymous shares passed in the Lower House 16

HUNGaRy 17Hungary issued USD 3.25 billion FX government bonds 17

KazaKHSTaN 19Private pension funds consolidated into one government-managed pension fund 19


3 Contents

KyRGyzSTaN 20Business activity in Kyrgyzstan’s market 20

poLaNd 21WSE formally accepts UTP system 21

RoMaNIa 23NBR keeps monetary policy rate unchanged 23

Changes to the 2013 Romanian Fiscal Code 23

RUSSIa 24Central Bank of Russia to exit Moscow Exchange within two years 24

FFMS and NSD signed an Agreement on Information Exchange 24

Foreign investments into SME liberalised 25

NSD commenced repository services 25

SERBIa 26Year-on-year inflation continues rising in January 2013 26

SLovaK REpUBLIC 27SDX Group bond index base revision 27

Bratislava Stock Exchange trading overview January 28

SLovENIa 29Slovenian banks posted EUR 664 million loses 29

UKRaINE 30Bond holders to receive new rights 30

azERBaIJaN 31Azerbaijan State Securities Committee studies Polish experience 31

azERBaIJaN 31

yoUR CoNTaCTS 32

dISCLaIMER 35

IMpRINT 36


4

EdIToRIaL

Dear Clients, The first two months of the new year are already behind us. Some would say that this has been sufficient time in order to gain an understanding of how the market would develop throughout the rest of the year. One thing is certain though - this season’s flavour is called government debt.

Investors have for a long time been looking at Serbia for attractive yields on its government securities and there has been a sustainably strong appetite for local currency denomi-nated instruments. The high demand for Serbian dinar debt, often up to two times more than the supply, is now making this source of liquidity for the Serbian government cheaper as compared to last year. Apart from local institutional investors, a great portion of these securities is held by foreign ones. For the time being, the maturities of local currency government debt available to foreign investors are 53 weeks, 18 months, 24 months, 3 years and 5 years. In February, in addition to the local issues, a USD 1.5 billion 7-year Eurobond was placed to international investors with a yield of 5.15%. This was the third placement in the period between Q3 2012 and Q1 2013, aimed at replacing the more expensive previously issued London club debt.

One of the main reasons contributing to the oversubscription of government debt auctions, is the recently implemented set of fiscal measures. The fiscal consolidation programme consisted of numerous measures (e.g., a VAT increase from 18% to 20%), some of which were aimed at stimulating tax debtors to pay debt principal by preset deadlines in return for writing off the due interest.

Please let me take a moment to remind you that in the last quarter of 2012 the government also dealt with the taxes related to financial instruments – amendments to the Law

Jasmina Radicevic Head of GSS Serbia

on Corporate Profit Tax, in effect since 25 December, 2012, introduced higher withholding tax rates on income earned by residents of the so called preferential tax system jurisdictions and prolonged the reporting period related to capital gains tax for all non-resident legal investors without a permanent business establishment in Serbia from 15 to 30 calendar days following the settlement date.

Changes to the Law on Personal Income Tax also increased the standard withholding tax rate and capital gains tax rate from 10% to 15% as of 8 October, 2012. On a more positive note, securities that have been permanently held by private investors for no less than ten years are now exempt from capital gains tax.

Concurrently, the regulatory focus on the implementation of AML standards and meeting KYC requirements by all market participants has had an increasing importance. Despite the large scope of local entities obliged to implement high AML standards in their daily activities, traditionally banks have been the ones taking this more seriously than anyone else – and this should definitely come as no surprise, knowing the intensity of the supervision the banking industry is exposed to.

Nowadays though, we witness regulators determined to make sure that investment firms, funds and fund managers, insurance companies and other institutional players do not fall behind. Besides the greater intensity of supervision, it is clear that the regulatory demands put in front of market participants when it comes to documentary requirements related to client identification and risk assessment will not diminish - quite the opposite.

This process, however, should not neglect the introduction of important international practices such as third party iden-tification, reference to electronic sources of information, etc., which can make it more efficient for local market participants and less painful for their clients.

Best regards,



5

HR NEWSRelationship Management Team in Slovenia welcomes back Barbara Zajc

We are glad to announce that Barbara is back in her role as a Relationship Manager in Global Security Services in Uni-Credit Banka Slovenia, after having been on maternity leave.

Barbara has joined the GSS Team in 2004, after having worked in custody operations at Nova Ljubljanska banka. Based on her experience in settlement, corporate actions and the account opening process, she joined the Relation-ship Management Team in 2006.

Barbara will resume relationship management for most of the clients she was already responsible for in the past. We wish her a good start!

Vanda Mocnik Kohek Head of GSS Slovenia

Olja Matijas appointed Relationship Manager in Serbia.

It is our great pleasure to announce the appointment of Olja Matijas to the position of Relationship Manager within GSS Serbia.

Olja joined UniCredit Bank Serbia's GSS team in 2007. Before her appointment as a Relationship Manager for international clients, Olja has gained significant experience in the securi-ties services operations area, ranging from settlement to NAV calculation. For the past few years Olja was responsible for domestic institutional clients such as pension funds and investment funds.

We wish Olja every success in her new role.


Barbara Zajc Relationship Manager

Olja Matijas Relationship Manager


6

John Gubert on pricing risk

JoHN’S CoRNERInvestment management is becoming a more complex business. The average geography, instrument reach and complexity of most funds has increased over the last couple of decades. And that has been accompanied by a regula-tory tendency to extend the risk remit of administrators and custodians.

Many pension funds now overlay their schemes with lon-gevity-related derivatives. The alternative fund sector has currently a leverage of 2.5-3.0 times both through straight debt and derivative instruments. The traditional long only sector has been attracted to exchange-traded funds, which are now a far cry from their original simple tracker structures. And hedging is as much a phenomenon of the long only sector as it is of its more adventurous brethren among the hedge fund community.

One by-product of Dodd Frank or EMIR will be to bring many OTC instruments into clearing; and thus into structures that mean they could be traded on markets. That will make them even more respectable; and thus more likely to figure in more portfolios.

Stock lending still prevails as a core feature of many fund classes, especially ETF’s where performance differentiation within any one class is a challenge. And, although custodians quite rightly express concern at prime broker re-hypotheca-tion of fund assets, many funds still find it valid as they have few alternative funding sources in this age of conservative lending, deleveraging and risk averseness by the banks.

Yet, whilst funds have become more complex and structures more risky, fees have declined. Even the hedge fund market is seeing certain more maverick funds seeking to cut through the incredible 2 +20% structures of this sector, albeit by apparently looking for a still rich 0.5+10% fee on assets and profits respectively. And that is genuinely rich by comparison to the few basis points that the index trackers can command.

And consider the poor custodian or administrator. Pub-lished results by many majors in this sector indicate that they earn an average of around two basis points of assets under custody. That covers a variety of flows. There will be ad valorem fees ranging from notional in markets such as domestic US through to perhaps 25 basis points or so in some frontier markets. Transaction charges for funds are rarely a meaningful component of fees unless one handles certain active quants or high frequency trading funds. Stock loans, collateral management, cash management and other traditional sources cover the balance of fees. It was the great Marsh Carter, when he ran State Street, who said of custody: “one product with multiple revenue streams!”

As we move into this new diverse and more regulated age, the risks do compound. Administrators in Europe appear liable for cash management and are expected to mirror the cash management role of their funds. That is simple for long only, low volume trading funds but consider a lever-aged, derivative overlaid, multicurrency, highly active fund. Administrators in the fund of fund space are becoming more and more embroiled, in many jurisdictions, in validating the operational due diligence undertaken by their managers in selection of funds for investment. Custodians are becoming accountable for sub-custodian risk. Stock lending is quite possibly going to be hit with increased capital ratios under the latest Basel rules. Re-hypothecation, in the “very light touch” regulated London market, will most likely be subject to limitations similar to those imposed by the SEC.

Yet fees continue to fall. One brave global custodian, in a recent interview, suggested that fees would have to rise to around fifteen basis points to justify the risks being assumed. That quantum appears to me to be exaggerated but it does highlight the reality that fees and risk are misaligned and an adjustment is needed.

There are two obvious ways forward. The key one is that custodians and fund administrators are going to have to learn to say no more often. The second is that fees may have to rise; or at least stabilise.

There are risks that few custodians will want to assume. These may be structural with the already fraught relation-ship between prime brokers and custodians being ripe for


7 John’s Corner

change, although gaining positive dialogues is getting more difficult. Prime service provision is becoming a core activity of the custodians themselves and they look more like preda-tors than partners of the PB population. The risk of specific markets, where ownership rights are unclear, where the dif-ference between beneficial or legal title is ill defined or where the banking system is fragile, have to be re-assessed and a “banned” list provided to the more adventurous of funds. And custodians, as well as administrators, need to be proactive, rather than reactive, to changes in leverage or instrument strategies across their funds.

Fees do need to stabilise. The average two basis points noted covers a range. But the old policy of looking for a bull market to bail out a poor fee proposition is untenable in today’s environment. Interestingly, some avid price predators in some markets appear recently to have hit the buffers in respect of their top management support.

Have we reached the bottom in terms of fees? It would be a brave person to state that is the case. But any sensi-ble business analysis shows the current risk return ratio for custodians, especially for those covering global OECD based funds, seems pretty close to sub-optimal!

John GubertChairman Global Securities Services Executive Committee

John Gubert also appears on blog.globalcustodian.com


8

Austria

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 36,617GDP Real 2012e (Change against prev. year in %) 1.23-Month Money Market Rate (current in %) 0.17Inflation in 2012e (yearly average in %) 2.1.../EUR -Upcoming Holidays none

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2600

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Actual 38 Day moving average 200 Day moving average

2/21/2013 4:58 PM

Source: Thomson Datastream

Source: UniCredit, National Statistics

ATX

aUSTRIa

Vienna Stock Exchange starts trading in futures on the Istanbul Traded IndexTrading in euro futures on the Istanbul Traded Index (IBTX in EUR) started in February on the Vienna Stock Exchange. The joint index of the stock exchanges of Istanbul and Vienna has been calculated since last September and enjoys wide international recognition. The underlyings of the IBTX are the prices of the twenty most actively traded shares listed on the Istanbul Stock Exchange, one of the world’s fastest growing markets.

Impact on investors For information purposes only.

Index cooperation with Kazakhstan Stock ExchangeThe Vienna Stock Exchange has acquired a new index coop-eration partner with the Kazakhstan Stock Exchange (KASE). Starting today, the Vienna Stock Exchange will calculate the index KTX Local. The contract was signed at the end of last year by both exchanges. The index is composed of the eight most actively traded companies and will be calculated and disseminated daily in real time by the Vienna Stock Exchange.

With this new index, the Vienna Stock Exchange underpins its international index competence and enlarges its network of stock exchange cooperation partners. The Vienna Stock Exchange now has 88 indices, of which 66 track national, regional and sector trends in the countries of Central and Eastern Europe.


Written and edited by: Thomas Rosmanitz Head of Relationship Management Austria Global Securities Services, AustriaTel. +43 50505 58515 · [email protected]

Market Capitalisation EUR 80.6bn

YTD Dev. of Market Capitalisation 1.0%

Number of SE Transactions p.m. n.a.

YTD Dev. of SE Transactions n.a.

SE Turnover (Vienna SE) EUR 1.7bn

Monthly Index Performance (ATX/VSE) 1.9%

GDP per Capita (2012 in EUR) 36,617

GDP Real 2012 (Change against prev. year in %) 1.2

3-Month Money Market Rate (current in %) 0.17

Inflation in 2012 (HVPI yearly average in %) 2.1

Upcoming Holidays none


9


BELaRUS

Draft amendments to the Law “On the Securities Market” scheduled for review A decree of the President of Belarus, Alexander Lukashenko, provides the consideration of the update of the law “On the Securities Market” in 2013.

The draft law was worked out by the Ministry of Finance of Belarus jointly with the FIRST Fund of the World Bank as part of the international technical assistance “Belarus: promotion to the development of the securities market after assess-ment of the financial sector” in line with IOSCO principles and European Union (EU) Directives.

The draft law is fully in line with the international agreements to which Belarus is party, including the agreement on the har-monisation of the securities market legislation in accordance with the creation of the Common Economic Space (CES), which provides an approach of the national legislation to the principles of IOSCO and EU Directives.

The creation of CES in a medium term perspective suggests mutual recognition by the participants (Russia, Belarus and Kazakhstan) of the registration of the securities issued in the country of origin of the issuer. This development shall allow local issuers to arrange circulation of securities in other countries of the CES.

Impact on investors The adoption of the new version of the Law “On the Secu-rities Market” will contribute to a rapid integration of the Belarusian securities market to the global financial system and a closer interaction of financial markets of Belarus and other countries.

Written and edited by: Evgenia Klimova Head of Product and Business Development Global Securities Services, RussiaTel. +7 495 232-5298 · [email protected]

Market Capitalisation BYR 8.9tr

YTD Dev. of Market Capitalisation n.a.

Number of SE Transactions p.m. (BCSE) 738

YTD Dev. of SE Transactions -55.4%

SE Turnover (BCSE) BYR 8.940,8bn

Monthly Index Performance (BCSE) 402.6%

GDP per Capita (2012 in EUR) 128


3-Month Money Market Rate (current in %) n.a.

Inflation in 2012 (yearly average in %) 3

BYR/EUR 0.00009

Upcoming Holidays 8 March


10

Source: Bloomberg


Bosnia_Herzegovina

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 3,577GDP Real 2012e (Change against prev. year in %) 2.53-Month Money Market Rate (current in %) -Inflation in 2012e (yearly average in %) 2.6BAM/EUR 1.95Upcoming Holidays none

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2/21/2013 4:58 PM

BIFX

Market Capitalisation (Sarajevo SE) BAM 4.6bn


Number of SE Transactions p.m. 757


SE Turnover (SASE) BAM 18.2mn

Monthly Index Performance (SASX-10/SASE) 4.1%

Market Capitalisation (Banja Luka SE) BAM 4.0bn


Number of SE Transactions p.m. 2,225

YTD Dev. of SE Transactions 0.2%

SE Turnover (BLSE) BAM 39.5mn

Monthly Index Performance (BIRS/BLSE) -2.0%




Inflation in 2012 (yearly average in %) 2.6

EUR/BAM 1.95


BoSNIa aNd HERzEGovINa

Slight credit growth in 2012 According to data of the Central Bank of Bosnia and Her-zegovina (CBBH), the credit growth in 2012 amounted to 4.27%, which is encouraging. However, it is insufficient for a more dynamic recovery of the real sector, therefore larger credit activities of the commercial banks are expected in this year.

At the end of 2012 banking sector credits in total amounted to BAM 15.73 billion. Out of total credits, BAM 11.48 billion related to long-terms credits, while BAM 4.25 billion related to short-term credits.

Credits to the non-governmental sector amounted to BAM 14.92 billion, out of which BAM 14.06 billion was related to the private sector. The amount of BAM 6.79 billion was related to the households within the total credits to the private sector, while BAM 7.27 billion was related to the corporate sector.


Written and edited by: Belma Kovacevic Relationship Manager Global Securities Services Bosnia and Herzegovina Tel: +387 33 491 810 · [email protected]


11



Bulgaria

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 5,434GDP Real 2012e (Change against prev. year in %) 3.53-Month Money Market Rate (current in %) 1.87Inflation in 2012e (yearly average in %) 3.3EUR/BGN 1.96Upcoming Holidays none

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430

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2/21/2013 4:58 PM

SOFIX

BULGaRIa

Law on Public Finance promulgatedThe Law on Public Finance has been promulgated. This new law summarises the national fiscal rules applicable to the general government, both at central and local level, and expresses government intentions for a wide reform in the medium-term budget framework to address the existing weaknesses and to support the ongoing fiscal consolida-tion processes. The law transposes Directive 2011/85/EU of November 8, 2011 on the requirements for budgetary frameworks of Member States. The adoption of the Law on Public Finance repeals the Law on State Budget Procedures and the Law on Municipal Budgets.

Among the most important points in the new law are:

■■ Focus on strengthening the interaction among the legisla-tive, the executive, the judiciary power and the municipali-ties with the aim of observing common limitations, rules and procedures to achieve fiscal policy objectives while ensuring the autonomy of the budgets of the three powers.

■■ The annual consolidated fiscal programme budget deficit on a cash basis should not exceed 2% of GDP.

■■ The medium-term budget target for structural deficit of the general government on an annual basis should not exceed 0.5% of GDP.

■■ Provisions for accounting and statistics of public finances in accordance with the Eurostat methodology are intro-duced.

The Law on Public Finance will enter into force as of January 1, 2014 and the budget procedure for the drawing up of the budgets and the estimates for the EU funds for 2014 will be carried out under the rules of the new law.

Impact on investors The adopted Law on Public Finance shall ensure the desired continuity of the fiscal consolidation and guarantee that budget discipline will be maintained, including com-pliance of fiscal policy with the reference values for the budget deficit and for the size of the consolidated govern-ment debt in light of the Maastricht criteria.

Market Capitalisation BGN 10.4bn




SE Turnover (Bulgarian Stock Exchange) BGN 115.0mn

Monthly Index Performance (SOFIX) 16.3%





EUR/BGN 1.96



12 Bulgaria

Bulgarian National Bank confirms its position to join T2S after Bulgaria’s Euro adoption The Bulgarian National Bank (BNB), in its capacity of being the CSD for Bulgarian government securities, has informed market participants about Target2-Securities (T2S) develop-ments.

According to the document BNB sent in mid-February:

■■ The National Bank has confirmed before ECB its position to start formal negotiations for joining the BNB’s Govern-ment Securities Settlement System to T2S once a decision for adoption of the Euro has been taken or at least upon Bulgaria’s joining the ERM II mechanism.

■■ BNB shall continue to support and monitor the T2S pro-ject, increasingly focusing on relevant European legislative initiatives.

Impact on investors BNB, continuously monitoring T2S developments, is expected to add Bulgarian government securities to the project once Bulgaria has adopted the Euro.

Written and edited by: Borislav Hitov Relationship Manager Global Securities Services, BulgariaTel. +359 2 923 2670 · [email protected]


13



Croatia

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 11,160GDP Real 2012e (Change against prev. year in %) 2.03-Month Money Market Rate (current in %) 1.1Inflation in 2012e (yearly average in %) 2.8EUR/HRK 7.59Upcoming Holidays none

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CROBEX

CRoaTIa

Value of Croatian securities grew in 2012 The market value of all 1,104 securities listed in the Central Depository and Clearing Company Inc. (SKDD) at the end of 2012 amounted to HRK 323 billion, which was 8.8% more than at the end of 2011, states SKDD’s quarterly bulletin.

Zagreb Stock Exchange indicators show that interest in shares remained virtually unchanged compared to 2011 and the value of indices was almost identical at the end of 2012 as they were in 2011. CROBIS and CROBIStr though showed a growth of 14% and 20% respectively.

Indicators show that the portion of ownership of shares by domestic private persons dropped by 1% to 7.65%. The portion of foreign ownership of shares grew by 1.69%, and 28.7% of shares at the end of 2012 were owned by foreign-ers.


Test shows Croatia’s banking sector is resilientAccording to the Central bank’s Financial Stability Bulletin, a test of the Croatian banking sector’s resilience for 2013 has shown that the existing shock-absorbers are sufficient even in case of unlikely but possible unfavourable macro-economic shocks.

The basic scenario, considered the likeliest, envisages a stag-nation of real GDP, or a growth of 0.3%, and maintaining a relatively stable exchange rate in relation to the euro.

A shock-scenario, which tests resilience to an unlikely but possible combination of shocks, envisages an average 3.6% decline of real GDP, a tougher recession in the Euro zone, worsening financing conditions for banks, and a cumulative depreciation of the kuna of 10%.

In the basic scenario, non-performing loans could account for 17.5% of all loans at the end of 2013, up from 14.05% at the end of last year. In the shock-scenario, the share of non-performing loans would jump to 25.2%.

Market Capitalisation HRK 199.9bn




SE Turnover (Zagreb SE) HRK 429.7mn

Monthly Index Performance (Crobex/ZSE) 8.5%





EUR/HRK 7.59



14 Croatia

The corporate portfolio would account for 31% of non-per-forming loans in the basic scenario and 47% in the shock-scenario.

In retail banking, consumer loans would reach 14% in the basic and 17% in the shock-scenario, while the share of non-performing housing loans would rise to 7.1% in the basic and 11.5% in the shock-scenario.

Banks’ projected net revenue in the basic scenario would grow from 2012 and be more than enough to absorb the shock of value corrections, whereas in the shock-scenario, projected net revenue would decline by 15%, while capital adequacy would decline by 2% as a result of a potential depreciation of the kuna. In the basic scenario, capital ade-quacy would rise by 2.7%.

In the shock-scenario, unless measures were taken, the capi-tal adequacy of 13 banks, accounting for 9.5% of total assets, would be below 12%, while that of five banks accounting for 2% of total assets would be below 8%.


Written and edited by: Snježana Brunc ic Relationship Manager Global Securities Services, CroatiaTel. +385 1 630 5400 · [email protected]


15



Czech

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 15,901GDP Real 2012e (Change against prev. year in %) 3.33-Month Money Market Rate (current in %) 0.21Inflation in 2012e (yearly average in %) 2.4EUR/CZK 25.47Upcoming Holidays none

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PX-50

CzECH REpUBLIC

Czech Central Securities Depository plans changes in settlement The Czech Central Securities Depository (CDCP) has estab-lished a working group for pre-matching processes as well as other changes. Specialists from UniCredit Bank Czech Republic, a.s., were invited to take part in the working group and their meetings.

The project is planned to be executed in two phases.

The first phase is preliminarily scheduled for the period of May/June 2013 and could include enhancements to the securities lending as the return of the securities should be possible in the second or third settlement cycle or the next day.

The second phase is preliminarily scheduled for the period of November/December 2013 and could include the following enhancements:

■■ A new pre-matching window should be introduced

■■ An automated uploading of instructions into the CDCP system should be available; the final confirmation should be on SD-1

■■ The introduction of a new settlement cycle at 10 a.m. at T+0

■■ A Hold/Release mechanism for pre-matching

■■ A cash tolerance should be applicable in two tiers depend-ing on the trade volume

■■ The ability to settle trades with a later effective settle-ment date (no back-valuation of settlement instructions necessary)

■■ An automated bilateral cancellation of matched trades

■■ Other important technical enhancements which have no real impact on investors but improve the environment.

The project and its details are still at a very early stage and are being discussed in depth, many of them could still be changed, cancelled or might not be fully approved.

Impact on investors Once the changes in the settlement area are finally decided, approved and implemented, the services of the Czech Central Securities Depository will improve mainly in the area of automated instructions uploading and pre-matching.

Market Capitalisation CZK 1.1trn

YTD Dev. of Market Capitalisation -2.7%

Number of SE Transactions p.m. n.a.

YTD Dev. of SE Transactions n.a.

SE Turnover (Prague SE) CZK 67.8bn

Monthly Index Performance (PX) -1.7%





EUR/CZK 25.47

Upcoming Holidays 1 April


16 Czech Republic

Czech Republic will not introduce the Financial Transaction TaxThe Czech Republic does not plan to introduce the Finan-cial Transaction Tax (FTT). The European Commission (EC) approved to introduce the 0.1% tax on shares and bonds trading and the 0.01% tax on derivatives with effect from January 2014. The reason for this tax is that banks should take their part in bearing the costs of the financial crisis. EC expects that the new FTT will generate tens of billions of Euros per year for the budgets. Eleven countries will take part.

Along with Great Britain and Sweden the Czech Republic will not introduce the tax noting the negative impact on the EU financial sector. CNB also points out that even accord-ing to EU studies FTT can negatively affect gross domestic product or reduce the volume of certain financial transactions. Moreover, experience in some countries which in the past have introduced the FTT, e.g. Sweden, was also negative. FTT will mostly impact the end clients.

Furthermore, CNB claims that the bad timing is an issue as well. The financial sector in Europe is awaiting new regula-tory measures that will require capital increases, so more financial funds should stay in the sector. Proposing to draw funds and to drain funds to and from the sector at the same time seems to be illogical and will expose financial institutions to the danger of not meeting all new regulatory and capital requirements.

While the Czech government declined FTT, the left-wing Senate recommended to the government to re-consider join-ing the FTT states. The Czech government respects the FTT countries’ decision but asks for assurances that FTT will have no impact on non-FTT countries and their EU-based banks.

It will be interesting to watch the progress in the future as the main initiator, the German Chancellor, suggested spreading the FTT challenge to all parts of the world.

Impact on investors The Czech Republic does not plan to join eleven European countries in introducing the Financial Transaction Tax in the near future. An impact on the Czech Republic is expected only for cases when trades will be done with the countries which have adopted this tax.

Written and edited by: Zbynek Oborny Relationship Manager Global Securities Services, Czech RepublicTel. +420 955 960 779 · [email protected]

Draft law regulating anonymous shares passed in the Lower HouseThe regulation of anonymous (bearer) shares could come under a new regime with the newly passed draft law. The prin-ciple of the regulation lies in the proposal that all anonymous shares issued by companies will have to be registered and booked in the central depository or stored in physical form at custodian banks, i.e. immobilised. If the mentioned changes will not be implemented by the issuers until January 2014, the physical shares will have to be registered by endorsement to the new owner’s name, otherwise shareholders cannot exercise shareholders’ rights.

The government expects to uncover corruption or money laundering cases more easily when this regulation comes into force as the records which allow identification of the share owner should be available. Czech governments have been trying to limit the anonymous shares for a long time but with no effective result up until now.

The draft law was passed in the Lower House and still has to be passed by the Senate and signed by the President; it is therefore not yet in force. The left-wing Senate has already announced its support for this draft law, moreover it would like to regulate the anonymous shares more severely pointing out the example of problematic share owner identification when a Czech company’s singular shareholder is a foreign firm based in a country in which anonymous shares are and will continue to be permitted.

The new regime should get the Czech Republic closer to the legislation in other European countries such as Germany and the newly proposed legislation in Austria.

Impact on investors The newly suggested regulation of anonymous shares in the Czech Republic should bring more transparency to the Czech market.


17



Hungary

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 11,140GDP Real 2012e (Change against prev. year in %) 3.43-Month Money Market Rate (current in %) 4.88Inflation in 2012e (yearly average in %) 3.4EUR/HUF 292.25Upcoming Holidays none

15000

15500

16000

16500

17000

17500

18000

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19000

19500

20000

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2/21/2013 4:58 PM

BUX

HUNGaRy

Hungary issued USD 3.25 billion FX government bondsBy returning to international markets after 21 months with a US dollar government bond issuance, Hungary has per-formed more than half of its FX bond issuance for this year already in February. The total EUR 5.1 billion worth of foreign exchange debt expires for Hungary this year, of which the Government Debt Management Agency (GDMA) planned to refinance EUR 4-4.5 billion through FX bond issues.

On the one hand the funding plan was well supported by the recent Premium Euro Bond issue, which targeted mainly Hun-garian households. The success of the issue is well described by that fact that over EUR 1 billion worth bonds were sold in total compared to the first issue of EUR 200-300 million. Domestic retail investors finally bought more than 10% of the bonds, while domestic institutional investors subscribed to 88%. Foreigners purchased almost 2% of the total amount.

On the other hand, following the latest international Eurobond sale in May 2011, Hungary has now sold a total worth of USD 3.25 billion of 5-year and 10-year government bonds at 335 and 345 basis points over the US benchmark yields respectively.

This issue was the second largest ever for Hungary that was closed within one day. Under these conditions and cur-rent market situation the investor interest was higher for the 10-years bonds, which offered 5.375% fixed interest, while 5-years notes yield 4.125%. The instruments were issued with two thousand US dollar denomination, and will pay inter-est twice a year in August and in February. GDMA offered the new securities primarily for the public. According to the prospectus the notes will be listed on the London Stock Exchange and also on the Berlin Stock Exchange. The pro-spectus drew the attention of the investors to the fact that the trading volume may be variable because of some negative factors and there was no guarantee for there being an active secondary market for trading in these securities.

Markets have been expecting this FX bond issuance as the Hungarian Government announced that instead of the flexible credit line that the International Monetary Fund (IMF) would not grant, Hungary would enter the international markets with government bond issuance. Also Hungary has already held investor road shows in the United States and in Europe in the past weeks to promote the possible issue and assess investors’ interest.

Market Capitalisation HUF 18,053bn




SE Turnover (Budapest SE) HUF 395,859mn

Monthly Index Performance (BUX) 6.6%





EUR/HUF 292.25



18 Hungary

The high yield offered by the new Hungarian issue attracted investors and the offer book was closed over USD 12 billion for the two maturities combined. Taking into account several factors the Hungarian Government finally issued USD 1.25 billion of the 5-year-bond and USD 2 billion of the 10-year one at an extra yield compared to the latest international issue of Hungary as well as recent issues in the region.

GDMA has announced that the total amount received from this issuance was swapped into euros, that is, the total cash-flow is now available in euro. The issue was denominated at first in USD as according to the assessment of GDMA the U.S. investors have currently a greater demand to buy non-US securities since yields of American bonds are extremely low, therefore they prefer to take higher risk and invest in higher-yield instruments. GDMA announced that in case of bond issues like this one, it is worth examining which market has the highest demand, what is the intention of investors and where the best returns can be achieved.

The size of the issue is relatively large especially because it equals 8.5% of the total FX debt of Hungary as of January 2013 and 3.4% of the gross state budget deficit and it tem-porarily increases the government debt to over 80% of the GDP from the previous 78%. Prior to the issue the average interest rate Hungary paid on FX debt was 4.5% and the average rate of the new issue is only slightly above at 4.7%.

In the current market situation it is prosperous that the Gov-ernment intends to cut debt and deficit besides favourable trade surplus and balanced risks level while the debt level is considered still too high and the growth potential of the economy stayed at a low level.

The funds that came from the latest USD bond issuance will be used for general funding purposes.

Impact on investors Hungary’s Government Debt Management Agency aims at finding FX funding possibilities by targeting different type of investors. As more than half of the FX funding plan has been completed already for 2013 it is very unlikely that Hungary would come up with new huge public issues before April 2014, when the next elections will take place.

Written and edited by: Melinda Czéh Relationship Manager Global Securities Services, HungaryTel. +36 1 301 1920 · [email protected]


19

Source: Bloomberg


Kazakhstan

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 7,608GDP Real 2012e (Change against prev. year in %) 5.53-Month Money Market Rate (current in %) 2.88Inflation in 2012e (yearly average in %) 7.1EUR/KZT 198.69Upcoming Holidays none

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950

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2/21/2013 4:58 PM

KASE

KazaKHSTaN

Private pension funds consolidated into one government-managed pension fund Following instructions given by Kazakhstan’s President Nur-sultan Abishevich Nazarbayev and the National bank together with the Ministry of Labor and Social Protection of Citizens developed a new pension scheme in Kazakhstan. Accord-ing to this scheme all private pension funds will transfer their assets to the state-owned pension fund “GNPF”. GNPF will remain the only pension fund in Kazakhstan. The custodian and asset management company for this pension fund will be the National Bank. The transition will be completed by July 1, 2013.

As Deputy Prime Minister Kelembetov commented, this does not represent a nationalisation of pension funds and it is not a return to a united pension system. The only difference from the current situation is that there will be only one pension fund which will help to reallocate investments and concentrate them inside Kazakhstan into strategic projects.

Impact on investors Consolidation of pension assets and concentration of investments in Kazakhstan will help to accelerate Kazakh-stan’s securities market development. Kazakhstan’s securi-ties market will become more active, liquid and attractive for international investors.

Written and edited by: Zhanat Aktaeva Relationship ManagerGlobal Securities Services, KazakhstanTel. +7 727 258 30 15 · [email protected]

Market Capitalisation KZT 10,998.9bn




SE Turnover (KASE) KZT 8.7bn

Monthly Index Performance (KASE) 1,114.1





EUR/KZT 198.69



20


KyRGyzSTaN

Business activity in Kyrgyzstan’s marketFor the first time housing certificates LLC “Ground House” were available in the primary market in Kyrgyzstan. Volume of placement was 0.03 million KGS, one certificate sold at a price of 33,027.50 KGS. The total issue was of 2,200 hous-ing certificates, the nominal value was 33,000 KGS, and the yield is 15%.


Written and edited by: Zhanat Aktaeva Relationship ManagerGlobal Securities Services, KazakhstanTel. +7 727 258 30 15 · [email protected]

Market Capitalisation KGS 9,787.6mn


Number of SE Transactions p.m. 144


SE Turnover (KSE) KGS 254.2mn

Monthly Index Performance (KSE) 280.9

GDP per Capita (2012 in EUR) 1,045.81




EUR/KGS 64.20



21



Poland

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 11,027GDP Real 2012e (Change against prev. year in %) 3.93-Month Money Market Rate (current in %) 3.94Inflation in 2012e (yearly average in %) 3.7EUR/PLN 4.16Upcoming Holidays none

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2600

2700

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2/21/2013 4:58 PM

WIG-20

poLaNd

WSE formally accepts UTP systemOn February 21, 2013 WSE formally accepted the new trad-ing system, the Universal Trading Platform, (UTP) which is to replace the old one, WARSET, which has been working since November 17, 2000 as a quotation system on the Warsaw Exchange. By this decision, WSE has announced the suc-cessful completion of the acceptance process of the trading system UTP following a series of tests. The completion of this stage of the project means that the new trading system has entered the last phase of preparations before the migration from WARSET to UTP. At this stage of implementing UTP it has become possible to determine the date of the first day of trading on a new trading system. WSE has confirmed April 15, 2013 as the date of the first day of availability of the new technology in trading on the Polish capital market by launching the Universal Trading Platform.

Universal Trading Platform is a trading system of the highest global standards acquired by the Warsaw Stock Exchange from NYSE Technologies. It is currently used by NYSE Euronext Group exchanges in New York, Paris, Lisbon, Amsterdam and Brussels. Thanks to this new system, WSE will assure access to the Polish capital market for international investors and brokers that have already been familiar with NYSE technologies on the world’s biggest markets.

Compared to WARSET, the new Universal Trading Platform offers more speed, efficiency, scalability and throughput, which means that many more orders can be sent within the same amount of time. At the same time, the response time to a sent order will be reduced to microseconds. With UTP, the Warsaw Exchange and the Polish capital market will open up to new categories of investors, including users of high frequency trading and high volume trading taking advantage of advanced algorithms. This will improve liquidity and reduce the cost of trading for all investors.

Market Capitalisation PLN 520.7bn




SE Turnover (WSE) PLN 30.5bn

Monthly Index Performance (WIG20) -3.5%

Monthly Index Performance (WIG) -1.3%





EUR/PLN 4.16



22 Poland

The migration from WARSET to UTP will concern all instru-ments currently traded in WARSET, i.e. all instruments listed on the Main Market and NewConnect, and debt instruments on Catalyst, that are currently traded in WARSET, will be car-ried out on UTP finally. Instruments currently traded on the BondSpot platform will continue to be traded on this platform.

Impact on investors UTP will offer a broader range of functionalities and allow trading in instruments in new market segments dedicated to specific product groups (e.g. warrants and structured products). Individual investors will benefit from new trad-ing opportunities thanks to new types of orders and their validities.

Written and edited by: Marta Boboryk Relationship Manager Global Securities Services, PolandTel. +48 22 2545861 · [email protected]


23



Romania

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 6,624GDP Real 2012e (Change against prev. year in %) 3.43-Month Money Market Rate (current in %) 5.46Inflation in 2012e (yearly average in %) 3.7EUR/RON 4.38Upcoming Holidays none

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2/21/2013 4:58 PM

BET

RoMaNIa

NBR keeps monetary policy rate unchanged The National Bank of Romania decided to keep the monetary policy rate at 5.25% and the minimum required reserves ratios for both RON and FX liabilities at 15% and 20% respectively (in line with expectations).

The NBR’s contrasts the CEE rate cutting trend. The decision is sustained by the fact that inflation is expected to remain high for some time, not entering the target band at the end of 2013.


Changes to the 2013 Romanian Fiscal Code The Romanian Fiscal Code was amended and starting Feb-ruary 1, 2013 there will be a tax rate of 50% for incomes derived on dividends from a resident, interest from a resident, royalties, commissions, services performed in Romania and abroad and income from independent personal services per-formed in Romania, if these revenues are paid to accounts opened in countries with which Romania has not concluded DTT(s) or other instrument on information exchange.

Apart from the DTT signed by Romania and published on our web site, the agreement on the exchange of information in tax matters concluded with Guernsey is in force; also Romania has implemented EU Directive 2011/16/EU on administrative cooperation in the field of taxation, which will be applied as of July 1, 2013.

Impact on investors The new withholding tax rate of 50 % will be applicable for income paid to a country with which Romania does not have a signed legal instrument for exchanging information.

Market Capitalisation RON 101bn

YTD Dev. of Market Capitalisation 23%



SE Turnover (Bucharest SE) RON 574mn

Monthly Index Performance (BET/BSE) 6.4%





EUR/RON 4.38


Written and edited by: Andreea Albu GSS Relationship Manager Global Securities Services, RomaniaTel. +40 21 200 2678 · [email protected]

and: Iuliana Manastireanu GSS Account Manager Global Securities Services, RomaniaTel. +40 21 200 1494 · [email protected]


24



Russia

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 9,520GDP Real 2012e (Change against prev. year in %) 4.13-Month Money Market Rate (current in %) 6.55Inflation in 2012e (yearly average in %) 7.5EUR/RUB 40.21Upcoming Holidays none

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2/21/2013 4:58 PM

RTS

RUSSIa

Central Bank of Russia to exit Moscow Exchange within two yearsIn February 2013 the Russian President Vladimir Putin has approved the Central Bank’s plan to withdraw the Moscow Exchange’s share capital within two years.

Currently the Central Bank of Russia (CBR) owns 22.474% of the Moscow Exchange. According to official information CBR did not participate in the recent IPO of the Exchange.

In accordance with the shareholder agreement none of the current shareholders are entitled to exit the Moscow Exchange within 6 months after IPO. Therefore the actions of the CBR with respect to the Exchange’s shares portfolio shall not be initiated earlier than in 6 months’ time and shall be completed in two years.

Impact on investors CBR’s plans to exit the Moscow Exchange shall contribute to greater flexibility of the decision making process.

FFMS and NSD signed an Agreement on Information ExchangeThe National Settlement Depository (NSD) has concluded an agreement on information exchange with the Russian Federal Financial Markets Service (FFMS).

According to the agreement FFMS will provide to the NSD information regarding Russian issuers and securities issues as follows: data related to decisions on the registration of the issue of equity securities, information about releasing an issuer from the duty to disclose information, information about cancellation and suspension of a license of a profes-sional securities market participant.

NSD will submit to FFMS information about the placement and the redemption of the bonds, including exchange-traded bonds, data related to the assignment and withdrawal of ISIN codes and information about daily results in respect of forth-coming material facts and material facts already undertaken by NSD, including corporate actions.

Impact on investors The agreement between FFMS and NSD shall contribute to a faster exchange of information between the regulator and the securities market infrastructure.

Market Capitalisation RUB 24trn


Number of SE Transactions p.m. (MICEX) 6,060,254


SE Turnover (MICEX) RUB 35trn

Monthly Index Performance (MICEX) 108.0%





EUR/RUB 40.21



25 Russia

Written and edited by: Evgenia Klimova Head of Product and Business Development Global Securities Services, RussiaTel. +7 495 232 5298 · [email protected]

Foreign investments into SME liberalisedThe Ministry of Economic Development (MED) of Russia has prepared a draft amendment to the law “On development of small and medium-sized enterprises”, which is to abolish limitations on foreign individual persons’ investments into small and medium-sized enterprises.

According to the current legislation a company with more than 25% of shares held by a foreign entity or individual person is not considered a small or medium-sized enter-prise and therefore cannot benefit from the preferences in this sector of the economy. MED suggests abolishing such limitations with respect of foreign individual persons. The rules which currently apply to foreign corporate investors shall remain unchanged.

MED expects that this legislation update will contribute to the development of the SME sector, and innovative companies especially.

Impact on investors The proposed amendments shall partially liberalise foreign investments in the SME market in Russia.

NSD commenced repository servicesThe National Settlement Depository (NSD) announced that starting from the February 6, 2013 the NSD commenced to act as a repository for OTC derivatives transactions. Currently repository services apply only to two types of the transac-tions: currency swaps and REPO.

The repository concept was introduced in Russia upon adop-tion of the Law “On Clearing and clearing activity” (Nr. 7-FZ dated February 7, 2011), which introduced close-out netting.

In accordance with FFMS’s regulations the repository activity does not require any special license and can be executed by any company that passes the application process by FFMS.

The NSD is the first repository on the Russian securities market.

Impact on investors The repository launch represents a significant development of the Russian securities market, aiming to reduce the participants’ mutual risks of derivatives transactions.


26

Market Capitalisation RSD 799bn




SE Turnover (Belgrade SE) RSD 12.4bn

Monthly Index Performance (Belex 15) 8.8%





EUR/RSD 111.34


Source: Bloomberg


Serbia

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 4,546GDP Real 2012e (Change against prev. year in %) 3.53-Month Money Market Rate (current in %) 11.04Inflation in 2012e (yearly average in %) 6.7EUR/RSD 111.34Upcoming Holidays none

400

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2/21/2013 4:58 PM

BELEX15

SERBIa

Year-on-year inflation continues rising in January 2013According to the National Bank of Serbia sources year-on-year inflation increased to 12.8% in January. It is expected that inflation will continue rising over the upcoming months as the result of the hike in administered prices and the low base effect. In the second half of the year the year-on-year inflation is expected to start decreasing and revert to the target level of 4% plus or minus 1.5 percentage points.


Written and edited by: Aleksandra Ilijevski Senior Relationship Manager Global Securities Services, SerbiaTel. +381 11 3028 612 · [email protected]


27

Market Capitalisation EUR 63.1bn


Number of SE Transactions p.m. 1,254.0


SE Turnover (Bratislava SE) EUR 0.7bn

Monthly Index Performance (SAX/BSSE) -2.5%








Slovakia

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 14,073GDP Real 2012e (Change against prev. year in %) 4.53-Month Money Market Rate (current in %) -Inflation in 2012e (yearly average in %) 3.7EUR/SKK -Upcoming Holidays none

170

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2/21/2013 4:58 PM

SAX

SLovaK REpUBLIC

SDX Group bond index base revision A regular revision of the base composition of the SDXG indi-ces within the SDX Group was made on January 29, 2013 in compliance with the Rules of the SDX Group Construction. The Commission met in order to set the base composition of the indices for the forthcoming six-month period, that is from February to July 2013.

When making decisions on keeping, including or excluding registered bond issues in/from the base of the SDXG indices as of the day of the revision, the Commission evaluates each single listed issue independently according to the current rules of SDX Group index construction.

Based on the above-mentioned criteria the Commission decided to leave the actual base composition of the SDXG indices in validity for the next six-month period.



28 Slovak Republic

Bratislava Stock Exchange trading overview January In the first month of the year 2013, the electronic trading system of the Bratislava Stock Exchange (BSSE) was acces-sible to members on 22 business days. A total of 1,254 trans-actions were concluded in this period, in which 525,753,832 units of securities were traded and the achieved financial volume totalled EUR 673.02 million. In comparison with the previous month this represents an increase in the number of concluded transactions (+20.81%), in the amount of traded securities (+32.45%) as well as in the achieved financial volume (+54.27%).

On a year-on-year basis, however, all three indicators recorded a decrease: the number of transactions fell by 8.27%, the achieved financial volume went down by 24.67% and the amount of traded securities decreased by nearly 31.7%. Similar to previous months, January 2013 saw negotiated deals dominate over electronic order book transactions (i.e. price-setting deals), with the former accounting for as much as 98.44% of the total trading volume. A total of 195 negoti-ated deals (in a volume of EUR 662.5 million) were concluded, as opposed to 1,059 electronic order book transactions in a financial volume of EUR 10.52 million.

Investors continued to prefer investments in debt securities in January 2013, as bond transactions generated over 98.59% of the achieved volume. A total of 318 bond transactions were concluded in the period under review, in which 525,479,673 units of securities changed hands and the financial volume exceeded EUR 663.52 million. In comparison with December 2012, this represents an increase in the amount of traded securities (+32.42%), in the number of concluded transac-tions (+40.71%) as well as in the achieved financial volume (+52.94%). All three indicators decreased on a year-on-year basis: the number of transactions fell by 1.55%, the achieved financial volume decreased by 25.47% and the amount of traded securities dropped by 31.71%. Continuing the long-lasting trend, negotiated transactions in bonds (in a financial volume of EUR 658.51 million) again significantly dominated over electronic order book transactions (in a volume of EUR 5.01 million).

Written and edited by: Rastislav Rajninec Relationship Manager Global Securities Services, Slovak RepublicTel. +421 2 4950 2424 · [email protected]

Transactions concluded by non-residents in January 2013 accounted for 54.80% of the total trading volume, out of which the buy side represents 49.06% and the sell side 60.55%.

The SAX index ended the month of January 2013 at 187.49 points, representing a 2.45-percent decrease on a month-on-previous-month basis and a 10.42-percent decrease year on year.



29

Market Capitalisation EUR 17,549mn




SE Turnover (Ljubljana SE) EUR 40,214mn

Monthly Index Performance (SBI TOP) 0.4%








Slovenia

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 19,532GDP Real 2012e (Change against prev. year in %) 2.83-Month Money Market Rate (current in %) 0.17Inflation in 2012e (yearly average in %) 2.9EUR/RSD -Upcoming Holidays none

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2/21/2013 4:58 PM

SBI TOP

SLovENIa

Slovenian banks posted EUR 664 million loses The Bank of Slovenia announced in a statement that unau-dited combined pre-tax losses of Slovenian domestic banks were EUR 664 million in 2012. The main cause for this loss is the deterioration of the credit portfolio, which is the reason why impairments and provisions rose by 23% in 2012.

Total assets of banks decreased by EUR 3.1 billion last year. This can be attributed to deleveraging on international mar-kets, which reached EUR 3.6 billion last year or 10% of GDP.

Because of economic and political uncertainties the demand for crediting is falling. Additional concerns for households are raising unemployment and the uncertain situation on the real-estate market, which undermined their credit activity.

The Bank of Slovenia also noted that this year’s poor eco-nomic growth forecast increases the risk of further deteriora-tion in the quality of bank portfolios and of new losses in the banking system. Therefore, economic policies should focus on creating conditions for economic growth, which is neces-sary for the process of urgently needed financial restructuring of companies and improved funding condition for banks.


Written and edited by: Elmedina Garibovic Relationship Manager Global Securities Services, SloveniaTel. +386 1 587 65 97 · [email protected]


30

Market Capitalisation (PFTS) UAH 171.6bn

YTD Dev. of Market Capitalisation (PFTS) 2.2%

Number of SE Transactions p.m. (PFTS) 47,307

YTD Dev. of SE Transactions (PFTS) -8.7%

SE Turnover (PFTS) UAH 0.5bn

Monthly Index Performance (PFTS) 2.4%





EUR/UAH 10.73




Ukraine

Market Capitalisation HRK 397.2 bnYTD Dev. of Market Capitalisation 2.307Number of SE Transactions p.m. 96000YTD Dev. of SE Transactions 7.107SE Turnover (Zagreb SE) HRK 5977.5 mnMonthly Index Performance (Crobex/ZSE) 0.017GDP per Capita (2012e in EUR) 3,285GDP Real 2012e (Change against prev. year in %) 5.03-Month Money Market Rate (current in %) 7.75Inflation in 2012e (yearly average in %) 10.4EUR/UAH 10.73Upcoming Holidays none

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2/21/2013 4:58 PM

PFTS

UKRaINE

Bond holders to receive new rightsThe government of Ukraine initiated a draft law for Parlia-ment’s consideration on amendments to the law on securities and the stock market concerning the development of the bonds market. The draft law was prepared by the market regulator National Securities and Stock Market Commission (NSSMC).

The main goal of the document is to give bond holders the possibility to control defaults on corporate bonds of Ukrain-ian companies.

The draft law gives a definition of the concept of default on bonds, which is the non-fulfilment or improper fulfilment of an issuer’s obligations to bond holders with regard to the redemption and income payment on its bonds. Payment is considered outstanding if it is not made on the 10th day after the date of payment, which is stated in the prospectus of the issue.

As soon as default on bonds is noted, investors may claim for early redemption. According to the new Amendments early redemption in this case may be not only voluntary but also mandatory, and there will be no need to initiate a bankruptcy procedure for it.

Bond holders may act separately or jointly through the meet-ing of corporate bonds holders. This joint action has essential advantages, after the meeting convenes an issuer should coordinate with it all major deals, including foreign economic contracts and big purchase contracts for its own needs.

According to market experts the meeting of the corporate bond holders as an institution will minimise the risk of erosion of the capital and enhance protection of the bond holders’ rights.

Currently there is no definition of the ”default on bonds” in Ukrainian legislation, therefore the regulator is not informed about non-payments and does not maintain statistics on such defaults. Statistics are being maintained only by rating agencies which do rate securities but only of their clients.

It is expected that the Amendments to the Law will be adopted by Parliament by summer.

Impact on investors Enhancement of the protection of corporate bond holders’ rights.

Written and edited by: Katherine Yevtushenko Relationship Manager Global Securities Services, UkraineTel. +38 044 590 1210 · [email protected]


31

azERBaIJaN

AZERBAIjAn

Azerbaijan State Securities Committee studies Polish experienceThe State Securities Committee of Azerbaijan (SSC) held consultations with the Polish Agency for Financial Supervision on 21-25 January 2013 in Baku.

Consultations took place within the dual project “Bringing Azerbaijan’s securities legislation in compliance with the laws of the European Union (EU) and institutional development” and helped the SSC to study Poland’s experience in applica-tion of the EU directives on transparency on the securities market and assess the applicability of these directives in the Azerbaijani legislation.

The project started in October 2012 and should continue until May 31, 2014.

The project consists of three components: support and advice on the development of cooperation, improvement of regulation and supervision skills and awareness of the market participants.

The main areas of the legislation, which will be in line with EU norms are: the requirements for transparency and provi-sion of the information to companies registered at the stock exchange, prospectus of the issuers of shares and debt instruments, securitisation, merger and acquisition of compa-nies, purchase of a controlling stock of shares, reorganisation of corporations and respect for the rights of shareholders, the sale of shares on the stock market and the division of powers between the relevant regulatory authorities.

Impact on investors The experience of foreign players will provide an opportu-nity to improve Azerbaijan’s securities legislation, which will stimulate the investment attractiveness of the securities market for foreign investors.

Written and edited by: Evgenia Klimova Head of Product and Business Development Global Securities Services, RussiaTel. +7 495 232 5298 · [email protected]


32

yoUR CoNTaCTS

Central TeamTomasz Grajewski Tel. +48 22 524 5867 [email protected]

Sven Trahan Tel. +43 50505 57311 [email protected]

Michael Slavov Tel. +43 50505 58511 [email protected]

Evelyne Wininger Tel. +43 50505 42788 [email protected]

Philipp Aschl Tel. +43 50505 58508 [email protected]

Pawel Muszalski Tel. +43 50505 57315 [email protected]

Markus Winkler Tel. +43 50505 58547 [email protected]

AustriaUniCredit Bank Austria AG Julius Tandler-Platz 3 A-1090 Vienna Austria

Günter Schnaitt Tel. +43 50505 58501 [email protected]

Thomas Rosmanitz Tel. +43 50505 58515 [email protected]

Tina Fischer Tel. +43 50505 58512 [email protected]

Stephan Hans Tel. +43 50505 58513 [email protected]

Bosnia and HerzegovinaUniCredit Bank d.d. Zelenih beretki 24 71 000 Sarajevo Bosnia and Herzegovina

Lejla Sabljica Tel. +387 33 491 777 [email protected]

Amra Tela c evic Tel. +387 33 491 816 [email protected]

Belma Kovac evic Tel. +387 33 491 810 [email protected]

BulgariaUniCredit Bulbank AD 6 Vitosha Boulevard, 2nd floor BG-1000 Sofia Bulgaria

Veselin Stefanov Tel. +359 2 923 2818 [email protected]

Borislav Hitov Tel. +359 2 923 2670 [email protected]

CroatiaZagrebacka Banka d.d. Savska 62 HR-10000 Zagreb Croatia

Valerija Bezak Tel. +385 1 6305 430 [email protected]

Snjez ana Brunc ic Tel. +385 1 6305 400 [email protected]


33 Your Contacts

Czech RepublicUniCredit Bank Czech Republic a.s. Zeletavska 1525/1 CZ-140 92 Prague 4 Czech Republic

Michal Stuchlík Tel. +420 955 960 780 [email protected]

Tomáš Vácha Tel. +420 955 960 777 [email protected]

Zbynek Oborny Tel. +420 955 960 779 [email protected]

Alena Kalasova Tel. +420 955 960 778 [email protected]

HungaryUniCredit Bank Hungary Zrt. Szabadsag ter 5 – 6, 6th floor H-1054 Budapest Hungary

Júlia Romhányi Tel. +36 1 301 1923 [email protected]

Lívia Mészáros Tel. +36 1 301 1921 [email protected]

Barbara Rubint Tel. +36 1 301 1914 [email protected]

KazakhstanJSC ATF Bank Furmanov Street 100 KZ-050000 Almaty Kazakhstan

Vladimir Vassilyev Tel. +7 727 258 3015 (2031) [email protected]

Saida Abdraimova Tel. +7 727 258 3015 (1263) [email protected]

PolandBank Polska Kasa Opieki SA 31 Zwirki i Wigury Street PL-02-091 Warsaw Poland

Tomasz Grajewski Tel. +48 22 524 5867 [email protected]

Mariusz Pie kos Tel. +48 22 524 5852 [email protected]

Kamil Polak Tel. +48 22 524 5863 [email protected]

Marta Boboryk Tel. +48 22 524 58 61 [email protected]

Krzysztof Pekrul Tel. +48 22 524 5864 [email protected]

Marek Cioroch Tel. +48 22 524 5862 [email protected]

RomaniaUniCredit Tiriac Bank S.A. 1F, Expozitiei Blvd. RO-012101, Bucharest 1 Romania

Irina Savastre Tel. +40 21 200 2670 [email protected]

Viviana Traistaru Tel. +40 21 200 2673 [email protected]

Andreea Albu Tel. +40 21 200 2678 [email protected]


34 Your Contacts

RussiaZAO UniCredit Bank 9, Prechistenskaya Emb. RU-119034 Moscow Russian Federation

Alexander Nazarov Tel. +7 495 258 73 49 [email protected]

Ksenia Liskina Tel. +7 495 258 7258 – 3455 [email protected]

Svetlana Vlasova Tel. +7 495 258 7258 – 3453 [email protected]

Evgenia Klimova Tel. +7 495 232 5298 [email protected]

SerbiaUniCredit Bank Serbia JSC Omladinskih Brigada 88 RS-11070 Belgrade Serbia

Jasmina Radic evic Tel. +381 11 3028 611 [email protected]

Aleksandra Ilijevski Tel. +381 11 3028 612 [email protected]

Goran Platiša Tel. +381 11 3028 687 [email protected]

SlovakiaUniCredit Bank Slovakia A.S. Sancova 1/A SK-811 04 Bratislava Slovak Republic

Zuzana Milanová Tel. +421 2 4950 3702 [email protected]

Rastislav Rajninec Tel. +421 2 4950 2424 [email protected]

SloveniaUniCredit Bank Slovenija d.d. Wolfova 1 SI-1000 Ljubljana Slovenia

Vanda Moc nik-Kohek Tel. +386 1 5876 450 [email protected]

Elmedina Garibovic Tel. +386 1 5876 597 [email protected]

Aljoša Benc ina Tel. +386 1 5876 451 [email protected]

UkrainePJSC UniCredit Bank 14a, Yaroslaviv Val UA-01034 Kyiv Ukraine

Bohdana Yefremova Tel. +380 44 230 3341 [email protected]

Katherine Yevtushenko Tel. +380 44 590 1210 [email protected]

Websitesgss.unicreditgroup.eu www.gtb.unicredit.eu www.unicreditgroup.eu www.bankaustria.at


35

dISCLaIMERThis publication is presented to you by:Corporate & Investment BankingUniCredit Bank Austria AGJulius Tandler-Platz 3A-1090 Wien

The information in this publication is based on carefully selected sources believed to be reliable. However we do not make any representation as to its accuracy or completeness. Any opinions herein reflect our judgement at the date hereof and are subject to change without notice. Any invest-ments presented in this report may be unsuitable for the investor depend-ing on his or her specific investment objectives and financial position. Any reports provided herein are provided for general information purposes only and cannot substitute the obtaining of independent financial advice. Pri-vate investors should obtain the advice of their banker/broker about any investments concerned prior to making them. Nothing in this publication is intended to create contractual obligations. Corporate & Investment Banking of UniCredit Group consists of UniCredit Bank AG, Munich, UniCredit Bank Austria AG, Vienna, UniCredit S.p.A., Rome and other members of the UniCredit Group. UniCredit Bank AG is regulated by the German Financial Supervisory Authority (BaFin), UniCredit Bank Austria AG is regulated by the Austrian Financial Market Authority (FMA) and UniCredit S.p.A. is regulated by both the Banca d’Italia and the Commissione Nazionale per le Società e la Borsa (CONSOB).

note to UK Residents:

In the United Kingdom, this publication is being communicated on a confiden-tial basis only to clients of Corporate & Investment Banking of UniCredit Goup (acting through UniCredit Bank AG, London Branch) who (i) have professional experience in matters relating to investments being investment professionals as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (“FPO”); and/or (ii) are falling within Article 49(2) (a) – (d) (“high net worth companies, unincorporated associations etc.”) of the FPO (or, to the extent that this publication relates to an unregulated collective scheme, to professional investors as defined in Article 14(5) of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 and/or (iii) to whom it may be lawful to communicate it, other than private investors (all such persons being referred to as “Relevant Persons”). This publication is only directed at Relevant Persons and any investment or investment activity to which this publication relates is only available to Relevant Persons or will be engaged in only with Relevant Persons. Solicitations resulting from this publication will only be responded to if the person concerned is a Relevant Person. Other persons should not rely or act upon this publication or any of its contents.

The information provided herein (including any report set out herein) does not constitute a solicitation to buy or an offer to sell any securities. The information in this publication is based on carefully selected sources believed to be reliable but we do not make any representation as to its accuracy or completeness. Any opinions herein reflect our judgement at the date hereof and are subject to change without notice.

We and/or any other entity of Corporate & Investment Banking of UniCredit Group may from time to time with respect to securities mentioned in this publication (i) take a long or short position and buy or sell such securities; (ii) act as investment bankers and/or commercial bankers for issuers of such securities; (iii) be represented on the board of any issuers of such securi-ties; (iv) engage in “market making” of such securities; (v) have a consulting relationship with any issuer. Any investments discussed or recommended in any report provided herein may be unsuitable for investors depending on their specific investment objectives and financial position. Any information provided herein is provided for general information purposes only and cannot substitute the obtaining of independent financial advice.

UniCredit Bank AG, London Branch is regulated by the Financial Services Authority for the conduct of business in the UK as well as by BaFIN, Germany.

Notwithstanding the above, if this publication relates to securities subject to the Prospectus Directive (2005) it is sent to you on the basis that you are a Qualified Investor for the purposes of the directive or any relevant implement-ing legislation of a European Economic Area (“EEA”) Member State which has implemented the Prospectus Directive and it must not be given to any person who is not a Qualified Investor. By being in receipt of this publication you under-take that you will only offer or sell the securities described in this publication in circumstances which do not require the production of a prospectus under Article 3 of the Prospectus Directive or any relevant implementing legislation of an EEA Member State which has implemented the Prospectus Directive.

note to US Residents:

The information provided herein or contained in any report provided herein is intended solely for institutional clients of Corporate & Investment Banking of UniCredit Group acting through UniCredit Bank AG, New York Branch and UniCredit Capital Markets, Inc. (together “UniCredit”) in the United States, and may not be used or relied upon by any other person for any purpose. It does not constitute a solicitation to buy or an offer to sell any securities under the Securities Act of 1933, as amended, or under any other US federal or state securities laws, rules or regulations. Investments in securities discussed herein may be unsuitable for investors, depending on their specific investment objectives, risk tolerance and financial position.

In jurisdictions where UniCredit is not registered or licensed to trade in securi-ties, commodities or other financial products, any transaction may be effected only in accordance with applicable laws and legislation, which may vary from jurisdiction to jurisdiction and may require that a transaction be made in accord-ance with applicable exemptions from registration or licensing requirements.

All information contained herein is based on carefully selected sources believed to be reliable, but UniCredit makes no representations as to its accuracy or completeness. Any opinions contained herein reflect UniCredit’s judgement as of the original date of publication, without regard to the date on which you may receive such information, and are subject to change without notice.

UniCredit may have issued other reports that are inconsistent with, and reach different conclusions from, the information presented in any report provided herein. Those reports reflect the different assumptions, views and analytical methods of the analysts who prepared them. Past performance should not be taken as an indication or guarantee of further performance, and no represen-tation or warranty, express or implied, is made regarding future performance.

UniCredit and/or any other entity of Corporate & Investment Banking of Uni-Credit Group may from time to time, with respect to any securities discussed herein: (i) take a long or short position and buy or sell such securities; (ii) act as investment and/or commercial bankers for issuers of such securities; (iii) be represented on the board of such issuers; (iv) engage in “market-making” of such securities; and (v) act as a paid consultant or adviser to any issuer.

The information contained in any report provided herein may include forward-looking statements within the meaning of US federal securities laws that are subject to risks and uncertainties. Factors that could cause a company’s actual results and financial condition to differ from its expectations include, without limitation: Political uncertainty, changes in economic conditions that adversely affect the level of demand for the company’s products or services, changes in foreign exchange markets, changes in international and domestic financial markets, competitive environments and other factors relating to the foregoing. All forward-looking statements contained in this report are qualified in their entirety by this cautionary statement.

This product is offered by UniCredit Bank Austria AG who is solely responsible for the Product and its performance and/or effectiveness. UEFA and its affili-ates, member associations and sponsors (excluding UniCredit and UniCredit Bank Austria AG) do not endorse, approve or recommend the Product and accept no liability or responsibility whatsoever in relation thereto.

Corporate & Investment BankingUniCredit Bank Austria AG, Vienna

as of 29 August 2011


36

IMpRINT

Statement pursuant to the Austrian Media Act Publisher and Media Owner

Corporate & Investment Banking Global Transaction Banking UniCredit Bank Austria AG Global Securities Services Julius Tandler-Platz 3 A-1090 Vienna Tel. +43 50505 0

Information requirements pursuant to the Austrian E-Commerce Act

Registered office and postal address Schottengasse 6 – 8 A-1010 Vienna

Swift: BKAUATWW Austrian bank code: 12000

Registered under no. FN 150714p Companies Register at the Commercial Court Vienna

Kind of business Credit institution under section 1 (1) Austrian Banking Act

Supervisory authority Austrian Financial Market Supervisory Authority (Finanzmarktaufsicht), departments banking supervision and securities supervision Otto-Wagner-Platz 5 A-1090 Vienna www.fma.gv.at

Membership Austrian Federal Economic Chamber, bank and insurance division Wiedner Hauptstraße 63 A-1040 Vienna www.wko.at Austrian Bankers’ Association Boersegasse 11 A-1010 Vienna www.voebb.at

Applicable legal regulations Applicable legal regulations are in particular the Austrian Banking Act (“Bankwesengesetz – BWG”, Federal Law Gazette/BGBl. No. 532/1993, with some amendments), the Austrian Securities Supervision Act (“Wertpapieraufsichtsgesetz – WAG”, Federal Law Gazette/BGBl. No. 753/1996, with some amendments) an the Austrian Savings Banks Act (“Sparkassengesetz”, Federal Law Gazette/BGBl. No. 64/1979, with some amendments).

VAT identification number ATU 51507409

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