GSS NEWSLETTER

GSSNEWSLETTERISSUE 113September 2010

Issue 113, September 2010

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CoNTENTDEaR CLIENTS 4JoHN'S CoRNER 5aUSTRIa 6BT Asset Management Launches Licensing Procedure for a Passively 6

BELaRUS 7Belarus placed Eurobonds 7Belarus plans sovereign bonds issue on MICEX 7National Bank reduced refinancing rate 7

BoSNIa aND HERzEGovINa 8Bosnia and Herzegovina records an Increase of SWIFT Messages 8

BULGaRIa 10Established Link between UniCredit Bulbank and Polish Depositary Yields First Results 102010 Ranking of Finance Central Europe: UniCredit Bulbank is the strongest bank in Bulgaria by capital and assets 11The Bulgarian Stock Exchange Continues to Develop Its Internet Site 11

CRoaTIa 12Stress test shows Croatia banking sector is stable 12Banks in Croatia generated combined profit of HRK 2.2 bn 12

CzECH REpUBLIC 13CNB adjusts market-support operations introduced during crisis 13CNB keeps interest rates unchanged 14

HUNGaRy 15Effect of Suspension of IMF Talks is Considered Only Temporary by the Hungarian Prime Minister 15New Opportunities on the Budapest Stock Exchange 15

KazaKHSTaN 16Fitch upgrades ratings of Kazakhstan’s Alliance Bank after the completion of restructuring 16

poLaND 17New regulations on disclosure requirements in terms of banking and insurance sector – reporting aspect 17

RomaNIa 19Economy 1924% VAT was approved by the Senate 19Central Bank 20


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RUSSIa 21MICEX plans IPO 21MICEX Stock Exchange working out the rules for trading robots 21Prime Minister proposed new rules for additional share issues registration 22FAS plans to amend the legislation on foreign investors 22New rules for Investment funds 22

SERBIa 23Country GDP Growth Flash Estimate 23

SLovaK REpUBLIC 24Bratislava Stock Exchange Trading in July 24Absolute protection of bank deposits to be cancelled 25Revision of SAX Index Base – Correction of BSSE Announcement published on 12 July 25

SLovENIa 26Annual Inflation at 2.1% – Deflation at monthly level 26D&B Says Decline in Slovenia’s GDP Slowing Down 27

UKRaINE 28State Securities and Stock Market Commission of Ukraine to launch campaign against junk shares 28

yoUR CoNTaCTS 29DISCLaImER 32ImpRINT 33


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DEaR CLIENTS

Jasmina Radicevic (Head of GSS Serbia)

It is my great pleasure to present to you UniCredit Bank Serbia and recent Serbian capital market developments in the September edition of our GSS Newsletter.

This month is an important milestone for the Belgrade Stock Exchange as trading of shares of the national oil producer Naftna Industrija Srbije (NIS) commenced on 30 August. The listing of NIS, 51% of whose capital is owned by the Russian energy giant Gazprom, represents a long awaited strengthen-ing of the Belgrade Stock Exchange prime market, and an important, positive signal for investors. The listing came as a result of the recent changes to the Share Giveaway Law and Privatization Agency Law. By introducing these changes the Government has created the legal framework for transforming the remaining state owned companies to open joint stock companies and their future inclusion to stock exchange list-ing. Furthermore, the creation of the Share Giveaway Plan allows for the distribution of a portion of shares of state owned companies to Serbian citizens as “free” shares. Apart from the previously mentioned NIS, this plan shall include some of the biggest Serbian companies: the telecommunication company Telekom Srbija, the Airport Nikola Tesla and the power company Elektroprivreda Srbije (EPS).

UniCredit Bank Serbia continues to see significant opportuni-ties for both the country and its clients and is committed to their success.

From the beginning of the development of the Serbian capital market, UniCredit Bank Serbia has recognized the needs of its clients for quality securities services, which resulted in the creation of the first custody bank in Serbia. Now UniCredit Bank Serbia represents the leading custody bank in the market, committed to providing top service to both inter-national and domestic investors. Apart from the trust the international institutional investors keep granting to UniCredit GSS team, its dominance in securities services business has been recognized also by the domestic investors. In 2006 and 2007, the years of the establishment of the Serbian pen-sion and investment funds industry, UniCredit Bank Serbia was awarded with contracts for custody services for the first established funds. The trust our clients have awarded us with is a constant driver for our GSS team to continuously increase the quality of our service and provide our clients with solutions made specifically for their business.

The full potential of the Serbian market infrastructure is yet to be achieved, and we take our responsibility towards our clients very seriously. A very important aspect of this respon-sibility is the representation of our clients and their needs in the market, to aid the development of a friendly and uncom-plicated investing environment. We have discussed proposals for significant improvements with the regulator and with other market participants, and these should be taken into consid-eration when the Government sets up new laws aiming at shifting Serbian market towards MiFID and EU regulations.

I would like to take this opportunity to thank all of our clients for being with us in the previous years. We stay committed to the growth of this market and our partnership in 2010.

Best regards,

Jasmina RadicevicHead of GSS Serbia


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JoHN'S CoRNER

John Gubert

Within the current, proposed mass of directives and changes to European securities regulation, there is much debate as to the role of a depository. Specifically, there is a growing view, at least within the European Commission, that inves-tors should be protected against custodian default. The last time this issue had such traction was in the US, when there was debate about the scope of change needed to US SEC 17.5. Some of the more extreme suggestions were then seen off by US custodians; quite simply, it is believed, they explained they could not remain in the business if the risks became excessive.

Since that debate, the scale of the problem has increased exponentially. After all, total custody assets of the top global custodians are said to equate to US$ 100 trn (although there is material double counting within that figure). If, even a low risk weighting were applied to a modest proportion of those assets, the impact on bank capital would be dramatic. In the current climate, where regulators are requiring more capital and less risks from the banks, it seems ridiculous to place another risk burden on them.

However, the real risk could be made minimal, as long as any change in liability structures is accompanied by other rule changes.

First of all we need to differentiate between cash and non cash assets. Client cash is normally held by Global Custo-dians on their own books and then deposited with their sub custodian in a nostro account. The liability is clear. Clients have a claim against the Global Custodian irrespective of failure of one or another sub custodian.

However, non cash assets are not held in the books of either the Global Custodian or the Sub Custodian. They may, often through a fully owned nominee subsidiary, have legal owner-ship of those assets but they do not appear in their balance sheets and (with a few exceptions in countries that do not distinguish between legal and beneficial ownership) there can be no doubt that they do not constitute part of the pool for a prospective liquidator..

There are, however, two issues that create an element of uncertainity. Firstly, in many countries the assumption that the distinction between legal and beneficial ownership will withstand the challenge of third party creditors is not proven in law. And secondly there is always a possibility that proprie-tory assets and client assets are commingled by a delinquent custodian and become tainted.

So, alongside any change in rules to enforce restitution of assets by a Custodian, we need several legal changes. First, we need clarity that assets held for a beneficial owner will be ring fenced in law in the event of a custodian default. And secondly we need to agree (as indeed happens in certain jurisdictions) that, where assets are commingled without the consent or knowledge of either the custodian or their client, claims for client assets will always have a priority over those of other creditors.

And, finally, Europe has to recognise that investment is global. We may be able to create the right environment within the EC to protect investors and intermediaries. Although legisla-tors need to accept that, elsewhere, markets may not follow such guidelines and regulation must surely allow for this, for precluding investment in non compliant jurisdictions is pos-sibly illegal and surely undesirable.

John Gubert


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Market Capitalisation EUR 71.4bn

YTD Dev. of Market Capitalisation -3.7%

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

YTD Dev. of SE Transactions n.a.

SE Turnover (Vienna SE) EUR 4.0bn

Monthly Index Performance (ATX/VSE) -5.9%

GDP per Capita (2010 in EUR) 33,442

GDP Real 2010 (Change against prev. year in %) 1.3

3-Month Money Market Rate (current in %) 0.88

Inflation in 2010 (yearly average in %) 1.8

Upcoming Holidays none

Source: Thomson Datastream

Source: Bank Austria, National Statistics

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BT Asset Management Launches Licensing Procedure for a PassivelyManaged Fund on ATXBT Asset Management launches the licensing procedure of the BT Index Austria ATX, a passively managed fund on the ATX, the Austrian Traded Index. The ATX, the leading index of the Vienna Stock Exchange, is a capitalization-weighted price index, made up of 20 Austrian blue chip stocks traded at the Vienna Stock Exchange. The index is calculated and disseminated in real time and denominated in EUR. As of 31 July 2010, the ATX market capitalization amounted to EUR 58.87 bn, the effective tradable capitalization being EUR 35.20 bn.

The ATX is a globally recognized brand name and reference for the Austrian capital market. Worldwide, the index is used by more than 23 issuers (banks, insurance companies, asset managers) as underlying for their financial instruments, such as structured products and standardized derivatives (futures and options). Currently, there are over 1.500 structured products (certificates, warrants, bonds), 2 Exchange Traded Funds and 2 passively managed funds linked to the ATX.

“Banca Transilvania Asset Management is the first Eastern European financial institution that has received a license from Wiener Börse AG to use the ATX as underlying for a fund containing Austrian shares. We are happy to see an increas-ing interest of Romanian investors in companies listed on the Vienna Stock Exchange,“ said Michael Buhl, CEO of Wiener Börse AG.

Source: Wiener Borse

Impact on investorsFor information purposes only.

Written and edited by: Thomas Rosmanitz Head of Relationship Management Austria Tel. +43 50505 58515 · [email protected]

mailto:[email protected]


7 Belarus

Market Capitalisation USD 12.0bn

YTD Dev. of Market Capitalisation n.a.

Number of SE Transactions p.m. (BCSE) 2,444

YTD Dev. of SE Transactions 27.5%

SE Turnover (BCSE) BYR 1.909bn

Monthly Index Performance (BCSE) -26.8%

GDP per Capita (2010 in EUR) 287


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


BYR/EUR 0,00026



BELaRUS

Belarus placed Eurobonds The Ministry of Finance of the Republic of Belarus reported the successful placement of the first tranches of sovereign Eurobonds for the total amount of USD 1 bn.

■■ USD 600 mn 5-years coupon 8.75%

■■ USD 400 mn 5-years coupon 8.251%

Preliminary rating of Standard & Poor’s is B+.

Belarus’ Council of Ministers has been authorized to implement Eurobond issues amounting to USD 2 bn in 2010 until 2011, with a maturity of at least five years and floatation abroad.

Impact on investorsImportant milestone for Belarusian economy which shows strong intention of the country to become a part of the world financial market.

Belarus plans sovereign bonds issue on MICEXBelarus plans to issue sovereign bonds for the total amount of RUB 5-10 bn on the Russian market in September-October 2010. One of the agents for this issue, the largest Russian bank Sber-bank, reported that the Road Show for this issue was successful.

Federal Financial Market Services (FFMS) of Russia has pre-pared all required orders for this issue. The Central Bank of Russia has also prepared some amendments of legislation which allows Russian banks to evaluate the risk of the Com-monwealth of Independent States (CIS) bonds without any risk increment coefficient.

If this issue takes place Belarus will be the first foreign sovereign issuer on MICEX.

Impact on investorsAdditional investment possibility.

National Bank reduced refinancing rateOn 9 August 2010 the National Bank of Belarus has announced a refinancing rate-reduction by 0.5% resulting to 11% effective from 18 August 2010. This is the third reduc-tion of the rate in 2010:

■■ From 13.5% to 12% in June;

■■ From 12% to 11.5% in July.

Impact on investorsStimulation of economy activity.

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


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Source: Bloomberg

Market Capitalisation (Sarajevo SE) BAM 7.2bn

YTD Dev. of Market Capitalisation 0.7%

Number of SE Transactions p.m. 1,269

YTD Dev. of SE Transactions -45.8%

SE Turnover (SASE) BAM 5.7mn

Monthly Index Performance (SAX-10/SASE) -6.0%

Market Capitalisation (Banja Luka SE) BAM 3.4bn




SE Turnover (BLSE) BAM 31.4mn

Monthly Index Performance (BIRS/BLSE) -2.6%





BAM/EUR 1.95

Upcoming Holidays 9 September

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Law on foreign currency transactions adopted on entity levelThe House of Peoples at the Federal Parliament during the last session adopted the Law on Foreign Exchange Regula-tion in an urgent vote.

The previous legislation, adopted in 1988, international part-ners evaluated as a major obstacle to the development of financial markets, equity markets and payment operations with foreign countries. Amendments to the act in question, adopted in the National Assembly of the Republic of Srpska last year, now allow undisturbed capital transactions with foreign countries.

Although Bosnia, as a part of the Stabilization and Association Agreement with the European Union, committed to bringing this bill on the state level, the law never won the majority vote at the Parliament.

Although the application of that law regulates many domains of the monetary policy, it is highly unlikely that it will be passed on to the national, state level by the end of the year. The proposed Law Framework on Foreign Currency Transac-tions in Bosnia and Herzegovina provides for regulation of current and equity transactions and their form of payment and billing between the residents (legal entities registered in B&H, branches of foreign legal persons, entrepreneurs, individuals residing in B&H and foreign citizens, state bodies and organizations, diplomatic missions abroad) and non-residents (everybody else).

The law framework was devised to establish a unified, stable system of foreign currency transactions to Bosnia and Herze-govina with the level of liberalization perfectly in line with the already defined and adopted Foreign Investment and Foreign Trade Policy.


Bosnia and Herzegovina records an Increase of SWIFT MessagesWithin the regular activities, the SWIFT Senior Account Direc-tor for Eastern and Central Europe Stephan Kraft visited the Central Bank of Bosnia and Herzegovina (CBBH) and held a meeting with representatives of commercial banks and the CBBH. This is the regular meeting, organized at least once a year. The aim is to maintain contact with all commercial banks and the CBBH and to share all the news about SWIFT, such as new solutions that exist and which are related to payment or securities, and also to discuss the needs of banks in order to see how SWIFT can support them.


9 Bosnia and Herzegovina

SWIFT was founded in the 70’s of the last century, and its function can be, in simple terms, defined as a kind of post office for financial industry, meaning the transfer of financial messages. «This is a good comparison; sometimes it is really said it is the post office of the financial system, which means that we take care about delivering any kind of financial infor-mation. Historically, this is primarily related to payments, but in the meantime we began to transmit the information related to securities, shares, share capital, commercial papers, and then all information related to the stock markets, the financial markets, as well as trade finance, letters of credit etc. There-fore, the main reason for the existence of SWIFT is not that it applies only to the payment, but the same infrastructure is used for any kind of information that financial institutions share with each other», Kraft says. According to his words, SWIFT is growing because, in general, the whole industry is becoming globally oriented, meaning it has an international character. He illustrated it with the explanation that, if interna-tional investors wish to join the local market, they want to use the same standards, regardless of whether they are Bosnian, Romanian or Austrian institutions. Therefore, an increasing need for international standardization and harmonization is evident, Kraft states.

Answering the question whether all the members, since there are also smaller and weaker countries, have equal rights in this sense and how the interests of smaller members are represented, Kraft says that there is the Board. The size of the Board and participation in it depend on the size of income that each country participates with. Smaller countries are gathered in the European SWIFT Association (ESA), which is intended for small countries like BH, which means that the interests of smaller countries, in comparison with larger coun-tries such as the USA, Germany or France, are also taken into consideration when the strategy is prepared. Another important fact is that when it comes to issuing new stand-ards, which takes place in November every year, the whole community and each country are asked to agree or disagree with the proposed amendments. «In this way we ensure that the big countries, meaning important institutions, as well as small countries, are taken into consideration», Kraft explains.

Talking about statistics or the number of messages that are transferred via SWIFT, these are millions of messages. The maximum value recorded last year was 18 mn messages only in one day. The global crisis influenced the SWIFT system, so 2009 was the first year in the history of SWIFT when the number of messages decreased comparing with the previous year. In the first quarter of 2010, there was again an increase of about 10%. BH is in accordance with the trends in terms of growth. Thus, in the first quarter of this year BH had the total of about 600,000 sent messages, which is an increase of about 2.6%. This is approximately the same level as it is in the neighbouring countries, says Kraft.

Talking about the differences between the financial markets which BH belongs to, i.e. South-Eastern Europe, and Central and Western Europe, Kraft emphasized that for this region a high percentage of messages related to payment is typical, while in the countries such as Austria, Germany and France, the ratio between the messages related to payments and messages related to securities is approximately 1:1. «In BH and countries likes Bosnia and Herzegovina, about 97% of all messages transmitted by SWIFT are still related to pay-ments», says Kraft. The SWIFT strategy is to reduce the prices by 50% every five years, which it does regardless of the current crisis and problems in the financial markets. «Our Board has decided that until 2015, comparing prices from 2010, the prices will be reduced, most likely by 30%, and maybe even by 50%», Kraft points out.

SWIFT is obviously changing; it is the post office of the financial industry, however it wants to expand and to enter some new areas. «We have worked a lot in various areas and with central banks, central depositories in various parts of the world in order to see how we can build the appropriate main system how to open ourselves so that the market can become as transparent as possible and how to place the country as a whole in relation to international competition. We want to offer this knowledge and this experience to other countries through consulting services, which means that we are working on research market studies, which may be connected with payments and securities», Kraft concluded.

Source: Central Bank of Bosnia and Herzegovina


Written and edited by: Amra Telacevic Relationship ManagerTel. +387 33 562 816 · [email protected]



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Market Capitalisation BGN 10.4bn




SE Turnover (Bulgarian Stock Exchange) BGN 36.8mn

Monthly Index Performance (SOFIX) -0.8%


GDP Real 2010 (Change against prev. year in %) -1.0



EUR/BGN 1.96

Upcoming Holidays 6, 22 September

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Established Link between UniCredit Bulbank and Polish Depositary Yields First ResultsThe agreement between UniCredit Bulbank and the Polish Depositary (KDPW), enabling the listing of Bulgarian com-panies on the Warsaw Stock Exchange, has already yielded concrete results: as of 11 August 2010 the shares of Inter-capital Property Development are traded on the Polish capital market. Thus, it becomes the first Bulgarian company trad-able in Warsaw.

The agreement on the establishment of an operational link between the Polish Depositary and UniCredit Bulbank (in the role of a custodian bank) was signed in mid-February and the two institutions promptly committed to working actively for real utilization of the established link enabling the listing of Bulgarian companies on the Warsaw Stock Exchange.

„The Polish depositary is working actively to attract foreign companies and, in particular, the ones from leading mar-kets in the region of Central and Eastern Europe,“ Iwona Sroka, President and CEO of the Polish Depositary, said. The cooperation with Bulgaria, through the established link with UniCredit Bulbank, is a part of this strategy.

„We are happy that we already have a company that will actually avail itself of the advantages of being listed on the Warsaw Stock Exchange, namely, access to more capital and steady investment structure. Of course, this will also be to the benefit of Polish investors as it would be easier for them to acquire shares of attractive Bulgarian companies,“ said Mladen Zapryanov, Director for Global Transaction Services at UniCredit Bulbank.

The link with Bulgaria via UniCredit Bulbank will not only enable the clearing and settlement of transactions involving shares of Bulgarian companies listed on the Warsaw Stock Exchange, but will also ensure the processing of corporate actions by KDPW in accordance with procedures based on Bulgarian market regulations.

This link will enable the performance of the following proc-esses in respect of the securities registered on the KDPW account in UniCredit Bulbank:

■■ The processing of corporate actions, including:

■■ increases of share capital, stock splits, share exchang-es, assimilations, conversions, redemptions, and other reorganizations;

■■ dividends, rights or other distributions which may be declared payable or distributable as of the relevant record date and payment date;


11 Bulgaria

■■ Proxy voting service for general meetings.

■■ Automatic conversion of cash distributions (e.g. dividend payments) to Polish-based holders of Bulgarian securities from BGN to EUR. Cross-border payment can be trans-ferred intra-day to Polish bank accounts.

■■ Tax withheld on dividends by issuer at source (the Bul-garian issuer acts as withholding agent). Tax reclaims are possible: KDPW will assist in providing application forms and tax documentation to its participants to process tax reclaims for their clients.

The operational link with the Bulgarian market is a free-of-payment (FOP) type. The transfer of securities to and from the Polish market takes place across the accounts of KDPW participants and the KDPW account in UniCredit Bulbank without change of beneficial ownership. It is worth underlining that KDPW participation fees for foreign issuers (including, of course, Bulgarian issuers) are currently free of charge.

Impact on investorsPositive impact enabling trade and settlement of Bulgarian securities on the Polish market.

2010 Ranking of Finance Central Europe: UniCredit Bulbank is the strongest bank in Bulgaria by capital and assetsIn the traditional ranking performed by the financial edition Finance Central Europe for 2010, UniCredit Bulbank was ranked number one among the banks in the country by capital and by assets. Because of its stable performance in the previous years, the London-based edition also awarded UniCredit Bulbank, the largest bank in Bulgaria, in the same categories – capital and assets – with the special prize for best bank during the past ten years (2000-2010).

Finance Central Europe (FCE) is a London-based financial edition, fully devoted to the development of the Southeast European markets. The edition’s annual ranking is done on the basis of comparison and analysis of main indicators of the banks in Southeast Europe in terms of condition of the assets, capital, profit generation possibilities as well as effi-ciency indicators assessment. The data which FCE uses, are from the audited annual statements of the banks certified by international audit companies.


The Bulgarian Stock Exchange Continues to Develop Its Internet SiteIn August 2010 the Bulgarian Stock Exchange introduced two new sections on its internet site www.bse-sofia.bg, a new section “Public Offering” and a new section “General Meetings of Issuers”.

The “Public Offering” section gives information to the wide public on the advantages and responsibilities of public com-panies, as well as a summary of the procedures and steps when organizing an initial public offering. It contains informa-tion about:

■■ the types of companies and the characteristics that make them attractive for the investors

■■ the public status of companies

■■ the costs associated with admission to trading on a regu-lated market

■■ the main steps when preparing the public offering

■■ the main criteria and characteristics when choosing an investment intermediary, legal consultant and PR agency

■■ the key points in relation to the specifics of the public of-fering such as the size of the issue, target investors, the way in which the IPO will be executed, the issuing price, method of payment to the investment intermediary, etc

■■ the contents of the prospectus for public offering

■■ execution of the public offering

In the section users can also find information on the charac-teristics of the public companies life, the advantages of using a market-maker and the characteristics of the relations with investors, the regulatory body, the Exchange, the Central Depository and the media.

The “General Meetings of Issuers” section provides access to general meeting documents submitted to the BSE by publicly traded companies. The section is organized in a convenient way to use the information, the documents being grouped in separate folders by company, event and in chronological order.

For the time being the sections are available only in Bulgarian. Their introduction is part of BSE’s strategy to spread aware-ness of the capital market and to facilitate the handling for issuers and investors.


Written and edited by: Yavor DojdevskiHead of Global Securities Services, UniCredit Bulbank AD Tel. + 359 2 93 20 107 · [email protected]

http://www.bse-sofia.bg


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CRoaTIa

Market Capitalisation HRK 17.8bn




SE Turnover (Zagreb SE) HRK 856.4mn

Monthly Index Performance (Crobex/ZSE) 0.1%





EUR/HRK 7.22




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Stress test shows Croatia banking sector is stableDespite the expected continued pressure on earnings, a rela-tively high capital adequacy of banks in Croatia will render them stable in the coming period, according to the Croatian National Bank’s latest publication “Financial Stability”. The publication gives results of stress testing of banks. In a baseline scenario which foresees the beginning of the economic recovery in the second half of 2010, a share of non-performing loans, which was 9% in March, is to rise above 10% towards the end of this year. In a shock scenario, which is not very likely to happen and which predicts the continuation of the recession by the end of this year and the kuna’s depreciation against the euro by 10%, bad loans’ share would reach a ratio of 16%. However, even under that scenario, the banking sector as a whole would stay well capital-ized despite a significant decrease in capital adequacy ratio, the central bank said in the publication. In this scenario the capital adequacy ratio would be 17.3%. The share of non-performing loans increased from 7.8% at the end of last year to 9.0% in March, as a result of the continuation of deteriorating economic trends which undermined the liquidity of the corporate sector and generated the fall in employment income of households.

Impact on investorsFor Information purposes only.

Banks in Croatia generated combined profit of HRK 2.2 bnIn the first six months of 2010, banks in Croatia generated a combined pre-tax profit of HRK 2.2 bn, according to prelimi-nary figures released by the Croatian National Bank (HNB). This is 19.9% of HRK 554.4 mn less than the year before. All loan institutions – 32 commercial banks, two savings banks and five home savings banks – reported a gross profit of HRK 2.24 bn in the first half of 2010, which is HRK 562 mn less than the year before. Of the 32 banks operating in the market of Croatia, seven had losses, according to the central bank’s data. The seven loss-makers are small banks, and their combined loss amounted to HRK 85.1 mn. The total assets of the 32 banks in Croatia at the end of June totalled HRK 379.3 bn, or 0.29% more than at the end of June 2009. The total assets of all loan institutions in Croatia amounted to HRK 385.8 bn, up 0.19%. The top two banks, Zagrebacka Banka and Privredna Banka Zagreb, generated 49% of the total profit of all banks. Among the top six banks are also Erste&Steiermaerkische Bank, Raiffeisenbank, Societe Gen-erale – Splitska Banka, and Hypo Alpe Adria Bank.

Impact on investorsFor Information purposes only.

Written and edited by: Snjezana Bruncic Relationship Manager, Global Securities ServicesTel. +385 1 6305 400 · [email protected]



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Market Capitalisation CZK 1.3trn


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

YTD Dev. of SE Transactions n.a.

SE Turnover (Prague SE) CZK 60.0bn

Monthly Index Performance (PX) 6.4%





EUR/CZK 24.75

Upcoming Holidays28 September,

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CNB adjusts market-support operations introduced during crisisThe Bank Board of the Czech National Bank has decided to adjust the extraordinary liquidity-providing monetary meas-ures introduced in October 2008 to support the domestic financial market during the global financial crisis. Under the approved changes, which reflect current market conditions, the three-month liquidity-providing repo operations will be discontinued at the end of 2010. The two-week liquidity-providing repo operations will be conducted less frequently (once a week) as of January 2011.

The Bank Board has decided that the two-week liquidity-providing repo operations will remain in place at least until the end of 2011. According to a CNB survey, banks agree that these extraordinary operations have been effective. The operations have been used in only very small volumes, how-ever, the very fact that investors and market makers can use them increases liquidity and improves the functioning of the government bond market.

As in the case of repo operations, the Bank Board has short-ened to 14 days the maturity of the foreign exchange swaps that are used to provide koruna liquidity against the euro.

Exchange of collateral remains one of the CNB’s instruments and from now on will be regarded as a standard operation. The CNB had already intended to introduce this measure before the crisis, as it eliminates the inefficiency of securities settlement systems and gives banks access to sufficient securities to draw on intraday credit.

“The measures to support the interbank market introduced in October 2008 have proven successful. In line with the original objective, they have helped to stabilise the govern-ment bond market and thereby prevent problems in for-eign financial markets from spreading to the Czech financial sector,” said Kamil Janácek, member of the Bank Board overseeing the CNB’s Financial Markets Department. “Since these extraordinary operations were introduced, conditions have improved somewhat on the domestic market, allowing us to adjust their parameters,” he added. The CNB reserves the option to adjust the parameters further in response to market developments.


14 Czech Republic

The technical parameters of the extraordinary interbank market support operations will change as follows as of January 2011:

Written and edited by: Dita Šafárová Relationship ManagerTel + 420 221 216 772 · [email protected]

Adjustment of two-week liquidity-providing repo operations until 31 December 2010 from 1 January 2011

Frequency of repo operation: twice a week (Monday and Friday) once a week (Monday)

Banks’ bids satisfied at fixed rate: 2W repo rate + 10 b.p. 2W repo rate + 10 b.p.

Note: The remaining parameters of liquidity-providing repo operations remain unchanged.

Adjustment of foreign exchange swaps until 31 December 2010 from 1 January 2011

Maximum maturity: three months two weeks

Haircut applied: 10% 5%

Note: Foreign exchange swaps are conducted on the basis of a bank’s request for the provision of koruna liquidity against the euro. For the purposes of the swap, the exchange rate is lowered by 5% to eliminate exchange rate risk. The other parameters (e.g. delivery after delivery settlement) remain unchanged.

Exchange of collateral (from now on a standard operation):On request, the CNB exchanges collateral settled in the Central Securities Depository for collateral settled in the Short-Term Bond System (SKD). The aim is to provide banks with enough securities, for example for drawing on intraday credit. The CNB does not regard the exchange of collateral as a classical monetary operation; rather, it is a technical operation aimed at eliminating malfunctioning of settlement in the Central Securities Depository for the purposes of drawing on intraday credit.

Source: CNB


CNB keeps interest rates unchangedThe CNB Bank Board decided at its meeting on 5 August to keep interest rates unchanged. The two-week repo rate was maintained at 0.75%, the discount rate at 0.25% and the Lombard rate at 1.75%.

The history of settings of the main instruments of the mon-etary policy and the Bank Board minutes are available athttp://www.cnb.cz/en/monetary_policy/instruments/index.html#mpihttp://www.cnb.cz/en/monetary_policy/bank_board_min-utes/index.html

Repo rate: The CNB’s key monetary policy rate, paid on commercial banks’ excess liquidity as withdrawn by the CNB in two-week repo tenders.

Discount rate: A monetary policy rate which as a rule rep-resents the floor for short-term money market interest rates. The CNB applies it to the excess liquidity which banks deposit with the CNB overnight under the deposit facility.

Lombard rate: A monetary policy interest rate which pro-vides a ceiling for short-term interest rates on the money market. The CNB applies it to the liquidity which it provides to banks overnight under the lending facility.

Source: CNB



http://www.cnb.cz/en/monetary_policy/instruments/index.html#mpi

http://www.cnb.cz/en/monetary_policy/instruments/index.html#mpi

http://www.cnb.cz/en/monetary_policy/bank_board_minutes/index.html

http://www.cnb.cz/en/monetary_policy/bank_board_minutes/index.html


15

Market Capitalisation HUF 17,867.3bn




SE Turnover (Budapest SE) HUF 716,964mn

Monthly Index Performance (BUX) -10.5%





EUR/HUF 278,14



HUNGaRy


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Effect of Suspension of IMF Talks is Considered Only Temporary by the Hungarian Prime MinisterAccording to the opinion of the Hungarian Prime Minister Viktor Orban, Hungary’s present financial position is stable and pre-dictable, and provides a good basis for the government to continue the restructuring and to kick start economic growth. Speaking about the prospects of future strong economic cooperation within the European Union, the Prime Minister said Hungary’s financing needs could be met without the help of the IMF. He added the country is in a relatively stable position, therefore there is a possibility for an economic reconstruction.

The Prime Minister noted it showed the stability of the economic situation that the suspension of the talks with the IMF and the subsequent downgrades only resulted in temporary disturbances. Following these disturbances, however, both the forint rate and the bond-issue and bond-sale capacities are expected to return to the level where the country’s operation can be regarded as stable, nevertheless, further downgrade could be in the pipeline.

Impact on investorsHungarian government temporarily suspended talks with the IMF.

New Opportunities on the Budapest Stock ExchangeIn the remainder of 2010 there will be a few new opportunities to invest in at the Budapest Stock Exchange (BSE).

Energy efficiency company RFV (ISIN: HU0000089198) has announced in August that the Hungarian Financial Super-visory Authority had approved the company’s plan for a HUF 10 bn corporate bond issue in the course of a public offering that is to take place in parts within the coming twelve months. The first issue is planned for September 2010, prior to which further details will be revealed by RFV.

Örmester Corporation, one of the first Hungarian security companies founded in 1990 in participation with the National and Budapest Police Department, is planning to launch their shares on the BSE in 2010, following the transformation of the corporation from private to public limited company. According to information available at this moment, the introduction of the shares will be, as a first step, only technical on the BSE, with no free float, however, the aim of the owners in the longer term is to make a certain amount of shares available for investors.

CIG Pannonia Life Insurance Private Limited Company, founded in 2007 and run by Hungarian management has announced to plan an IPO of shares worth of HUF 434 mn until the end of 2010, in order to raise the registered capital of the company. Details of the IPO have not been revealed so far.

Impact on investorsNew investment opportunities on the BSE in the coming months.

Written and edited by: Zsanett Lencsés Senior Sales & Relationship ManagerTel. +36 1 301 1920 · [email protected]


16

Market Capitalisation KZT 11,477.8bn




SE Turnover (KASE) KZT 5.6bn

Monthly Index Performance (KASE) 1,480.0





EUR/KZT 193,86


Source: Bloomberg

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Fitch upgrades ratings of Kazakhstan’s Alliance Bank after the completion of restructuring Fitch Ratings has upgraded Kazakhstan-based Alliance Bank’s long-term foreign currency Issuer Default Rating (IDR) to ‘B-’ from ‘RD’ (‘Restricted Default’), and assigned a stable outlook. The rating action follows the completion of the restructuring of Alliance’s liabilities and concludes the review of the bank’s ratings initiated by Fitch on 31 March 2010.


Written and edited by: Abdikali Nurbol Relationship ManagerTel. +7 727 258 30 15 · [email protected]


17

Market Capitalisation PLN 483.7bn




SE Turnover (WSE) PLN 33.2bn

Monthly Index Performance (WIG20) 8.9%

Monthly Index Performance (WIG) 7.8%





EUR/PLN 3.98



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New regulations on disclosure requirements in terms of banking and insurance sector – reporting aspectOn 14 August new regulations on disclosure of sharehold-ing came into force. The regulations changed due to the amendments to the Banking Law, Act on Insurance Activity, Investment Fund Act, Law on Trading in Financial Instruments and Act on the Financial Market Supervision introduced by the Act of 25 June 2010. New regulations only effect compa-nies being stipulated by the amended acts, thus accordingly domestic banks, domestic insurance companies, investment fund companies and brokerage houses. It is very important to stress that the existing Law on Public Offering specify-ing disclosure requirements for publicly listed companies from all sectors remains unchanged due to the fact that no new reporting thresholds were added. Investors might be interested mainly in those regulations which refer directly to companies being listed on the Warsaw Stock Exchange, such as domestic banks and domestic insurance companies. The most significant changes concern reporting to the Polish Financial Supervision Authority in particular on situations of intention of:

■■ acquiring or taking up 10%, 20%, one third (33⅓ in the Act on Public Offering), 50% of the total vote or share capital in a domestic bank or an insurance company and intention of becoming a predominant shareholder of such companies in way other than by acquiring or taking up the majority stake in these companies contrary to the previous regulations where an investor is intending to acquire or take up shares resulting in achieving or exceeding 10%, 20%, 25%, 33%, 50%, 66% or 75% of the total vote were required to apply to the PFSA for approval to exercise vot-ing rights at a general meeting respectively to the threshold notified (art.25 of the Banking Law dated 29 August 1997 and art.35 of the Act on Insurance Activity);

■■ disposal of shares resulting in a new threshold over 10% of the total vote in a domestic bank and intention of disposal of shares resulting in new threshold maintained below 10%, 20%, one third, 50% of the total vote in a domestic company contrary to the old requirements where investors intending to dispose the shares resulting in the remaining threshold that would entitle to less than 10%, 20%, 25%, 33%, 50%, 66% or 75% of the total vote in a domestic bank were required to notify the PFSA of their intentions (art.25p. of the amended Banking Law);

■■ disposal of shares resulting in a new threshold maintained respectively below 10%, 20%, one third, 50% of the total vote or share capital in an insurance company or situation in which that insurance company would not be a depend-ent entity any longer (the notification to the PFSA should


18 Poland

be delivered within 14 days before the planned disposal contrary to the old regulations where investors intending to dispose the shares resulting in the remaining threshold that would entitle to less than 10%, 20%, 33%1/3, 50% of the total vote or share capital in an insurance company, were required to notify the PFSA and that insurance com-pany of their intentions (art.36 of the amended Act on Insurance Activity);

New regulations specify also that investors being a depend-ant entity intending directly to acquire or take up shares in the relevant companies or become their predominant share-holder shall be required to notify the PFSA together with their parent company while the same investors intending indirectly to acquire or take up shares of the relevant companies or become their predominant shareholder only their parent company shall be required to notify the PSFA. Absolutely new is an obligation of reporting to the PFSA on taking up or acquiring of shares in the relevant companies by investors acting in concert for the purposes of executing voting rights on the level of thresholds required to notify (art.25.7 of the Banking Law and art.35.7 of the Act on Insurance Activity). They report jointly as concert parties. Investors applying to the PFSA with a notification must also provide with support-ing documentation approved by an appropriate consul and delivered in a Polish language version. This procedure is stipulated respectively by the art.25a – 25d and art.25f-25g of the Banking Law and art.35a – 35d and art.35f – 35g of the Act on Insurance Activity. Foreign investors (non-resi-dents) are obliged by the new regulations to appoint their local proxy while reporting to the PFSA in order to enable the regulator to send all correspondence to that proxy or the correspondence remains in files as delivered properly to the notifying investor. The exception refers to the final decision in the subject of notification. Not obeying this provision may result in serious consequences for the notifying investor due to the fact of being not aware of any calls crucial for the decision-making process in the subject of the notification (art.25e – 25f of the Banking Law and art.35e – 35f of the Act on Insurance Activity). In the worst scenario the Regulator may oppose the planned acquisition or taking up of shares within 60 business days since the receipt of the notification together with complete supporting documentation required (art.25h – 25i of the Banking Law and art.35h – 35i of the Act on Insurance Activity).

Impact on investorsInvestors have to be aware of new regulations on disclo-sure requirements especially including reporting procedures that have become effective as of 14 August 2010. The amendments to the existing regulations just introduced should be perceived as a following step to adapt the Polish legal framework to EU Markets in Financial Instruments Directive (MIFID) in terms of procedural principles of apply-ing caution policy in companies of the financial sector.

Written and edited by: Marta Boboryk Relationship ManagementTel. +48 22 524 5861 · [email protected]



19

Market Capitalisation RON 92.0bn




SE Turnover (Bucharest SE) RON 417.4mn

Monthly Index Performance (BET/BSE) 7.0%





EUR/RON 4.23



RomaNIa


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EconomyRomanian economy registered an increase in Q2 2010Romania’s economy again shows signs of recovery and reg-istered an increase in the second quarter of 2010 from the previous quarter for the second time since the beginning of the recession in 2009.

The gross domestic product in the second quarter 2010 was, in real terms, by 0.3% higher than in the first quarter of 2010 (seasonally adjusted data). But when compared with the same quarter in 2009, the gross domestic product decreased by 0.5% in the gross series and by 0.6% in the seasonally adjusted series.

During the recession Romania’s economy also grew in the third quarter of 2009 from the previous quarter, by 0.1 , but afterwards it went on declining.

Romania entered recession after its economy had registered decreases for two quarters in a row, in the fourth quarter 2008 from the third quarter 2008 as well as in the first quarter 2009 from the fourth quarter 2008.

Impact on investorsEconomy recovery signs in second quarter 2010.

24% VAT was approved by the SenateThe Senate gathered on Tuesday in an extraordinary session, approved the Government’s Emergency Ordinance 58/ 2010, by which the VAT is maintained at 24%. The Senate passed the Bill with 64 votes “in favor” and 50 votes “against”.

Earlier on Tuesday, the government’s ordinances aimed at raising VAT and respectively, at modifying the local public finance law, which was debated in the Budget-Finance Committee. The members of the Committee opposed the increase of the VAT from 19 to 24%. The Minister of Finance, Sebastian Vladescu, present in the debate, refused to make any comments.

Impact on investorsPublic finance law amendment was approved.


20 Romania

Central Bank Central Bank report regarding credit riskAccording to the Financial Stability Report on 2010 released by the National Bank of Romania (NBR), credit risk remains the main vulnerability of the banking sector. Companies’ and households’ capacity to properly service their debt is con-strained by the prolonged and deep economic contraction, as well as the significant degree of indebtedness, in general, and high foreign currency-denominated debt, in particular, for some categories of borrowers. Financial stability remained resilient during 2009 and H1, on the background of increas-ing bank capitalization to comfortable levels, maintaining adequate liquidity and sustained provisioning efforts, the report shows.

The banking sector resilience and the capacity to withstand shocks were also backed by the stress testing results to economic shocks, according to NBR’s assessment. Inter-national macroeconomic developments and the ongoing domestic adjustments are important factors that put pressure on financial stability in the short term.

Impact on investorsCredit risk remains the main vulnerability of the banking sector.

Written and edited by: Irina Savastre Head of GSSTel. +40 21 200 26 70 · [email protected]



21

Market Capitalisation RUB 14.6trn


Number of SE Transactions p.m. (MICEX) 9,076,917


SE Turnover (MICEX) RUB 5.2trn

Monthly Index Performance (RTS) 7.2%





EUR/RUB 39.51



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MICEX plans IPOMICEX Group intends up to the end of next year to become the full owner of the MICEX Stock Exchange in the transition to a single share. After this step, the MICEX will be ready to IPO, which will lead to a reduction in the group share of the Bank of Russia. Sergei Shvetsov, Director of financial markets department, Board of directors’ member of MICEX Stock Exchange has confirmed the intention to launch IPO after 2011. In preparation for the IPO there is a transformation in the ownership of the MICEX Group.

These plans also require changes to the law “On securities market”, which currently prohibits a shareholder to have more than 20% of the stock exchange. As reported by Mr. Shvetsov, the bill with proper amendments is introduced to the Duma.

Impact on InvestorsConsolidation of MICEX Group will strongly contribute to general market infrastructure development and could lead to planned creation of International Financial Centre in Moscow.

MICEX Stock Exchange working out the rules for trading robotsMICEX Stock Exchange has distributed the invitation among participants to contribute to new rules of trading in respect of trading robots risks. MICEX expressed concerns regard-ing the increase of trading robot activity which could affect the stock exchange operations. The main goal of proposed amendments to trading rules is to eliminate the infrastructure risks and to avoid the overload of trading technical complex.

Currently trading robots execute more than half of all trading orders on MICEX Stock Exchange and 90% of the orders on FORTS section of the Russian Trading System (RTS).

MICEX proposed to implement the system of robot identifi-cation in order to scan its activity and also disconnect such robot in case its activity could damage the normal functions of the trading system. Currently, the proposed trigger for identification is 1% of the daily orders volume which is equal to 40,000 orders.

RTS also stresses the efforts to encourage the participant to use more advanced robots – as one of the measure RTS has increased the fee for the quantity of daily transactions over the specified limit.

Impact on InvestorsNew rules should improve the stock exchange activity and avoid technical crashes due to hyperactive trading robots.


22 Russia

Prime Minister proposed new rules for additional share issues registrationPrime Minister Vladimir Putin proposed to cancel state reg-istration procedure for new issues of the shares listed on the stock exchange. This step should allow to reduce administra-tive costs and to provide investors with the possibility to trade with new share issue right after placement without waiting for state registration.

Federal Financial Markets Service (FFMS) should prepare the draft for Law “On Securities Market” amendment in order to simplify the share issue process for the companies listed on Russian stock exchanges. The main idea of this draft is to eliminate double control of share issue process performed currently by FFMS and stock exchange.

Impact on InvestorsImprovement of new shares issue process for the compa-nies included into listing on Russian stock exchanges.

FAS plans to amend the legislation on foreign investorsThe Federal Anti-Monopoly Service (FAS) plans to amend the Law “On Foreign Investments in Companies Having Strate-gic Importance”. According to the proposed amendment, foreign investors will be not obliged to obtain FAS approval for share purchase in case this purchase is done within the mandatory tender offer.

The mandatory tender offer shall be announced by large shareholders according to the law “On Joint Stock Com-panies” in case shareholder accrues more than 30% of the share capital.

Once FAS completes this amendment foreign shareholders will be only obliged to report stake increase in the result of mandatory tender offer procedure.

Impact on InvestorsHarmonization of legislation will create more efficient investment rules for foreign companies.

New rules for Investment fundsFederal Financial Markets Service (FFMS) has issued the order concerning some amendments of mutual investment funds activity:

■■ ETF (Exchange Traded Funds) could be included into in-vestment fund assets;

■■ Funds of mixed investments could keep up to 50% assets in the shares and equities of investment funds (previously 15%);

■■ The real estate assets could be sold within 1 year (previ-ously 6 months).

Impact on InvestorsNew investment opportunities for fund managers.

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


23

Market Capitalisation RSD 860.0bn




SE Turnover (Belgrade SE) RSD 1.6bn

Monthly Index Performance (Belex 15) -0.6%





EUR/RSD 105.50


Source: Bloomberg

SERBIa


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Country GDP Growth Flash Estimate According to the announcement made by Serbian Statistic Office Director, Mr. Dragan Vukmirovic, to the local press agency Tanjug, Serbia’s gross domestic product (GDP) raised 1.6% in the second quarter of 2010, after 0.6% year-on-year increase in Q1 2010. Up to now, no official information was made available on the Statistic Office’s official website.

Previous Statistic Office flash estimate, given in late April 2010 as first of its kind, projected Q1 expansion at 1% and was revised by downgrading the forecast in regular June 2010 report.

Regardless of the downsizing of GDP estimates, figures show Serbia’s steady growth and emerging from crisis, as previ-ous 4 quarter figures reflected the country’s decline, when Serbia’s GDP decreased by 3% in 2009.

Serbian Prime Minister Mr. Mirko Cvetkovic announced earlier in July 2010 that the country’s GDP is projected to grow up to 2% in 2010, compared to the 1.5%-forecast made by the International Monetary Fund (IMF).

Impact on investorsSerbia on a steady path of growth and crisis emerging, as flash estimate raise Q2 GDP.

Written and edited by: Goran Platisa Senior Corporate Actions and Tax SpecialistTel. +381 11 3028 687 · [email protected]



24

Market Capitalisation EUR 25.7bn


Number of SE Transactions p.m. 515.0


SE Turnover (Bratislava SE) EUR 0.5bn

Monthly Index Performance (SAX/BSSE) 0.1%





EUR/SKK n.a.

Upcoming Holidays 1, 15 September


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Bratislava Stock Exchange Trading in JulyIn July 2010, the members of the Bratislava Stock Exchange (BSSE) used the electronic trading system in 21 business days. The total trading volume in this period amounted nearly to EUR 466.4 mn in 556 concluded transactions. Although the number of transactions increased by nearly 8% in comparison with the previous month; the financial volume went down (-6.58%). A year-on-year comparison, on the other hand, shows a 45.78% increase in volume and a 232.93% increase in the number of transactions.

Similar to previous periods, negotiated deals dominated over electronic order book (i.e. price-setting transactions), with the former representing 99.28% of the total trading volume. A total of 169 negotiated deals in a volume of EUR 463.03 mn were concluded, as opposed to 387 electronic order book transactions in a financial volume of EUR 3.36 mn.

In July 2010 investors continued to focus on debt securi-ties, as bond transactions generated as much as 97.65% of the total volume. A total of 143 bond transactions were concluded in the period under review, in a volume totalling nearly EUR 455.43 mn. Only the number of transactions increased (+32.41%) on a month-on-previous-month basis, whereas the achieved financial volume decreased by 0.57%. Equity securities of local companies were bought and sold in 413 transactions, in a financial volume of EUR 10.97 mn. In comparison with June 2010, it represents a 73.39% decrease in achieved volume, the number of concluded transactions rose by 1.47%. Nevertheless, both indicators dramatically increased on a year-on-year basis: the number of concluded transactions by 1,047.22% and the volume by 3,874.83%. Similar to the previous month, a substantial part (i.e. 76.24%) of the volume of share transactions was generated in negoti-ated deals with the share issue of Tatry mountain resorts.

A total of 3,279 transactions in a financial volume of EUR 4.32 bn have been cumulatively concluded on the BSSE since the start of the year 2010. It represents a 29.10% decline against a compara-ble period of the previous year. Transactions concluded by non-residents in July 2010 represented 55.03% of the total volume.

As of the last trading day of the month of July 2010, the market capitalisation of equity securities decreased by 2.01% on a month-on-previous-month basis to EUR 3.24 bn. The market capitalisation of bonds amounted to EUR 22.45 bn, representing a 0.46% increase on a month-on-previous month basis. The SAX index ended the month of July 2010 at 213.76 points, representing a 0.08% increase on a month-on-previous-month basis and a 27.54% decrease year on year.

Impact on investorsBSSE performance in July 2010.


25 Slovak Republic

Absolute protection of bank deposits to be cancelledThe absolute protection of bank deposits without a limit and participation of depositor in the protection is going to change when a fixed limit will be set for guarantees. The EU Directive on Deposit Guarantee Schemes sets the limit at a maximum of EUR 100,000 as of the end of this year. Therefore, the unlimited coverage in the deposit protection law must be amended to a maximum of EUR 100,000, according to a draft amendment to the deposit protection law currently in the interdepartmental review. The coverage in the EU directive was initially set at EUR 20,000, but the limit turned out insufficient. As of 30 June 2009 the coverage increased to EUR 50,000. In November 2008, the Slovak Republic introduced unlimited deposit cover-age to preserve the stability of the financial market and trust of depositors during the financial crisis. As of 31 December 2010, the coverage limit should be set at EUR 100,000.

Deposit Protection concerns bank deposits of all natural per-sons and natural persons -entrepreneurs. The statutory protec-tion includes also the bank deposits of selected non-profit non-business artificial legal entities, i.e. the deposits of foundations, non-investment funds, not-for-profit organisations providing generally beneficial services, civic associations and associa-tions of owners of apartments and non-residential premises.

Impact on investorsDeposit Protection Act will be changed, the coverage limit will be set at EUR 100,000.

Revision of SAX Index Base – Correction of BSSE Announcement published on 12 JulyIn the previous newsletter we informed about the regular revision of SAX Index base made by the Bratislava Stock Exchange (BSSE) on 12 July 2010.

The revision by the Commission:

■■ Decided to include the companies Best Hotel Prop-erties (SK1120005105) and Tatry mountain resorts (SK1120010287) in the base of SAX Index by accepting of maximum 20 % weight of each participant in the SAX Index basket.

■■ Set the adjustment coefficients to the equal value.

BSSE corrected its announcement and amended the number of securities in each issue as follows:

SAX Index base before and after revision

before revision after revision

Name of company Abbreviation of company Number of securities in issue

Number of securities in issue

Biotika BSL 983 199 983 199

OTP Banka Slovensko OTP 5 455 841 11 503 166

SES Tlmace SES 1 565 345 1 565 345

Slovnaft SLN 653 339 1 262 027

VÚB VUB 598 823 1 027 651

Tatry mountain resorts SKI – 1 807 426

Best Hotel Properties SRA – 7 193 555

Impact on investorsNew base of the SAX Index will come into force on 2 August 2010.

Written and edited by: Zuzana Milanova Sales & Relationship ManagerTel. +421 2 4950 3702 · [email protected]



26

Market Capitalisation EUR 20,564mn




SE Turnover (Ljubljana SE) EUR 31.0mn

Monthly Index Performance (SBI 20) -7.7%







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Annual Inflation at 2.1% – Deflation at monthly levelSlovenia’s inflation rate rose by 0.2 percentage points to 2.1% at the annual level in July, even though consumer prices fell by 0.7% at the monthly level, according to official sta-tistics. Measured with the harmonised index of consumer prices, an EU benchmark, the annual inflation rate was 2.3%, while the 12-month average price growth was 1.6%, the Statistics Office said on Friday, 30 July 2010 . Contributing most to monthly deflation were summer sales, which pushed the prices of clothing and footwear down 15.9% in July. The fall contributed 1.3% to monthly deflation. The prices of second-hand cars fell by 4.0%, while the prices of telephone services and equipment decreased by 1.5% on account of new discounts. Each contributed 0.1 percentage points to deflation. At the annual level, prices dropped in the groups clothing and footwear (by 2.1%), transport (by 1.2%) and recreation and culture (by 0.6%). July saw a 10.7% hike in the prices of package holidays, which pushed the prices in the group recreation and culture up by 3.1%. Dental services were dearer by 8.2%, while prices of electricity, gas and other fuels rose by 1%, gas and heat energy prices went up by 2.2% and liquid fuel prices rose by 2.1%. Contrary to expec-tations, the prices of seasonal food products increased; fruit was costlier by 3.2%, fish by 2.6% and vegetables by 2.3%. Alcoholic beverages were more expensive too. Beer prices rose by 1.7% and process of spirits by 1.3% due to higher excise duties, while wine prices rose by 1.7% as special offers ended. At the annual level, prices increased most in the group housing, water, electricity, gas and other (12.4%), alcoholic beverages and tobacco (5.2%), health, and food and non-alcoholic beverages (2.8%) and education (1.9%).

Commenting on the statistics, the Institute of Macroeconomic Analysis and Development attributed monthly deflation to the seasonal trend in the prices of clothing and footwear, while it said the annual inflation rate reflected low economic activity. Consumer prices were also affected by excise duties, the exchange rate of the euro against the US dollar, and global prices of energy products, the government think-tank said.



27 Slovenia

D&B Says Decline in Slovenia’s GDP Slowing DownThe rating firm Dun&Bradstreet (D&B) has established in its June report for Slovenia that the decline in the country’s GDP at the annual level is slowing down, but that economic activity is also dropping. D&B is also concerned that too rapid fiscal measures could dampen economic activity further.

The only increase was recorded in government spending, D&B says in the report which focuses on relations between Slovenia and Croatia in the light of the referendum on the border arbitration treaty in Slovenia.

Slovenia’s cross-border payment performance improved in June and the share of delayed payments in Slovenia slightly decreased, according to Bonitetna hisa I. D&B kept Slov-enia’s rating at DB2c, which means low levels of risk. The rating trend is labelled as stable.


Written and edited by: Elmedina Garibovic Relationship ManagerTel. +386 1 5876 453 · [email protected]


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Market Capitalisation UAH 199.0bn




SE Turnover (PFTS) UAH 3.7bn

Monthly Index Performance (PFTS) 6.9%





EUR/UAH 10.45

Upcoming Holidays 23, 24 August


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State Securities and Stock Market Commission of Ukraine to launch campaign against junk sharesState Securities and Stock Market Commission (SSSMC) of Ukraine specified criteria for defining “junk” shares, used for various fraud schemes.

SSSMC introduced a program on preventing the issue and circulation of securities which may be used for counter-pro-ductive capital outflow, tax evasion, legalization of income received illegally.

The program envisages the listing of issuers and persons, involved in issue and circulation of “junk” shares, monitoring of professional participants of a stock market and investors with respect to dealing with such shares.

The creation of the prevention program was triggered by numerous applications from State Tax Administration about the use of “junk” shares for tax evasion purposes and outflow of funds. According to SSSMC, unavailability of the issuer at its registered address and long delays in submission of reporting are the signs that the issuer issues “junk” shares.

Impact on investorsRegulator SSSMC introduced program on preventing issue and circulation of “junk” shares.

Written and edited by: Ganna Sankina Relationship ManagerTel.: +38 044 590 1209 · [email protected]



29

yoUR CoNTaCTSRegional responsibilityAttila Szalay-Berzeviczy Tel. +35 1 301 1910 [email protected]

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

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

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

Beata Szonyi Tel. +36 1 301 1924 [email protected]

Ewa Stupkiewicz Tel. +43 50505 58511 [email protected]

Philipp Aschl Tel. +43 50505 58508 [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]

Georg Markus Schneider Tel. +43 50505 58509 [email protected]

Bosnia and HerzegovinaUniCredit Bank d.d. Zelenih Beretki 24 BA-71000 Sarajevo Bosnia

Lejla Sabljica Tel. +387 33 562 777 [email protected]

Amra Telacevic Tel. +387 33 562 816 [email protected]

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

Yavor Dojdevski Tel. +359 2 9320 107 [email protected]

Veselin Stefanov Tel. + 359 2 93 20 112 [email protected]

CroatiaZagrebacka Banka d.d. Savska 60/IV HR-10000 Zagreb Croatia

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

Snjezana Bruncic Tel. +385 1 6305 400 [email protected]


30 Your Contacts

Czech RepublicUniCredit Bank Czech Republic a.s. Revolucni 7 CZ-110 05 Prague Czech Republic

Michal Stuchlik Tel. +420 22121 6770 [email protected]

Dita Safarova Tel. + 420 221 112 942 [email protected]

Tomas Vacha T. + 420 221 216 773 [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]

Zsanett Lencses Tel. +36 1 301 1920 [email protected]

Livia Meszaros Tel. +36 1 301 1921 [email protected]

KazakhstanJSC ATF Bank Furmanov Street 100 KZ-050000 Almaty Republic of Kazakhstan

Vladimir Vassilyev Tel. +7 727 258 3015 (1353) [email protected]

Natalya Kolnogorova Tel. +7 727 258 3015 (1232) [email protected]

PolandBank Polska Kasa Opieki SA (short: Bank Pekao) Ul. Grzybowska 53/57 PL-00-950 Warsaw Poland

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

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

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

Marta Boboryk Tel. +48 22 656 10 92 [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. Ghetarilor Street 23 – 25 RO-014106, Bucharest 1 Romania

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

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

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

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


31 Your Contacts

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

Jasmina Radicevic Tel. +381 11 3028 611 [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

Matej Letko Tel. +421 2 4950 3701 [email protected]

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

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

Vanda Mocnik-Kohek Head of GSS Slovenia Tel. +386 1 5876 450 [email protected]

Elmedina Garibovic Tel. +386 1 5876 453 [email protected]

Barbara Zajc Tel. +386 1 5876 453 [email protected]

UkraineUniCredit Bank LLC 14a, Yaroslaviv Val UA-01034 Kyiv Ukraine

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

Elizaveta Sotnichenko Tel. +380 44 590 1208 [email protected]

Ganna Sankina Tel.: +380 44 590-1209 [email protected]

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

Websitesgss.unicreditgroup.eu http://www.unicreditgroup.eu http://www.bankaustria.at

http://www.unicreditgroup.eu


32

DISCLaImERThe 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. Any investments presented in this report may be unsuitable for the investor depending 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. Private inves-tors 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 on any of the entities composing Corporate & Investment Banking Division of UniCredit Group which is composed of (the respective divisions of) UniCredit Bank AG, Munich, UniCredit Bank Austria AG, Vienna, and UniCredit S.p.A., Rome.

UniCredit Bank AG is regulated by the German Financial Supervisory Author-ity (BaFin), UniCredit Bank Austria AG is regulated by the Austrian Financial Market Authority (FMA), the UniCredit CAIB Securtities UK Ltd. is regulated by the Financial Services Authority (FSA) 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 confi-dential basis only to clients of Corporate & Investment Banking Division of UniCredit Group (acting through UniCredit Bank AG, London Branch (“UCB London”) and/or UniCredit CAIB Securities UK Ltd. 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 the Corporate & Investment Banking Division 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.

UCB London is regulated, to a limited extent, by the Financial Services Author-ity for the conduct of business in the UK as well as by BaFIN, Germany. UniCredit CAIB Securities UK Ltd., London, a subsidiary of UniCredit Bank Austria AG, is authorised and regulated by the Financial Services Authority.

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 implementing 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 Division 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 UniCerdit’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 representa-tion or warranty, express or implied, is made regarding future performance.

UniCredit and/or any other entity of Corporate & Investment Banking Division of UniCredit Group may from time to time, with respect to any securities dis-cussed 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.

Corporate & Investment Banking Division of UniCredit Group

UniCredit Bank AG, Munich; UniCredit Bank Austria AG, Vienna and UniCredit S.p.A., Rome

as of 29 March 2010


33

ImpRINTStatement 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: 12.000

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

Kind of businessCredit institution under section 1 (1) Austrian Banking Act

Supervisory authorityAustrian Financial Market Supervisory Authority (Finanzmarktaufsicht), departments banking supervision and securities supervisionPraterstraße 23 A-1020 Vienna http://www.fma.gv.at

MembershipAustrian Federal Economic Chamber, bank and insurance division Wiedner Hauptstraße 63 A-1040 Vienna http://www.wko.at Austrian Bankers‘ Association A-1013 Vienna, p.o.box 132 http://www.voebb.at;

Applicable legal regulationsApplicable 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 numberATU 51507409

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