MICEX Group

November 1, 2011

MICEX Group

2

MICEX Group: history1992–1995● Establishment of the MICEX ● Implementation of the MICEX electronic trading and depository system ● The MICEX is the main trading floor for currency and government

securities

1995–1998 ● Integration of the MICEX and regional exchanges into a national

exchange system based on a single platform ● Organization of trading in corporate securities and derivative contracts ● Establishment of the MICEX Settlement House and the NDC

1998–2008● Emergence of the modern structure of the MICEX Group: establishment of

the MICEX Stock Exchange, the National Mercantile Exchange,the National Clearing Centre and regional exchange centers

● The MICEX is the largest exchange in Russia, the CIS, Easternand Central Europe. It is the main center of liquidity for Russian assets

2009–2010● Formation of the system of auctions, to be held electronically, to place

state and municipal orders● MICEX-IT: operator of the MICEX electronic trading floor Goszakupki

(State Purchases)

Shareholders of the MICEX Group companies:● Central Bank of the Russian Federation, Association of Russian Banks,

VEB, Sberbank RF, VTB, Rosbank, UniCredit Bank, 8 other leading commercial banks of Russia, leading Russian brokers

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MICEX Group: financial supermarket

● The MICEX Group provides trading and settlement services in the following segments of the financial market:۰ FX market (since 1992)۰ federal bonds market (since 1993)۰ market of derivative financial instruments (since

1996)۰ cash equities market (since 1997)۰ corporate and regional fixed income market (since

1999)۰ commodities market (since 2008)۰ market for state and municipal orders (since 2010)

● Operates under the licenses of: ۰ Central Bank of Russian Federation

(FX market)۰ Federal Service for the Financial Markets

(securities and derivatives markets)۰ Ministry of the Antimonopoly Policy

(derivatives and commodities markets)

MICEX Group: functional structureMICEX

•Trading: federal bonds, USD–RUB, EUR–RUB, EUR–USD,FX and interest rates futures

•Government securities and derivatives clearing•IT support of MICEX Group

National Mercantile Exchange

•The State commodity interventions in the grain market

•Trading: grain futures

National Settlement Depository

•Safe custody and securities settlements

•Cash Settlements

MICEXStock Exchange

•Trading: cash equities, corporate and regional bonds, mutual funds, stock market derivatives

•Listing of securities

National Clearing Centre

•FX clearing•Securities

clearing

Regional affiliatesand representative offices

MICEX– IT

•Soft- and hardware solutions

•Electronic trading floor for state purchases

St.-PetersburgYekaterinburg SamaraN. Novgorod Novosibirsk Rostov-na-DonuVladivostok Krasnodar Krasnoyarsk4

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MICEX Group: the national financial infrastructure

St.-Petersburg

Moscow

N. NovgorodNovosibirsk

Rostov-on-DonYekaterinburg

Vladivostok

Samara

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MICEX Group: structure of the volume of transactions

Daily average volume of transactionson MICEX Group markets, mln USD

2009 2010Jan-Oct 2011

FX market12,056.

010,549.

511,397.

9Federal bonds market

4,102.4 3,403.8 5,946.5

Cash equities market

3,358.5 3,998.1 6,309.6

Corporate and regional fixed income market

1,877.4 4,499.3 6,114.2

Derivatives market 76.7 200.3 120.2Commodity market(grain futures)

5.7 5.9 3.8

Total21,478

.722,661

.029,902

.0

Volume of transactionson MICEX Group markets

0

1000

2000

3000

4000

5000

6000

7000

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

bln USD

Commodity market (grain futures)

Derivatives market

Securities market

Federal bonds market

FX market

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MICEX: FX market

● Trading is held in six currencies:the US dollar, the Euro, the Bi-currency basket, the China yuan, the Ukrainian hrivna, the Kazakhstan tenge,the Byelorussian ruble

● Settlements on the currency market are effected on “today” and “tomorrow” basis

● Based on the results of trading on the MICEX, the Russian Central Bank fixes the official CBR exchange rate of the US dollar

● The volume of transactions in 2010 reached 2,616.3 bln USD, which is 13% less than in 2009

● The volume of transactions in January–October 2011 reached 2,336.6 bln USD, which is 9% more than in January–October 2010

Volume of transactions and the exchange rate of the dollar

0

200

400

600

800

1000

1200

1400

1Q2006

2Q 3Q4Q 1Q2007

2Q 3Q4Q 1Q2008

2Q3Q 4Q 1Q2009

2Q 3Q 4Q1Q2010

2Q 3Q 4Q1Q2011

2Q 3Q

bln USD

22

24

26

28

30

32

34

36

USD/RUR

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MICEX: the federal bonds market

● The MICEX organizes the primary placement and the secondary circulation of federal bonds and Bank Of Russia bonds (OBRs)

● The volume of transactions in 2010 reached 844.1 bln USD, which is 17% less than in 2009

● The RGBI Index increased in 2010by 2.5% to 130.67 points


● The RGBI Index decreased in January–October 2011 by 0.9% to 129.52 points

The volume of transactionsand the RGBI Index

100

105

110

115

120

125

130

135

1Q2006

2Q 3Q4Q 1Q2007

2Q3Q 4Q 1Q2008

2Q 3Q 4Q1Q2009

2Q3Q 4Q 1Q2010

2Q 3Q 4Q1Q2011

2Q 3Q

points

0

100

200

300

400

500

600

700bln USD

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MICEX: the nominal value of the federal bonds market

● The nominal value of the federal bonds market grew 9 times during 2004—2011 to 2.81 trillion RUB

● The share of OFZ-AD in the nominal value of the federal bonds market — 33.3%; OFZ-PD — 66.7%

● The market value of the federal bonds market reached 2.79 trillion RUB (93.4 bln USD) by the October 31, 2011

● Turnover velocity of the federal bonds market in January–October 2011 was 118.2%

0

0,5

1

1,5

2

2,5

1H 2006

2H 1H 2007

2H 1H 2008

2H 1H 2009

2H 1H 2010

2H 1H 2011

trillion RUB

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MICEX SE: the equities & bonds market

● The MICEX Stock Exchange —the leading stock exchange in Russia

● In 2010 the MICEX SE’s share in the Russian equities & bonds market turnover reached 95%

● The volume of transactions in 2010 reached 2,108.4 bln USD, which is 62% more than in 2009


Turnover on Russian exchangesin 2008–2011, bln USD

2008 2009 2010Jan–Oct

2011

MICEX SE 1,985.6

1,304.2

2,108.4

2,548.9

RTS 13.0 54.2 118.5 109.5

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MICEX SE: the equities & bonds market

Issuers on the MICEX SE

2009* 2010* 2011*October 31,

2011

Total number of issuers

773 690 693 653

Issuers of equities

232 234 249 254

Issuers of bonds

503 417 391 346

* at beginning of the year

Number of issuers on the MICEX SE(* – at begining of the month)

232

234

249

254

503

417

391

346

0 100 200 300 400 500 600

2009

2010

2011

November2011*

BondsEquities

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MICEX SE: cash equities market

● 307 equities of 254 issuers are tradedon MICEX SE

● 90 equities of 95 issuers are listedon MICEX SE, including such companies as LUKOIL, Rostelecom, Sberbank and VTB

● The volume of transactions with equities in 2010 reached 991.5 bln USD, which is 19% more than in 2009

● The volume of transactions with equities in January–October 2011 reached 1,293.5 bln USD, which is 61% more than in January–October 2010

● The MICEX Index reached 1,498.60 points by the October 31, 2011(from the beginning of 2011, а increase of 9.7%)

Volume of transactions andthe MICEX Index

0

100

200

300

400

500

1Q

2006

2Q3Q4Q1Q

2007

2Q3Q4Q1Q

2008

2Q3Q4Q1Q

2009

2Q3Q4Q1Q

2010

2Q3Q4Q1Q

2011

2Q3Q

bln USD

0

500

1000

1500

2000

2500points

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MICEX SE: equities market capitalization

● Equities market capitalization increased6.5 times during 2004—2011

● Equities market capitalization decreased in January–October 2011 by 9% to 864.7 bln USD

● The most capitalized companies are:۰ Gazprom — 143.6 bln USD۰ Rosneft — 77.9 bln USD۰ Sberbank — 50.0 bln USD

● Turnover velocity of the equities market in January–October 2011 was 63.7%, which is 9.2 percentage points more than in January–October 2010

0

200

400

600

800

1000

1200

1400

1H 2006

2H 1H 2007

2H 1H 2008

2H 1H 2009

2H 1H 2010

2H 1H 2011

bln USD

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MICEX SE: the MICEX Index dynamics

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MICEX SE: corporate and regional fixed income market

● 739 bonds of 342 issuers are traded on MICEX SE. The total nominal value of corporate and regional bonds in circulationis 122.2 bln USD (as of October 31, 2011)

● 458 bonds of 216 issuers are listedon MICEX SE

● The volume of transactions with corporate and regional bonds in 2010 reached 1,115.8 bln USD, which is 2.4 times more than in 2009

● The volume of transactions with corporate and regional bonds in January–October 2011 reached 1,253.4 bln USD, which is 41% more than in January–October 2010

● In June 2009, a record-high volume of corporate bonds was placed on the MICEX SE. The volume of placements amounted to 201.8 bln RUB

Nominal value of corporate and regional bonds in circulation, bln USD

0

20

40

60

80

100

120

140

1Q

2006

2Q 3Q 4Q 1Q

2007

2Q 3Q 4Q 1Q

2008

2Q 3Q 4Q 1Q

2009

2Q 3Q 4Q 1Q

2010

2Q 3Q 4Q 1Q

2011

2Q 3Q

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MICEX SE: the nominal value of the corporate bonds market● The nominal value of the

corporate bonds market grew 22 times during 2004—2011 to 100.7 bln USD

● The market value of the corporate bonds market reached 58.8 bln USD by the October 31, 2011

● The biggest issuers in terms of the nominal value of bonds issues:۰ RZD — 6.5 bln USD۰ Transneft — 4.5 bln USD۰ Rossekhozbank — 3.5 bln USD

0

20

40

60

80

100

120

1H2006

2H 1H2007

2H 1H2008

2H 1H2009

2H 1H2010

2H 1H2011

bln USD

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MICEX SE: the nominal value of the regional bonds market● The nominal value of the regional

bonds market grew 9.2 times during 2004—2011 to 21.9 bln USD

● The market value of the regional bonds market reached 8.8 bln USD by the October 31, 2011

● The biggest issuers in terms of the nominal value of bonds issues:۰ City of Moscow — 14.4 bln USD۰ Moscow region — 1.4 bln USD۰ Samara region — 0.8 bln USD

0

5

10

15

20

25

1H2006

2H 1H2007

2H 1H2008

2H 1H2009

2H 1H2010

2H 1H2011

bln USD

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MICEX: the derivatives market

● The instruments traded in MICEX derivatives market are: currency futures, futures on OFZ baskets, interest rates futures, Micex Index futures, single stock futures (Gazprom, Sberbank, Norilsk Nickel, LUKOIL)

● Total trading volume in October 2010 — October 2011 — 42.2 bln USD

● End-of-October open interest — 681.5 mln USD

● Record daily volume — 2.1 bln USD

The daily average volume of transactions and open interest, mln USD

0

500

1000

1500

2000

Oct2010

Nov Dec J an2011

Feb Mar Apr May J une J uly Aug Sep Oct

Open interest

0

100

200

300

400

Trading volume

Trading volume Open interest

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MICEX Group: clearing and settlement

Depositing of funds

Multilateral clearing with netting

Settlements

for currency

for securities

for rubles

Registration of transactions

Federal bonds market

Securities market

Currency market Derivatives market

NCCvia accounts with

J.P.Morgan Chase Bank; VTB BANK (Deutschland)

AG and others

hard currency

securities

rubles

J.P.Morgan Chase Bank;

VTB BANK (Deutschland) AG and

others

MICEX MICEX SE MICEX MICEX SE

(stock assets)

MICEX(non-centralized)

MICEX(centralized)

National Clearing Centre

(centralized)

NSDNCCvia accounts with NSD

MICEX (centralized

)

NSD(eurobonds)

National Settlement Depository

NSD(eurobonds)

NSD

2020

MICEX SE: listing requirementsRequirement А1 А2 B V I

Maximum share of one shareholder and affiliated parties

75% 75% 90% — —

Minimum Market capitalization, RUBCS — 10 blnPS — 3 bln

CS — 3 blnPS — 1 bln

CS — 1,5 blnPS — 500 mln

—CS — 60 mlnPS — 25 mln

Min. volume of bonds offered, RUB 1 bln 500 mln 300 mln 300 mln —

Minimum establishment of the company 3 years 3 years1 year

(сomm.рapers — 3 years)

3 years(bonds — 6

months)—

Profitability2 years of last

32 years of last 3 —

Stocks — 2 years of last 3

—

Min. monthly trading volume for last 3 months to enter the list, RUB*

Stocks — 25 mln

Bonds — 10 mln

Stocks — 2,5 mln

Bonds — 1 mln

Stocks — 1,5 mlnBonds — 0.5 mln

— —

Min. average monthly trading volume to maintain listing, RUB (the last 6 months)

Stocks — 50 mln Bonds —

25 mln

Stocks — 5 mln Bonds — 2,5

mln

Stocks — 3 mln Bonds — 1 mln

—Stocks —1 mln**

Issuer’s observance of the Corporate Governance norms

Stocks

The formalized requests on observance of the Corporate Governance norms with confirmation documents

Bonds

The formalized requests on observance of the Corporate Governance norms with confirmation documents

— — —

Financial accounting IAS / US GAAP — — —

Issuer’s credit rating and/or issue of bondsby a credit agency

Obligatory — — — —

* requirement does not apply to commercial papers **the last 2 months

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MICEX: leader among exchanges of the CIS and CEE

● The capitalization of the Russian stock market is 56% of Russia’s GDPin 2010 or 864.7 trillion USD(as of November 1, 2011)

● The volume of trading in the Russian stock market is over 63% of the stock market of the countries of the CIS, Central and Eastern Europe combined

● The MICEX SE is among the world’s 20 largest stock exchanges

The volume of trading on the equities market in January–October 2011

and the number of issuers

# ExchangeTurnover,USD bln

Number of issuers

1 NASDAQ OMX 24,816.25 2,706 2 NYSE Euronext (US) 16,671.00 2,306 3 Tokyo SE Group 3,812.00 2,284 4 Shanghai SE 3,249.24 927 5 London SE Group 3,075.16 2,893 6 Shenzhen SE 2,440.59 1,377 7 NYSE Euronext (Europe) 2,061.38 1,125 8 Korea Exchange 1,744.12 1,803 9 Deutsche Börse 1,655.69 744

10 BME Spanish Exchanges 1,337.82 3,280 11 TMX Group 1,322.53 3,925 12 Hong Kong Exchanges 1,274.16 1,472 13 Australian SE 1,213.48 2,019 14 BM&FBOVESPA 801.49 377 15 SIX Swiss Exchange 790.49 282 16 Taiwan SE Corp. 786.78 812 17 NASDAQ OMX Nordic Exchange 786.07 76718 National Stock Exchange India 514.37 1,631 19 MICEX 461.27 255 20 Johannesburg SE 394.84 39821 Istanbul SE 363.59 359 22 Singapore Exchange 253.37 772 23 Saudi Stock Market - Tadawul 238.69 149 24 Oslo Børs 228.66 238 25 The Stock Exchange of Thailand 203.00 542

Source : World Federation of Exchanges

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MICEX Group: advanced information technologies● The base of the structure of the

global MICEX trading network are the two data centers: main and reserve center

● The hard- and software complex is built on the Hewlett-Packard UNIX-servers (about 100)

● About 700 000 clients are connected to the trading system

● MICEX trading complex currently processes :۰ up to 2 000 000 orders a day۰ up to 850 000 transactions a day

● The trading infrastructure is supported by 6 providers of telecom services. More than 1500 workplaces and more than 300 electronic broker systems (via the Internet gateway provided by the MICEX) have access to the trading network

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MICEX Group: IT Infrastructure

Regional Access Centers

Market Information

Dissemination Systems of Information

Agencies

Electronic Broker Systems

connected to Regional Centers

Trading Members connected to

regional Centers

Trading Members connected via

Trading Network

Clients of Electronic Brokers

connected to Regional Centers

Electronic Broker Systems

Clients of

Electronic

Brokers

Trading Members connected via MICEX Internet Access

Systems

Clients of Electronic Brokers connected via

Internet

Clients receiving Market

Information via Internet

Trading Halls Internet Access

System

Web-server

MainComputer

Center

Back-upComputer

Center

Wide-area telecom Wide-area telecom infrastructure (“MICEX infrastructure (“MICEX

Trading Network”)Trading Network”)MICEXMICEX

InternetInternet

Telecom Providers

Core Telecom Infrastructure

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Contacts

● Address:۰ 13, B. Kislovskiy per., Moscow, 125009, Russia

● Telephone:۰ +7 495 234-48-11

● Fax:۰ +7 495 705-96-22

● E-mail:۰ [email protected]

● Web-server:۰ www.micex.com

Prepared by Information and Analysis Division of MICEX

MICEX Group

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