CEE Equity Weekly

Nr. 38 /29 09 Highlights

50 bp key rate hike above expectations in Hungary EU Commission gave green light for Bulgaria's and Romania's accession to the EU Gazprom decides to leave Gazprom Neft as a listed company and to expand the oil business

Companies mentioned in this report Oil & Gas Pharma & Chem. Telecom & IT Banks Other Croatia

Czech Republic

Hungary

Poland BRE

Romania Rompetrol Petrom Russia Gazprom Neft Uralkali

Serbia Dunav Osiguranje

Slovenia Telekom Slovenije Pozavarovalnica Sava

Index Performance Index Performance 17/08 1w (%) 1m (%) 3m (%) 200 BUDAPEST (BUX) BUX 21,971 1.0 0.4 8.9 CROATIA CROBEX 180 PRAGUE SE PX WIG 20 2,949 0.2 2.0 3.5 ROMANIA BET (L) PX 1,449 1.2 2.4 9.7 RUSSIA RTS 160 WIG 20 RTSI 1,559 1.6 -5.1 10.2

BET 7,928 1.2 4.3 20.0 140 Source: Reuters, Raiffeisen Centrobank

120 Market Data P/E 06 P/E 07 EPS chg. 06 EPS chg. 07 100 BUX 12.3 11.8 13.6 4.8 80 WIG 20 11.8 11.4 14.7 3.6 PX 50 16.8 13.9 25.6 20.9 60 RTSI 10.5 10.1 13.6 3.3 ON D J F MA M J J AS

Source: Thomson Financial Datastream, Raiffeisen Research Source: Thomson Financial Datastream, Raiffeisen Centrobank CEE Weekly 29/09/06

Croatia News & Outlook

“Stagnation at a high level” was the motto for investors on the CROBEX - Technical analysis

Croatian stock market. The stock market barometer CROEMI 07Dec05 - 14Oct06 Pr Pr 2600 2600 performed a classic sideways trend in the past week under review – 2520 -> 2470 2500 2500 neither buyers nor sellers were able to push the market in any one 2400 2400 2300 2300 direction. Maybe also the thin news-flow is a culprit as well, which 2200 2200 2100 2100 keeps investors idle at the moment. The planned IPO of the 2000 2000 1900 1900 state-owned oil and gas company INA (the Hungarian MOL already 1800 1800 1700 1700 owns a 25% stake) should provide somewhat more momentum again. Dec05 Jan06 Feb Mar Apr May Jun Jul Aug Sep Oct Last: 2,561.50 The sale of 15% of the group on the Zagreb and London Stock Since 2,200 the trend-channel’s Exchanges is planned as early as November. Also the planned IPO width-increase was expected and thus 2,490. Now that it’s beyond 2,520 of 20% of the Croatian Telecom (Deutsche Telekom already owns (-> 2,470 – 2,300) it might even hit 3,000. 51%) should attract interest from international investors. We therefore Source: Reuters, Raiffeisen Centrobank maintain our long-term positive view of the Croatian stock market, even though temporary share price corrections and recovery phases are integral parts of the share price trend.

Wolfgang Steger

2 CEE Weekly 29/09/06

Czech Republic News & Outlook

The Czech stock market showed diverse trends in the past week under PX - Technical analysis

review. In the first half of the week the sellers had the upper hand 06Feb06 - 13Oct06 Pr Pr CZ K CZ K because of the announced partial privatisation of the majority 1550 1475 -> 1550 - 1580 1550 1500 1500 state-owned energy group CEZ, while in the second half of the week 1450 1450 1400 1400

buyers outnumbered sellers. This bounce-back is also due to CEZ. The 1350 1350

1300 1390 -> 1300 1300

Czech finance minister disclosed that the state now plans to sell only 1250 1250 7% of the shares. Original plans called for a sale of up to 16% by the 1200 1200 1150 1150

state. Moreover, the partial privatisation is not yet considered a Feb06 Mar Apr May Jun Jul Aug Sep Oct foregone conclusion, as the minority government still has to face a last: 1,448.70 Falling-resistance-line has been hit, sell vote of confidence at the beginning of October. Apart from triggered at 1,430 (-.> 1,410 – 1,390 – fundamental news, some investors exploited the previous share price 1,350), but again bullish once confirmation at 1,480 (-> 1,580) is diminishing. losses of CEZ as an attractive buying opportunity. Macroeconomic Source: Reuters, Raiffeisen Centrobank data is still largely positive for the Czech stock market. Nevertheless, the estimated market P/E ratio of 17 (excl. Erste Bank) for 2006 is already higher than that of some Western stock indices.

Wolfgang Steger

3 CEE Weekly 29/09/06

Hungary News & Outlook

During the past two weeks, the Hungarian stock index BUX registered BUX - Technical analysis

a moderate decrease in response to the self-criticism of Prime 22Sep05 - 16Oct06 Pr Pr Minister Gyurcsány that was leaked to the public. The trigger was 25000 25000 24000 24000

that the prime minister conceded in an internal meeting that his 23000 23000 government had been lying throughout the past one and a half years 22000 22000 21000 21000

and that it had done nothing to be proud of during the legislative 20000 20000

period 2002-2006. The following protests remained the central issue 19000 19000 18000 18000 also in the past week under review. The situation has already calmed Sep05 Oct Nov Dec Jan06 Feb Mar Apr May Jun Jul Aug Sep Oct down somewhat in the meantime, but it should be noted that Last: 22,332.00 Bearish wedge-pattern, stop has been municipal elections will take place on Sunday (October 1, 2006). We triggered at 21.530 (-> 20,770 – 19,600), believe that the political uncertainties will not persist for too long and but again bullish if in above on 22,800. should be dispelled again at the latest when the Socialist Party will Source: Reuters, Raiffeisen Centrobank elect a new party chairman at its party congress towards the end of October. Also the National Bank of Hungary provided a surprise as it hiked the key rates by 50 basis points to 7.75% on Monday. Although the market was anticipating an increase, only 25 basis points had been expected. We maintain our positive stance regarding the Hungarian stock market in the long term, not least because we consider the market valuation still moderate with a P/E ratio of 11.8 based on expected earnings for 2007.

Andreas Schiller

4 CEE Weekly 29/09/06

Poland News & Outlook

The Polish stock market barometer WIG 20 was unable to WIG20 - Technical analysis

completely shrug off uncertainties concerning its own government 07Dec05 - 14Oct06 Pr Pr 3300 3300

and the (receding) protests in Hungary and also registered a 3200 3200

3100 3100

moderate decline in the past week under review. After protracted and 3000 3000 repeated problems, the ruling head of government, Kaczynski, now 2900 2900 2800 2800 finally appears to have dissolved the coalition government with 2700 2700 2600 2600

Andrzej Lepper (Self-Defence Party). The search for a new and 2500 2500 stable partner has been relatively difficult to date, so that we believe Dec05 Jan06 Feb Mar Apr May Jun Jul Aug Sep Oct Last: 2,924.00 that early elections are a fairly realistic scenario. In our opinion, this Diamond-pattern might get left behind at development should not have a negative impact on the local stock 3,230 (-> 3,350 – 4,000), stop 3,000 (-> 2,950 – 2,900) has been triggered though, market, as it also gives the Civic Platform, which is more thus drop 2,700 possible. Bull sign 3,020 economy-friendly, a new chance. The increased political uncertainty (-> 3,120). (whether or not new elections will take place) will probably continue Source: Reuters, Raiffeisen Centrobank to exert a dampening effect on the Polish stock market in the short term. In the medium and long term, by contrast, we maintain our positive stance, all the more so because the valuation of the Polish stock market can still be considered moderate: the P/E ratio (excl. Grupa Lotos and the Hungarian MOL) based on expected earnings for 2007 stands at 11.8. Andreas Schiller

On Tuesday, the negotiations on the purchase of Skarbiec Asset BRE Management Holding (SAMH) by Enterprise Investors’ private equity -

fund from BRE were concluded – as an effect the bank signed an 260

agreement on the sale of 100% of the shares in the holding (and the 240

shares of Skarbiec TFI and BRE Agent Transferowy, owned by the 220

holding) for PLN 155 mn. Skarbiec Investment Management (SIM – 200

managing private banking customer portfolios, owned by SAMH) 180 will be bought by the bank from SAMH for PLN 10 mn. Prior to the 160 transaction, SAMH will also buy back its shares from BRE bank for 140 PLN 62 mn. Including all the elements of the transaction, the 120

100 purchase price amounts to 6.6% of the assets under management, ON D J F MAMJ J AS OND J F MAMJ J AS BRE BANK which is quite generous for the Polish market. WARSAW GENERAL INDEX 20 - P I

Source: Thomson Financial Datastream, The net impact of the transaction for next year’s pretax profit will Raiffeisen Centrobank amount to PLN 100 mn. The amount will represent a one-off, which will show in the bank’s financials next year and which is likely to constitute an argument for a dividend. The sale of SAMH will however have some negative impact on the group’s financials going

5 CEE Weekly 29/09/06

forward. In 1H 2006, SAMH generated a profit of PLN 15 mn and the consolidated fee revenue from fund management amounted to PLN 62.8 mn. Following the sale, the consolidated revenues and the costs will be accordingly lower. However, since the bank will continue to distribute mutual funds and receive both distribution and management fees, the negative impact will most likely be negligible. The disposal of its own mutual fund, SAMH, is in line with BRE’s strategy of “open architecture”. Magdalena Mazuga

6 CEE Weekly 29/09/06

Romania News & Outlook

The Romanian stock market barometer BET continued its upward BET - Technical analysis trend also in the past week under review. Once again, the heavily 06Feb06 - 13Oct06 Pr Pr 8400 7760 -> 7300 8400 weighted oil shares were at centre-stage. In the past week Petrom 8200 7900 -> 8530 8200 8000 8000 convinced investors with an acquisition, among other news: the 7800 7800 7600 7600 group announced the acquisition of a 75% stake in oil exploration 7400 7400 7200 7200 7530 -> 7330 - 7200 projects in the Russian Federation. Moreover, the company confirmed 7000 7000 6800 6800 the opening-up of an important oilfield for the Caspian region. 6600 6600 6400 6400 Rompetrol Rafinare, the second “oil heavyweight” in the leading Feb06 Mar Apr May Jun Jul Aug Sep Oct Last: 7,925.00 Romanian BET index, plans to expand its filling station network Symm triangle and buy 7,780 (-> 7,900 - beyond Romanian borders. About 200 filling stations are to be 8,100) has been triggered, but bounce-back established in Ukraine in the next two years. Apart from the stock to about 7,730 not impossible yet. market, positive news came from the EU Commission, which gave the Source: Reuters, Raiffeisen Centrobank green light for Romania’s (and Bulgaria’s) accession to the European Union on January 1, 2007. In the short term, this decision will probably have no effect on the Romanian capital market, though, because the market had already completely priced in this decision before. Wolfgang Steger

In a press release to the Bucharest Stock Exchange (BSE), Petrom (SNP) Petrom announced that it has signed an agreement for the acquisition of -

74.9% in Cyprus-based Ring Oil Holding & Trading Ltd., a company 0.65

specialized in exploration and oil production as well as oil and 0.60 petroleum products trading and wells drilling. The acquired entity owns 0.55 six Russian companies that in turn hold a prospective exploration 0.50 0.45 portfolio in the Federation, which consists of eight exploration licenses 0.40

in the Saratov area and one exploration and production license in the 0.35

Komi area. Both regions are located within 1000 - 1200 km east of 0.30 Moscow. The proved reserves amount to 13 mn boe according to the 0.25

0.20 Russian standards. ON D J F MAMJ J AS OND J F MAMJ J AS SNP PETROM Oleg Galbur ROMANIA BET (L) - P I

Source: Thomson Financial Datastream, Raiffeisen Centrobank

7 CEE Weekly 29/09/06

According to media reports, on September 26 the Bucharest Court of Rompetrol Appeal has confirmed the decision of a lower Court to lift the Buy

distress placed upon a number of 5.46 bn shares (25.8%) in Rompetrol 0.18 Rafinare (RRC) held by The Rompetrol Group (TRG). The decision to lift 0.16 the distress has been taken by the lower Court on July 14. On March 0.14 7, 2006, the General Prosecutor's Office has levied distress on the 0.12 aforementioned shares. At that time, company officials claimed that the 0.10 measure was unfounded and could harm both the RRC shares liquidity on the Bucharest Stock Exchange (BSE) as well as the 0.08 company's ability to raise funding for its capex projects at acceptable 0.06

0.04 costs. Dinu Patriciu, TRG's main shareholder (80%) and CEO, will be ON D J F MAMJ J AS OND J F MAMJ J AS ROMPETROL REFINERY prosecuted in the Rompetrol file, with October 2, 2006 set for the first ROMANIA BET (L) - P I hearing. Mr. Patriciu is charged, among others, with money Source: Thomson Financial Datastream, laundering, capital market manipulation and insider trading. Our Raiffeisen Centrobank recommendation on RRC currently is “buy”. Oleg Galbur

8 CEE Weekly 29/09/06

Russia News & Outlook

The Russian stock market did not have a promising start into the past RTSI - Technical analysis

week. The RTSI closed at its lowest level of the past three months on 31Jul06 - 30Sep06 Pr Pr USD USD Monday. Once more, the very weak lead given by the oil markets 1640 1640 1620 1620 was the reason for this development. Well-stocked US inventories for 1600 1600 1580 1580

1560 1560 crude oil, gasoline and heating oil increasingly alleviate fears of 1590 -> 1400 1540 1540 supply bottlenecks. Many investors seized these levels to enter the 1520 1520 1500 1500 market again and immediately benefited from a small bounce-back 1480 1480 1460 1460 of the oil price, which we consider overdue anyway. The USD 60 31Jul06 07Aug 14Aug 21Aug 28Aug 04Sep 11Sep 18Sep 25Sep mark (WTI future) does not (yet) appear to lose its significance as a Last: 1,543.00 Fibo at 1,540 hit, thus raid versus 1,590 major support. Firstly, several of OPEC’s oil ministers have made it expectable, stop 1,515 (-> 1,460). clear that they consider this price level desirable (i.e. another oil Source: Reuters, Raiffeisen Centrobank price decline would raise the likelihood of production cutbacks by OPEC) and secondly, the Iranian President Ahmadinejad once again has clearly stated that he does not want to do without peaceful utilisation of nuclear energy. On the corporate front Rosneft demonstrated interest in the acquisition of many other assets of the former oil giant YUKOS, including both production and refining as well as marketing units.

Hannes Loacker

Russia’s No. 5 oil producer Gazprom Neft released promising Gazprom Neft preliminary 1H 2006 US GAAP figures that marginally beat market -

expectations. Revenues surged 78% yoy to USD 10.2 bn while net 9 income rose by 29% yoy to USD 1.8 bn. The company expects that its 8 total net profit for 2006 will be USD 3.6 bn. 7

6 Perhaps more important was the strategic decision of Gazprom’s board of directors to leave Gazprom Neft as a stand-alone public 5 company. We believe that this formulation of Gazprom Neft’s strategy 4 towards the capital markets, along with ambitious production plans 3

2 announced this week, should support the oil company’s investment ON D J F MAMJ J AS OND J F MAMJ J AS GAZPROM NEFT case. MSCI RUSSIA - P I

Source: Thomson Financial Datastream, This week Gazprom’s board of directors approved plans to expand the Raiffeisen Centrobank gas giant’s oil business, with Gazprom Neft as the hub. Under the plan, Gazprom's oil production is set to increase to 80 mn tons by 2020, implying an average annual production growth of 4%. Currently, Gazprom Neft's oil production is about 33 mn tons per annum, while

9 CEE Weekly 29/09/06

Gazprom's annual oil production is about 1 mn tons. The plan suggests the development of Gazprom Neft's existing oil reserves, as well as the acquisition of new oil assets. Gazprom Neft also plans to increase its downstream capacity and to develop a retail network.

According to Gazprom Neft President Alexander Ryazanov Gazprom’s board also agreed that Gazprom’s oil assets will be transferred to Gazprom Neft once the mother company secures the 20% Gazprom Neft stake currently owned by YUKOS. After that, Gazprom Neft may increase its free float to 15% from the current 4%.

Anna Yudina

Russia's Uralkali, the world's second-largest potash producer, has set Uralkali a USD 10.25 - 12.25 per GDR price range for its upcoming -

initial public offering on the London Stock Exchange, implying a 2.20 market capitalization of USD 4.3 - 5.2 bn. The GDR price translates 2.00 to USD 2.05 - 2.45 per domestic share, which is higher than the 1.80 1.60

current mid-market price on Russia's RTS exchange of USD 1.93 1.40

(as of September 28). The company is expected to offer up to 1.20 442,722,876 common shares, a 20.84% stake. 1.00 0.80

0.60

Although we like Uralkali for its excellent reserve base, good cash 0.40

0.20 generation ability, low operating costs and fair dividend policy, we ON D J F MAMJ J AS OND J F MAMJ J AS URALKALIY believe that that the valuation implied by the proposed price levels MSCI RUSSIA - P I

are a little stretched. The company currently trades at a 2006e Source: Thomson Financial Datastream, EV/EBITDA of 10, which is in line with the valuation of Canada's Raiffeisen Centrobank PotashCorp. It will likely be quite difficult for the market to absorb almost USD 1 bn worth of new shares. Anna Yudina

10 CEE Weekly 29/09/06

Serbia News & Outlook

BELEX- Technical analysis The Serbian stock market index Belex fm climbed to a new all-time 20Feb05 - 20Oct06 Pr Pr

high (1,793 points) at the beginning of the week under review, 1750 1750 thanks above all to significant share price increases of several 1700 1700 1650 1650

small-cap enterprises. However, the celebrations were only 1600 1600 short-lived because the high could not be defended in the subsequent 1550 1550 1500 1500

days. The main news this week again comes from the banking 1450 1450

1400 1400 market: Hypo Alpe-Adria-Bank, the fourth largest bank on the Jan05 Mar May Jul Sep Nov Jan06 Mar May Jul Sep Serbian market, will float on the Belgrade Stock Exchange on Last: 1,788.92 October 2. The bank’s capital consists of a total of 4,320,471 shares, Trend-channel might get doubled in width once beyond 1,800 (-> 1,900), stop 1,750 each with a nominal value of CSD 2,000. A total of 2,249,271 (-> 1,700)

shares have been registered for trading and will be floated at an Source: Reuters, Raiffeisen Centrobank initial price of CSD 2,087 per share. Austria’s Hypo Alpe-Adria-Bank International owns 99.8% of the Belgrade-based bank, according to the Central Securities Depository. According to the bank’s officials the aim of the decision is to buy out remaining minority shareholdings. If the bank does not manage to redeem the shares through trading on the BSE in the first 3 months, they become eligible to announce a takeover bid, and then the squeeze-out process may follow. Aleksandra Vukosavljevic

Dunav Osiguranje (DNOS) boosted its stake in Bosnia’s Kosig Dunav Dunav Osiguranje Osiguranje to a majority holding. Dunav has acquired an additional - 30.7% of Banja Luka’s Kosig Dunav Osiguranje, raising its stake in 6000 the company to 59.5%. The UK’s Finance Central Europe magazine

named Dunav Kosig Osiguranje the best insurance company 5000 in Republika Srpska in 2005 and the sixth-largest insurer in Bosnia-Herzegovina by capital and total premiums. Furthermore, in 4000 late May 2006, DNOS bought out a majority stake in pension fund 3000 Dunav-TBI. By acquiring a 51% stake in the pension fund, DNOS

became the sole owner of Serbia’s largest pension fund that has over 2000 60,000 members and a capital of over EUR 7 mn. The agreement JFMAMJJASONDJFMAMJJAS DUNAV OSIGURANJE also gave the company ownership of TBI Stockbroker. DNOS BELEX FM

currently trades at a price of CSD 4,980 (EUR 61) with a P/B Source: Thomson Financial Datastream, ratio of 3.51. Raiffeisen Centrobank Aleksandra Vukosavljevic

11 CEE Weekly 29/09/06

Slovenia News & Outlook

The insurance company Pozavarovalnica Sava announced a takeover bid for the Serbian insurance company Polis osiguranje. The market capitalization of Polis osiguranje, which is listed on the Belgrade Stock Exchange, is EUR 12.2 mn. Pozavarovalnica Sava recently purchased the insurer Dukagjini in Kosovo and disposed of its Croatian subsidiary Helios Osiguranje. The majority owner of Pozavarovalnica Sava, which is not listed on the stock exchange, is the state-owned Slovenian Restitution Fund. Darco Kovacic

On September 18, 2006, the Board for the admission of securities to trading on the Ljubljana Stock Exchange adopted the decision to admit 6.5 mn TLSG shares of Telekom Slovenije, d. d., Ljubljana, with a total nominal value of SIT 65,355 mn to trading on the official market. The first day of trading is Monday, October 2, 2006. The company’s board of managers issued its »Prospectus for the Listing of Shares of Telekom Slovenije, d.d.« on its own website and on the Ljubljana Stock Exchange's website. Telekom Slovenije has committed itself to abide by the high reporting standards imposed on listed companies, while its business performance and the schedule for its privatisation will thus become subject to direct scrutiny from domestic as well as international market participants. Darco Kovacic

12 CEE Weekly 29/09/06

Top Winners and Losers of the previous week

Company Performance Company Performance YUKOS +20.0% Gazprom neft -3.8% Rompetrol +4.6% MTS -3.3% Rostelecom +4.2% Vimpelcom -2.9% OTP +4.0% Matav -2.7% Surgutneftegaz +3.9% Impact -2.4%

Significant Changes on our Research Opinion

There are no Significant Changes on our Research Opinion this week.

13 CEE Weekly 29/09/06 . l f

% 40 e e r F 7 850 42 w o L k e e 7 w

2 206 112 41 5 h 8,790 5,120 89 g i 137.00156.50 41.20 75.80 53 116.00 30 53.00 33 H e 7 3 4 4 7 0

1.03 74.00 27.40 53 5.0 4.1 0 11.5 20.15 2 e 7 7 6 0 0.14 0.22 5.15 2.25 49 3.03 0 2 S P 7 7 E 5 0 0 9.24 10.10 11.20 220 153 40 0.12 0.13 0.13 1.85 1.06 49 -0.86 1.19 1.02 30.00 12.20 71 2 1,329 1,285 1,300 19,700 8,680 22 7 7 7 7 4 0 235 235 244 265 3,325 3,236 40 0 2 e 7 7 0 13.4 949 1,389 1,909 2,23612.6 35.50 2.60 16.51 2.84 49 2.40 3.00 42.20 26.00 48 25.4 2.98 3.2 e 7 7 7 6 7.6 7.5 1,35 0 18.313.8 17.0 12. 1.51 1.73 2.05 2.21 40.8 29.1 1 35.4 22.5 0.15 0.1 16.9 24.4 9.78 8.99 7.2 R E P 7 7 7 7 4 5 0 11.0 10.2 10.2 0.0 7 4 .2 7. 0 4 19.3 10.112.5 13. 11.2 10.2 33.20 86.76 78.30 86.10 1,124 75 7 7 51 . 4 n p m a

c . D t k S U M e 6% 9,491 18.5 16. d i s p U 7 t

e m g r 2 a 1 t * ) * U e C c i L r ( P y c n e PLN 105.10 79.0 -25% 1,050 31.2 32.1 34. r USD 4.95 2.90 -41% 4,09 r u C . m m o L L Y HUF 18,300 U.R. - 260 8.1 7.9 12.5 12.1 1,121 1,348 1,461.0 1,515 18,800 10,155 19 c e HOLDHOLD PLN PLN 67.70 194.00 71.0 193.0HOLD -1% 5%HOLD 3,583 2,821 HUF 16.2 20.1HOLD 20.1 14.6 USD 19,850 18.4 13.6 21,600 HUF 16.6 14.1 1.32 9% 6.00 3.19 10,083 U.R. 45,000BUY 7.08 4.65 9.4 43,000 - 10.56 9. 8.3 4.99 -4% 11.71 4.81 7.2 3,908 PLN 11.3 214 75.00 11.2U.R. 16.1 56.50 20.16 2,030 109 11 30 16.1 2,406 24.20 18.0 2,750 20% PLN 2,014 1,779 9,002 2,345 26,665 182.80 12.4 17,700 2,803 14.2 65 U.R. 2,498 13.4 50,790 12.5 - 33,015 75 1.60 538 12.5 1.65 18.2 1.50 16.9 1.61 15.9 26.90 10.02 17.60 10.05 35 10.83 R T y n r y z a p m y o orris U.R. (SELL) CZK 9,786 U.R. - 8 C K / M R r E A o L t ip H l c i T e h CEZDEMASZEMASZ U.R. (BUY) BUY BU HUF CZK 19,600 19,600 781.00 915.00 0% 17% 338 20,786 11.4 29.0 11.8 25.4 13.0 16.2 11.9 13.3 1,336 22.10 1,445 30.80 1,513 48.10 1,642 58.70 19,600 14,230 873 39 523 32 BZ-WB PKO BP HOLD PLNPKN Orlen 37.50 BUY 39. KrkaPliva PLN HOLD 48.75 HOLD 74.80 SIT 53% USD 6,650 171,588 29.5 27.70 U.R. 4.4 26.10 6.5 -6% - 2,413 7.0 3,222 19.5 8.4 5.61 16.1 n.a. 11.05 n.a. 23.3 7.53 27.2 n.a. 6.96 4,329 1.4 70.20 6,364 43.70 72 6,501 8,020 174,000 151,276 71 FHB U.R. (HOLD) HUF 1,458 U.R. - 394 11.4 10.5 11.2 10.1 114 128 130 144 1,63 S Telefonica O2Magyar Telecom HOLD BUYO Adris CZKAgora HUF 446.00 880.00 U.R. (BUY) BUY U.R. U.R. HRK - - PLN 6,450 4,27 4,100 21.4 3,900 30.35 27.0 20.9 -5% 35.00 2,781 15.8 15% 17.30 7.6 409 19.40 13.5 48.1 21.30 n.a. 30.6 28.30 45.3 n.a. 548 29.5 463.0 304.0 390 1.19 49 n.a. 2.26 0.6 n.a. 4,300.00 3,013 100 TP S BRD-GSGBanca Transilvania HOLDOIL AND GAS Gazprom ADRs HOLDLUKoilMO U.R. (HOLD) RON RON USD BUY 1.04 18.10 43.42 1.08 18.00 USD U.R. 4% -1% 1,108 77.10 - 3,535 19.0 256,256 32.3 U.R. 15.2 13.6 27.5 26.0 3.9 22.6 - 20.8 4.4 65,523 18.5 0.05 7.6 0.23 5.0 10.9 0.08 0.50 6.40 10.3 0.04 11.20 0.80 0.05 9.9 9.80 0.98 5.20 1.51 8.60 20.00 7.10 0.86 14.00 53.60 85 41 22.04 7.50 35 7.80 96.00 60.00 50 Turbomecanica BUY RON 0.79 U.R. - 104 8.6 10.5 14.1 16.5 1.116 1.198 0.056 0.048 18.00 0.63 100 KGHM HOLD PLN 103.50 U.R. - 6,602 8.5 9.0 5.8 5.1 6.98 11.45 17.99 Komercni Banka BUY CZK 3,365PHARMACEUTICALS 3,850EGIS 14% 4,561 U.R HUF 8.8 14. 29,900 U.R. - 1,085 21.4 21.5 15. Norilsk NickelP BUY USD 123.00 U.R. - 6,050 6.6 13. MTS BUY USD 37.75 41.50 10% 13,891 13.3 12.3 15. Grupa Ket OTP BUY HUF 6,840 8,300 21% 7,156 11.1 11.5 9.8 8.6 504 606 698 79 RompetrolSurgutneftega BUY USDc 0.09 U.R. - 54,024 145.9 0.3 0.3 0.5 0.06 0.35 0.35 0.19 0.13 0.06 21 Vimpelcom BUY USD 60.94 U.R. - 12,650 23.3 16.5 18.5 16.1 1.55 2.69 3.30 3.78 63.51 37.50 41 28.09.2006BANKS Bank BPHBank Handlow HOLD PLN ( 810.00 U.R. - 7,419 22.4 22.6 20.4 18.2 27.44 35.78 39.74 44.50 850 560 25 ZentivaTELECOM AND I U.R. CZK 1,307.0 U.R. - 2,243 20.9 23.1 22.4 19.1 42.30 49.19 58.22 68.50 1,339 812 56 Pekao HOLD PLN 197.00 U.R. - 10,481 17.1 21.3 19.5 17.6 8.0 Gedeon Richte Rostelecom SEL TVN SEL CEE Master List U.R. Under Review ** Russian Stocks and Pliva company priced in USD

14 CEE Weekly 29/09/06

Latest Reports on request

Date Company Recommendation

19/09/06 Komercijalna Banka Hold 19/09/06 Banca Transilvania Hold 19/09/06 BRD-GSG Hold 19/09/06 PKO BP Hold 19/09/06 BZ WBK Hold 19/09/06 OTP Buy 19/09/06 Komercni Banka Buy 19/09/06 BA-CA Hold 19/09/06 Erste Bank Buy 12/09/06 Agora Buy 06/09/06 Turbomecanica Buy 31/07/06 Gedeon Richter Hold 13/07/06 Rostelecom Sell 05/07/06 Agora Buy 21/06/06 KGHM Hold 21/06/06 MTS Buy 21/06/06 Gedeon Richter Hold 12/06/06 MTS Buy 02/06/06 Vimpelcom Buy 30/05/06 Vimpelcom Buy 23/05/06 DÉMÁSZ Buy 18/05/06 OTP Buy 16/05/06 Podravka Hold 12/05/06 Pliva Hold 11/05/06 Gedeon Richter Hold 09/05/06 DÉMÁSZ Buy 04/05/06 MOL Under Review (Hold) 27/04/06 Vimpelcom Hold 21/04/06 CEE Telecommunications Report - 30/03/06 Podravka Hold 24/03/06 Agora Hold 24/03/06 Adris Buy 22/03/06 Krka Hold 17/03/06 Pliva Buy 13/03/06 Ericsson Nikola Tesla Buy 10/03/06 CEZ Buy 06/03/06 TVN Sell 02/03/06 Pliva Hold 28/02/06 Demasz Hold

15 Acknowledgements

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