GSS NEWSLETTER ISSUE 112 August 2010 2

Content Dear Clients 4 Interviews 5 Boris Cherkasskiy, Vice President for Development & Technology, Depository Clearing Company (DCC) 5 Interview with Alexander Artyukhin, Director of Development and Client Relations, NDC 7 Austria 10 Bank Austria: Industry will continue to stabilize over the summer 10 Index-Launch CECE and CEETX Fundamental 10 Belarus 11 UniCredit Bank Moscow starts operations in the New Market – Republic of Belarus 11 Bosnia and Herzegovina 13 The supervisory authorities of the financial sector in joint control of events in the market 13 Regular revisions by SASE and BLSE conducted in July 13 Bulgaria 15 A Step Forward to Enhancing the Activity of the Financial Regulator 15 Euromoney Recognizes UniCredit Bulbank as Best Bank in Bulgaria 16 Croatia 17 Croatia opens final three, closes two chapters 17 Atlantic Grupa buys Droga Kolinska 17 Dalekovod wins deal in Norway worth EUR 20 mn 18 Institut IGH participates in projects in Israel worth EUR 6 bn 18 Czech Republic 19 Central Securities Depository Prague opens for business 19 FinMin expects 2.5% economic growth in 2011 20 New Czech government 20 Hungary 21 Hungarian Power Exchange Started Operation on 20 July 2010 21 Hungarian Parliament Approved Package of Economic Bills 22 Kazakhstan 23 Trades volume on KASE increased by 19.4% and made up KZT 13.5 trn (USD 91.5 bn) 23 GS trades volume on KASE increased by 47.1% and made up KZT7 56.3 bn (USD 5,136.9 mn) 23 Repo transactions market volume gained 7.8% and made up KZT6.4 trn (USD 43.4 bn) 23 Kyrgyzstan 24

Issue 112, August 2010 3

Poland 25 NDS implemented SWIFT Message Support System 25 WSE one of the leaders of European IPO market in Q2 2010 25 Romania 27 Economy 27 Banking 27 Some foreign banks will increase exposure in Romania in the upcoming months 28 Stock Exchanges 28 New closed-end fund – iFund which brings Fund Proprietatea shares to the Stock Exchange soon 28 Romanian state puts up for sale EUR 450 mn-stakes on Stock Exchange 28 Russia 30 Legislation toughening of brokerage business 30 FFMS to allow unprofitable companies to be traded according to the highest standards 30 Government to choose between a radical ban for cross share ownership of parent and subsidiary companies and a soft option – mandatory disclosure of such ownership 30 Bonds of the CIS countries may soon begin placement on the Russian stock exchanges 31 Central Bank completed interest rates reduction cycle 31 Russia to place Eurobonds in rubles in 2010, 2011 31 FFMS amends the issue standards of RDR 31 Stock exchange increase insurance fund volume 32 FFMS announced the tender for suspicious transactions detection model 32 The issuers’ disclosure rules to be amended 32 FFMS drafted the Law on responsibility of the company management 32 Serbia 33 Serbian Central Bank performs another successful stress-test 33 Changes to the Law on National Bank of Serbia adopted 33 T-Notes scheduled auctions changes 34 Slovak Republic 35 Bratislava Stock Exchange Trading in June 35 UniCredit Bank the most active player on BSSE in 1st Half 2010 36 Revision of SAX Index Base 36 SAX Index base before and after revision 36 Slovenia 37 Unemployment Rate Flat at 10.6% in April over March 37 Government Adopts Euro Stability Bill 37 Ukraine 39 SSSMC of Ukraine imposed mandatory information disclosure on publicly listed and traded companies 39 Your Contacts 40 Disclaimer 43 Imprint 44

Issue 112, August 2010 4

Dear Clients

Alexander Nazarov (Head of GSS Russia)

It is my great pleasure to present ZAO UniCredit Bank and We have liaised with the Association of Global Custodians the Russian market in July edition of our GSS Newsletter. (AGC) to provide our regulators with the summary of the expectations of the global custody community and foreign Summer is the time of the year when we tend to think investors. Our general approach is to make the CSD the about holidays rather than financial markets. Not in Moscow, single final place of settlement for the professional market however, as this year the temperature is high not only in the participants and their clients. streets of the city, but also in its cabinets – the President of Russia announced a detailed action plan for building an ZAO UniCredit Bank is the largest bank with 100% foreign International Financial Center in the capital city of Russia. capital and one of the leading banks in Russia. We work hard Significant improvements in the legal and tax environment, to further strengthen our position in the securities market and technological infrastructure and market procedures have are proud to be able to share with you some recent achieve- been projected; drafts of the principal laws should be ments. Despite the continuing post-crisis market volatility, ready by 1 September 2010. Implementing only part of the GSS Russia managed to increase its year-to-date opera- measures over the coming five-six years will considerably tional volumes by more than 20%. Our team was joined by change the market, making it much more accessible to great markets experts with experience from Citi, Renaissance foreign investors. We believe that this is the major goal of Capital and MICEX. Our dedicated Product and Business the project. Development Unit focuses on increasing and diversifying our product range designed for different types of foreign and local The first huge step will be the creation of a central securities clients; several new products and services were offered to depository in Russia, a market development long awaited by our clients in the past months. In addition to new products international and domestic investors. The two currently exist- and services we also expand our market boundaries; last ing settlement depositories, NDC and DCC, have great ambi- month we launched custody operations in the Republic of tions to become the CSD in Russia. I would like to draw your Belarus establishing a direct link to the local CSD. Kindly note attention to the two interviews given by the top managers Belarus being added as our 16th market to this Newsletter. of the National Depository Center (NDC) and the Depository Clearing Company (DCC), in which they shared their views To conclude, I would like to thank all our clients and part- on the future of the market infrastructure in Russia and their ners for their confidence in the Russian market and ZAO expectations relating to the President’s project. You will find UniCredit Bank as a solid provider and reliable guide through both interviews in this Newsletter. the market. We will continue to use our position, market expertise and creativity to justify your confidence. ZAO UniCredit is an active participant of the project. Along with other international custodians operating in the Rus- Best regards, sian market we have initiated discussions and submitted proposals to the Central Bank and Federal Service for Financial Markets; the main goal of the proposals was to adapt the current CSD model to the requirements of Alexander Nazarov foreign investors. Head of GSS Russia

Issue 112, August 2010 5 Interviews:On the way to a single Central Securities Depository in Russia

Interviews: On the way to a single Central Securities Depository in Russia

Unification of the Russian depositories was one of the main topics discussed during the Russian Securities Forum, a major industry event held last month in Moscow, which UniCredit was proud to sponsor. As it was mentioned in one of the panel discussions, already 14 years ago the project first appeared on the agenda of the regulators. We have asked representatives of both, the DCC and the NDC, for their views.

Boris Cherkasskiy, Vice President for Development & Moreover, I believe the foreign nominee problem must be Technology, Depository Clearing Company (DCC) solved. If we pretend to be a financial centre, how can we live without a foreign nominee concept? Some are afraid of the nominee concept for non-residents. I think it is narrow- minded to think that once foreign nominees are allowed, the market would move away from Russia. In fact, we already have nominees, just under a different name: owners. At the moment we experience only disadvantages by hiding heads in the sand and treating real foreign nominees as owners.

How can a clearer structure of the depository system be achieved? Of course we must have something like a central depository. It may be one depository, but it may as well be a legalized CHS (Central Handling System). Moreover, we should aim at a simplification of the structure: ideally this would be a two level structure. On one level we would have CSD or CHS, whereas Boris Cherkasskiy the second level would be represented by custodians. Vice President for Development & Technology, DCC This does not mean that correspondent accounts between the custodians of the second level should be forbidden, but each of them must have a direct account in the central Boris, you are one of the pioneers of the Russian secu- depository system or in one of the two depositaries forming rities markets. How would you rate the current regula- the central clearing and settlement system. I don’t think this tory framework, considering that it is already more has to be implemented immediately, but the development than 10 years old? goes into this direction. I am convinced that we need amendments to the current framework. But usually people are afraid of changes and tend to think: “The system may not be excellent but it works. At the conference a single CSD has been discussed. Who knows what will we get instead?” In any case, any future What is your view? amendments have to be smart and in coordination with the In practice we have a bipolar system right now, but we need market participants. When constructing a new system, it a legally implemented CSD. It is still open how it shall be would make sense to obey the medical ethics principle: “First, constructed and how many CSDs we need – one or two. don’t do any harm”. If NDC were appointed the central depository, the DCC would not be able to keep its position as a custodian and would Where would you put an emphasis in reforming the soon lose its role as a settlement depository. We are not a system? bank and cannot compete with banks. The market would I think the first thing we need to do is to establish a solid legal lose DCC. We think this is not the best way of developing basis for the Russian CSD or CHS (Central Handling System). the central depository. For sure, for the development of our In addition to that we need a clearer distinction between market an evolution would be better than a revolution. depositories and custodians because our colleagues from the global custodians are often confused. For them it is hard We think that – at the first stage – we should take the existing to understand if there are any differences at all. There are, bipolar system and legalize it, if we decide that both settle- we only have to present them properly. ment depositories satisfy requirements. After that, a merger would certainly be the best for the market. This way no client would lose their service.

Issue 112, August 2010 6 Interviews:On the way to a single Central Securities Depository in Russia

Don’t you think the Russian settlement system is dif- Both, NDC and DCC are quite powerful and technologically ficult to deal with? advanced institutions. We have STP, efficient software (DCC, The system is a little bit complicated, but it works rather effi- for example, has released a new IT platform at the end of ciently, if you are smart and ready to use your brain. I don’t 2009), and both have well trained staff. DCC differentiates think we should break with our system only to satisfy our itself by being user-friendly and very customer-oriented. From foreign partners. Of course we must listen to them and be at its establishment, it has always had to persist in a competitive their service as much as we are for our domestic clients. But it environment, whereas NDC is a monopolist for some areas. does not mean that we immediately have to change everything.

Settlement through DCC, for example, works effectively. It The European securities markets are about to imple- decreases operational risk because settlement can be done ment stricter rules. What is the Russian view on these without involvement of a registrar. At the same time, it saves developments? clients’ time and money. But global custodians appear to be I do not think we are in a situation to benefit from European very conservative. When they see something they are not familiar problems. We prefer to have efficient and prosperous neigh- with, they tend to reject it. Maybe they should take a closer look. bours and partners. Nevertheless, a lot of central depositories from all over the world are watching the developments in the Leaning back and waiting until the CSD appears is a very European markets with “great interest” and “little surprise”. solid strategy, but you risk to lose the settlement efficiency However, the Russian regulators clearly have other things and hence to lose your clients. In our view, those custodians to worry about. who manage to make a realistic risk assessment and base their business on Russian settlement depositories will enjoy a great advantage. DCC has announced an electronic service for simplify- ing contacts between custodians and registrars. What are your plans? You mentioned the registrars, a peculiarity of the Rus- In summer DCC will start with a new service and UniCredit is sian market. Will they continue to exist on the long one of our first partners. After we receive a SWIFT message run? from our client (custodian), we will translate it into “register The registrar system is history and has to be taken as a fact. language” and send it to the registrar. This way we can help I am against a complete change and convinced that the reg- our clients in their daily contact with the registrars. istrars cannot be abolished. It is worth mentioning that some of them are rather powerful and technologically advanced It is a myth that we work with the registrars only on paper, institutions. Maybe their number has to decrease – we cur- we actually use STP electronic means of communication. rently have 49 – and the technical facilities have to improve. Those custodians, who want to work with registrars and are Russia is a big country, and it is not reasonable to have one afraid of the risk of the settlement depositaries, have to deal central register, since the registrars mainly serve the issuers. with a lot of registrars individually. At the same time, all the big custodians work with DCC via SWIFT, so we assist both In Belarus, for instance, the system has already been sim- parties to “translate” their communication. Interestingly, DCC plified. Registers now are called “Issuers’ depositories”, is among the 10 biggest Russian SWIFT users. and they perform both registrar and depository functions. Uzbekistan has implemented a similar system. Infrastructure in both countries is rather good now, but unfortunately the Is there any news on your systems? markets only begin their development. This is the opposite We have started a project unofficially called “FundSettleRus”, of Ukraine, where there is a market in place, but the infra- which is similar to the well known Euroclear system, but structure has a lot of problems. meant for operations with the Russian funds. We already have some contracts with a number of funds and asset management companies for this project. In the meantime we have Do you regard NDC as your competitor or partner in also received the approval from the FFMS. Russian asset the development of the market infrastructure? managers will take advantage of a fast access of customers From my point of view we are more partners than competi- of DCC clients to their assets. Of course DCC clients and tors. We have a very good understanding of each other and their customers will benefit from this solution, too. the working relationships between our teams have clearly improved. To some extent we certainly compete with each other, which probably is not so bad for the market. It forces us to constantly innovate.

Issue 112, August 2010 7 Interviews:On the way to a single Central Securities Depository in Russia

Interview with Alexander Artyukhin, Director of NDC has been selected as the numbering agency for Development and Client Relations, NDC Russian securities. What is the status in this project? We are the only numbering agency in Russia and substitute agency for CIS. NDC is obliged to assign ISIN numbers and CFI numbers for securities from these countries. We are proud of this role and are now in the process of developing this service. We have already presented an updated website, where local and foreign players can find detailed information on the securities they are looking for.

In addition, NDC is interested in offering to the market a com- pletely new and valuable product. We have also developed a corporate action information service to the market. We already had some focus groups with market participants, with UniCredit being one of them, to identify their views and needs.

Managing corporate action information is a big challenge in Russia. As a system, we have several local agencies, licensed Alexander Artyukhin by FFMS for disclosing issuer’s information, which are con- Director of Development sidered official sources for this purpose. Thus, we do not and Client Relations, NDC have one exclusive source of official corporate information, where a market player may find all required data in a friendly Alexander, congratulations to your recent appoint- format and which would count as legally binding. ment as Director of Development and Client Relations of the NDC! In this function you will probably have to Custodians also regard the provision of corporate comment on the position of the NDC as regards the action information as one of their roles. How does that upcoming reforms to the Russian market environment fit together? pretty often. Which developments have been achieved Custodians are not the primary source of this kind of informa- so far? tion. They always have to approach NDC, DCC, registrars or NDC is the biggest Russian settlement depository, covering the issuers directly, like many market participants do. It’s the above 70% of the local market in terms of assets held in cus- root of the problem, an indicator of the demand, since we all tody. We are settling close to 100% of fixed income, meaning need a source of verified data. In my view, the strategic chal- that de facto we are already the central depository for debt lenge is to oblige issuers to forward their information directly securities. Of course it is still not legalized, but we are doing into CSD. If those amendments could be implemented in the our best to become the central depository in Russia. We are law to form a future single CSD or some other corporate act, already developing products to be in line with CSDs in other this would be a big step forward to make this information countries. For example a securities lending product, which, available at one place and at the right time. In any case, we I think, is a must for every CSD, just as collateral manage- are ready to introduce this service to the market later this ment products, etc. year or the beginning of next, even without any respective legislation changes. When are the decisions regarding a single CSD to be expected? How will this new information tool ease the life of The concept of a future single CSD recently presented by custodians? FFMS of Russia is a big step forward. But we have to under- At the first stage, it will be presented as a web-interface in stand that it will not be enough to just name one of the exist- a pure view mode. Soon after that, it will be presented in a ing depositories. You should prepare yourself to be a real convenient layout, probably in a SWIFT format or download- CSD. We expect the Federal Financial Markets Service to able files. These can then be transferred to the clients of the present details of the future law, which can then be passed custodians. We are currently investigating among our clients in the State Duma probably in autumn this year. which format will be most useful for them.

How will the conditions for securities lending be devel- At the moment custodians are obliged to employ a number oped? of people only to search for corporate action information. Nowadays securities lending does not exist in Russia. In With the only one source of information in the future, there particular, we do not have a securities lending product as it is will be no need for them any more. understood by foreign market participants. Some may claim that we do have a repo market, which one can consider a lending tool, but it is obviously not the same. That is why we are preparing this product and planning to go live next year.

Issue 112, August 2010 8 Interviews:On the way to a single Central Securities Depository in Russia

What is your view on the future of the registrars? To which extent do the fiercer market regulations in The FSFM concept is now based on the CREST model, Europe affect Russia? a settlement model from the UK, which has been chosen Personally I think that Russia can benefit from the restric- because it is relatively common with our current structure. tions which are being implemented in Europe. The tighter the It does have registrars, a CSD, custodians, global custo- regulation in Europe, the more investors might actually start dians and almost all other existing market participants. looking at Russia. It may eventually turn out to be easier for One can say that the market does not need the registrars, them to be active in our market. I expect this to increase our but they are an integral part of it. Whereas there are just competitiveness and to ultimately contribute to Moscow’s three or five registrars in the UK, we count about 50 in aim to become an international financial centre. Russia. We certainly foresee registrars’ consolidation in the future though. What makes you so confident that more international investors will come and find the market conditions suitable? Will the role of the registrars change? The concept 2020 – to become an International Financial Under the current CSD concept the register of sharehold- Centre within 10 years – envisages a significant improvement ers will be divided into two parts: the untradeable and the of the framework. Investors will definitely come to Russia. tradable part. The registrars are expected to remain with the non-tradable part. They will most probably be responsible for From a risk perspective and the legal point of view, we still need corporate actions and the ultimate confirmation of entitlement to become more attractive, e.g. foreign trusts are not recognized of shareholdings. as legal entities here, which prevents them from buying certain securities – this is a serious problem. If we only managed to All this would mean that the registrars would continue to play achieve part of the programme suggested in the concept 2020, an important role for the market. Nevertheless, it is obvious it would already be a big step forward and would make Russia that we need to have just one place of settlement confirmation. much more attractive for foreign investors as it is now.

Veronika Rief spoke with Boris Cherkasskiy and Alexander Artyukhin

Issue 112, August 2010 9 Dear Clients

Dear Clients

Attila Szalay-Berzeviczy Yavor Dojdevski Global Head of Global Head of GSS Bulgaria Securities Services

I am very pleased to announce the appointment of Yavor Dojdevski as Head of GSS Bulgaria.

Yavor has 14 years experience in the banking industry and over 6 years specifically in custody services. He started his career at Bulbank in 1996. In 2001 he moved to ING Bank Sofia where he started as Relationship Manager in Corporate and Investment Banking and then changed to Securities Services in 2004. His last appointment was Senior Relation- ship Manager Securities Services and Financial Institutions. Yavor focused on relationship management and development of securities business, as well as correspondent banking. Throughout the years he followed closely local market developments and gained significant knowledge and experience in promoting securities business in the Bulgarian market.

Yavor holds a degree in International Economic Relations and a second degree in Accountancy and Control from the leading university of economics in Sofia.

Please join me in congratulating Yavor and wishing him good luck in his new position.

Best regards,

Attila Szalay-Berzeviczy Managing Director Global Head of Global Securities Services

Issue 112, August 2010 10

Austria

Bank Austria: Industry will continue to stabilize over Market Capitalisation EUR 71.4bn the summer YTD Dev. of Market Capitalisation -3.7% Austria’s industrial sector will continue to grow in summer at the same pace it started at in April,” said Chief Economist of Number of SE Transactions p.m. n.a. Bank Austria, Stefan Bruckbauer. By the end of the summer, YTD Dev. of SE Transactions n.a. it could climb back up to around 90% of its pre-crisis level. SE Turnover (Vienna SE) EUR 4.0bn The indicators have been pointing to growth for the past Monthly Index Performance (ATX/VSE) -5.9% half-year, incoming orders have risen again in June, and are GDP per Capita (2010 in EUR) 33,737 also at a very high level, according to Bruckbauer.

GDP Real 2010 (Change against prev. year in %) 1.3 Source: Wiener Borse 3-Month Money Market Rate (current in %) 0.77 Impact on investors Inflation in 2010 (yearly average in %) 1.8 For information purposes only. Upcoming Holidays none

Source: Bank Austria, National Statistics Index-Launch CECE and CEETX Fundamental The CECE Fundamental and the CEETX Fundamental are Actual 38 Day moving average 200 Day moving average weighted according to certain fundamental ratios and made 3000 up of the companies in the CECE and the CEETX (CEESEG Traded Index). 2750 The weighting of the companies in the indices is based on 2500 a factor computed by the Vienna Stock Exchange taking into account three fundamental ratios: Return on Assets, 2250 Gross Dividend Yield and Price-to-Book Ratio. The indices 2000 are calculated and disseminated on a real-time basis in EUR and USD. 1750 Jul Jul Apr Okt Jan Jun Mai Mrz Feb Aug Sep Nov Dez They are designed as tradable indices and can be used as underlying for structured products and standardized deriva- Source: Thomson Datastream tives (futures & options).The CECE Fundamental in EUR started on 2 January 2009 at 1,301.54 points and in USD at 1,809.48 points. The starting value of the CEETX Funda- mental in EUR and USD was defined at 1,000 points as of 2 January 2009.

www.indices.cc

Source: Wiener Borse

Impact on investors For information purposes only.

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

Issue 112, August 2010 11 Belarus

Belarus

UniCredit Bank Moscow starts operations in the Market Capitalisation USD 12.0bn New Market – Republic of Belarus YTD Dev. of Market Capitalisation n.a. In June 2010 ZAO UniCredit Bank starts operations in the securities market of the Republic of Belarus. Number of SE Transactions p.m. (BCSE) 2,023 YTD Dev. of SE Transactions 32.7% ZAO UniCredit Bank Russia has received permission from the SE Turnover (BCSE) BYR 1.8bn Ministry of Finance of the Republic of Belarus and opened a Monthly Index Performance (BCSE) -1.8% nominee account with the Republican unitary entity “Republi- GDP per Capita (2010 in EUR) 286 can Central Securities Depository” of the Republic of Belarus (RCSD). GDP Real 2010 (Change against prev. year in %) 11.13 3-Month Money Market Rate (current in %) n.a. The depository system of the Republic of Belarus includes Inflation in 2010 (yearly average in %) 0.2 2 levels: Republican Central Securities Depository and BYR/EUR 3,869.96 licensed market participants which enter into correspondent Upcoming Holidays none relations with RCSD. RCSD is an unitary entity under super vision of the Ministry of Finance. It is a member of the Asso- ciation of Eurasian Central Securities Depositories (AECSD). Source: Bank Austria, National Statistics RCSD history: ■■Founded in 1996 as Central depository for corporate securities;

■■Unitary entity since 1998;

■■Central depository for all issued securities since 01 Janu- ary 2008;

■■Central depository for all non-issued securities (non-doc- umentary mortgage) since 01 July 2009.

Current capitalization of the Belarusian market is approximately USD 12 bn, the number of securities held with RCSD is more than 4000.

Regulatory bodies: ■■Securities Department of the Ministry of Finance of the Republic of Belarus;

■■National Bank of the Republic of Belarus.

Legal framework: ■■Law of the Republic of Belarus dated 09 July 1999 “On depository activities and the central securities depository in the Republic of Belarus”;

■■Provision of the Ministry of Finance of the Republic of Belarus № 110 dated 04 September 2009 “On some ques- tions of the correspondent relations of Central Securities Depository of Republic of Belarus”.

Legal requirements: The Belarusian securities could be credited to the nominee account of non-Belorussian depository only upon approval of the Securities Department of the Ministry of Finance of the Republic of Belarus.

Issue 112, August 2010 12 Belarus

Securities qualification: RCSD is acting as numbering agency in the Republic of Belarus and is responsible for assigning ISIN and CFI codes for Belarusian securities.

Securities on the centralized holding with RCSD: ■■3854 issues of shares – Eligible for the nominee account of UniCredit Bank

■■100 bond issues of municipal loans- Eligible for the nominee account of UniCredit Bank

■■246 bond issues (currency - Belarusian rubles, U.S. dol- lars, Euro) - Eligible for the nominee account of UniCredit Bank

■■58 issues of government securities and securities of the National Bank;

■■10 issues of stock exchange bonds.

Restrictions for non-residents: There are no such restrictions specified in regulatory documents.

ZAO UniCredit Bank will provide the following services on the Belarusian market:

■■Settlement of OTC trades on FOP basis;

■■Safekeeping of Belarusian securities;

■■Corporate actions;

■■Market information support.

ZAO UniCredit Bank is planning to extend the range of services upon development.

Written and edited by: Alexander Nazarov Director, Global Securities Services Tel. +7 495 258-7349 · [email protected]

Issue 112, August 2010 13

Bosnia and Herzegovina

The supervisory authorities of the financial sector in Market Capitalisation (Sarajevo SE) BAM 7.3bn joint control of events in the market YTD Dev. of Market Capitalisation 2.3% The Committee for the Coordination of Supervision of the Financial Sector in the Republic of Srpska, on its second Number of SE Transactions p.m. 1,293 meeting held on 14 July 2010, agreed upon the text of the YTD Dev. of SE Transactions -44.7% Agreement on Cooperation of the Supervisory Authorities of SE Turnover (SASE) BAM 7.1mn the Financial Sector in the Republic of Srpska, signed by the Monthly Index Performance (SAX-10/SASE) -0.4% Securities Commission of RS, the Banking Agency of RS and Market Capitalisation (Banja Luka SE) BAM 3.5bn Insurance Agency of RS. YTD Dev. of Market Capitalisation -7.6% By signing this agreement the preconditions are created Number of SE Transactions p.m. 1,574 for effective cooperation between supervisory authorities, YTD Dev. of SE Transactions -52.5% providing better communication and coordination, which SE Turnover (BLSE) BAM 3.5mn creates the possibility of greater insight and control of finan- Monthly Index Performance (BIRS/BLSE) -7.8% cial transactions and events in the market. The agreement GDP per Capita (2010 in EUR) 3,239 serves the purpose of preserving the stability of the financial sector, its further development, but also better protection of GDP Real 2010 (Change against prev. year in %) 0.5 the rights of users of financial services. 3-Month Money Market Rate (current in %) n.a. Inflation in 2010 (yearly average in %) 2.3 Cooperation and joint action of the supervisory authorities will BAM/EUR 1.96 be taken by conducting the following activities: the organi- Upcoming Holidays none zation of joint control in the field of banking, insurance and capital markets, measures and actions to protect the rights of consumers of financial services, timely identification of Source: Bank Austria, National Statistics problems and taking measures to remedy weaknesses in the functioning of the financial sector, exchange information 1250 Actual 38 Day moving average 200 Day moving average and access to needed information, as well as the harmoniza- 1200 tion of regulations in the field of financial intermediation with 1150 international best practices and standards and regulations of

1100 the European Union, a published statement said.

1050 Impact on investors 1000 For information purposes only. 950

900 Regular revisions by SASE and BLSE conducted in 850 July Jul Jul Apr Okt Mai Jan Jun Mrz Feb Aug Sep Nov Dez The Sarajevo Stock Exchange conducted the regular revi-

Source: Bloomberg sion of the Primary Free Market and the SASX-30 index, which tracks the price movements of issuers that are listed on this sub segment of the free market. In accordance with the reported liquidity of these issuers, the Stock Exchange Management Board has determined 30 issuers which are included in this sub segment and the SASX-30 respectively, effective as of 12 July 2010.

The Banja Luka Stock Exchange Commission for the Revision of BIRS conducted the seventh unscheduled revision of the BIRS on 16 July 2010 in line with Methodology for Estab- lishment, Calculating and Revision of the BIRS. The seventh revision of the BIRS has been done due to the delisting of Nova Banka ad Banja Luka shares (symbol: NOVB-R-A),

Issue 112, August 2010 14 Bosnia and Herzegovina

which had been previously included in the BIRS composition. In its decision on the fourteenth issue of shares through the stock split, Nova Banka ad Banja Luka has divided ordinary shares NOVB-R-A with nominal value of BAM 1000 into ordinary shares NOVB-R-E with nominal value of BAM 1. In the seventh extraordinary revision the composition of BIRS was changed in such a way that delisted NOVB-R-A shares were replaced with NOVB-R-E shares.

Impact on investors For information purposes only.

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

Issue 112, August 2010 15

Bulgaria

A Step Forward to Enhancing the Activity of the Market Capitalisation BGN 10.3bn Financial Regulator YTD Dev. of Market Capitalisation -11.5% The Parliament completed the appointment of new members of the Financial Supervision Commission (FSC). The ruling Number of SE Transactions p.m. n.a. party GERB made the changes to the financial regulator after YTD Dev. of SE Transactions n.a. severe criticism of the activities of the former FSC members SE Turnover (Bulgarian Stock Exchange) BGN 171.1mn who were elected in May 2009, just before the Parliament Monthly Index Performance (SOFIX) -17.1% dissolved for last year’s general elections. GDP per Capita (2010 in EUR) 4,532 The new Commission is comprised of: GDP Real 2010 (Change against prev. year in %) -1.0 3-Month Money Market Rate (current in %) 4.00 ■■Mr. Mavrodiev, Chairperson, who took office at 18 June Inflation in 2010 (yearly average in %) 1.7 2010 with a 6-year mandate and of the members who EUR/BGN 1.96 were voted into office as of 15 July 2010: Upcoming Holidays none ■■Ms. Rankova, Deputy Chairperson responsible for the Investment Supervision Division with a 5-year mandate, Source: Bank Austria, National Statistics ■■Mr. Dzhalazov, Deputy Chairperson responsible for the Actual 38 Day moving average 200 Day moving average Social Insurance Division with a 4-year mandate, 550 ■■Mr. Bogoev, Deputy Chairperson responsible for the Insur- 500 ance Supervision Division with a 3-year mandate,

450 ■■Ms. Gineva, Member responsible for analysis and risk

400 assessment of financial markets, enhancement of supervisory practices and protection of the interests of investors 350 and those who are insured, also with a 3-year mandate.

300 The appointments follow the amendments to the Law on the Jul Jul Apr Okt Jan Mai Jun Mrz Feb Aug Sep Nov Dez FSC adopted on 26 May 2010, which include but are not limited to changes in: Source: Thomson Datastream ■■the structure and functions of the FSC,

■■the establishment and responsibilities of the Financial Stability Council,

■■the co-operation between regulatory bodies,

■■the protection of consumers of financial services.

The number of FSC members is reduced from 7 to 5 compris- ing of a chairperson, 3 deputy chairpersons and a member, each with a 6-year mandate, except for some of the currently elected members. The changes to the structure of the FSC correspond to the changes to its functions. A specific member of the Commission now has responsibility for the analysis and risk assessment of financial markets and for consumer protection in the field of financial services. The Commission was also designated as the competent authority according to the EU Regulation No. 1060/2009 on credit rating agencies, thus, taking supervisory responsibilities over credit rating agencies in Bulgaria.

Issue 112, August 2010 16 Bulgaria

The amended law establishes a Financial Stability Council, Euromoney Recognizes UniCredit Bulbank as Best consisting of the Minister of Finance, the Chairperson of the Bank in Bulgaria FSC, and the Governor of the Bulgarian National Bank. The For the fourth year in a row the leading international magazine tasks of the Council include: Euromoney awarded UniCredit Bulbank the Best Bank in Bulgaria. The announcement was made at a ceremony held ■■assessment of the national financial system and the finan- in London and the prize itself will be traditionally presented cial markets, exchange information, at the Annual Conference of Euromoney taking place in Bel- grade in October this year. ■■monitoring and analysis of systemic risks and measures to react to threats to the stability of the national financial UniCredit Bulbank receives the Euromoney award for the system or to a financial crisis, Best Bank in Bulgaria each year since 2007 when the merger of the three banks (UniCredit Bulbank, HVB Biochim and ■■ coordinated actions within the competencies of the Coun- Hebros) into UniCredit Group took place. „Receiving the cil members in case of imminent threat or crisis in the award Best Bank in Bulgaria for the fourth year in a row is national financial system and markets, proof for the sustainable development of the bank over the years”, said Levon Hampartzoumian, Chief Executive Officer ■■discussions on enhancement of the practical application of UniCredit Bulbank. of financial regulations and new regulations, support improved supervision over the participants in financial mar- UniCredit Bulbank ended 2009 as the indisputable leader kets. in the market in terms of assets (BGN 11.5 bn), attracted deposits (BGN 6.42 bn), provided loans to customers The Council is chaired by the Minster of Finance, it con- (BGN 7.37 bn) and equity (BGN 1.63 bn). The bank is also venes at least four times a year and its decisions are taken the biggest provider of custody services in the local market. unanimously. Other recently received awards of excellence include: The changes to the law on the FSC provide for increased co-operation between the Commission and the Central Bank, ■■Best Bank in Bulgaria by the international magazine Global the State Agency for National Security and other institutions Finance, in executing supervisory duties. ■■Bank of the Year in the 13th edition of the contest, organ- Special emphasis is put on improving consumer protection. ized by the Bank of the Year Association in Bulgaria, Among the specific measures prescribed by the law is that the FSC must identify the beneficial owners of the entities it ■■The 2010 award to UniCredit Bulbank by the Bulgarian supervises. In this regard the local investment intermediar- Business Leaders Forum for the bank’s corporate social ies, the investment management and insurance companies, responsibility. among others, are required to disclose to the Commission the beneficial owners of 5 and over 5% of the voting rights or of Impact on investors the capital of their companies within 3 months of enactment For information purposes only. of the amended law.

Impact on investors Positive impact with expected enhancement in the work of the FSC, and more transparency in the market.

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

Issue 112, August 2010 17

Croatia

Croatia opens final three, closes two chapters Market Capitalisation HRK 167.1bn Croatia opened the final three chapters in its EU entry talks, YTD Dev. of Market Capitalisation -2.7% closed another two, and thus neared the completion of the membership negotiations and the signing of the accession Number of SE Transactions p.m. 17,190 treaty, expected in early 2011.Croatia opened the chap- YTD Dev. of SE Transactions 41.8% ters Competition Policy, Judiciary and Fundamental Rights, SE Turnover (Zagreb SE) HRK 883.1mn and Foreign Security and Defence Policy, while it closed Monthly Index Performance (Crobex/ZSE) -6.6% Public Procurement and Taxation. Currently, Croatia has GDP per Capita (2010 in EUR) 10,306 all 33 negotiation chapters opened and 20 chapters have GDP Real 2010 (Change against prev. year in %) -1.5 already been closed. EU Enlargement Commissioner, Stefan Fuele, said Croatia should sign the EU accession agreement 3-Month Money Market Rate (current in %) 2.3 early next year, with specific dates to be set after the progress Inflation in 2010 (yearly average in %) 1.0 report is published in November. EUR/HRK 7.19 Upcoming Holidays 5 August Impact on investors By opening three final chapters and closing two more, Source: Bank Austria, National Statistics Croatia is getting closer to the finalisation of EU entry talks.

Actual 38 Day moving average 200 Day moving average 2400 Atlantic Grupa buys Droga Kolinska Croatia’s Atlantic Grupa and Slovenia’s Istrabenz have signed 2200 an agreement on the sale of Istrabenz’s food and bever- age company Droga Kolinska. According to the agreement,

2000 Atlantic Grupa has thus acquired 100%, worth EUR 382 mn, in the leading company in the Slovenian food sector. Atlantic Grupa was chosen as the best bidder amongst wide range 1800 of investors, and it is expected that the sale process should be finished by the end of the year. 1600 Jul Jul Apr Okt Jan Jun Mai

Mrz Transaction will be financed through the combination of own Feb Aug Sep Nov Dez capital of Atlantic Grupa, stock holders capital and credit Source: Thomson Datastream means of financial institutions such as that of UniCredit Group and Raiffeisen Group. Through the acquisition of Droga Kolin- ska, Atlantic Grupa becomes one of the largest food companies in Southeastern Europe, with revenues exceeding EUR 600 mn, 4300 employees and one of the strongest portfolios wholesale products with leading brands such as Cedevita, Argeta, barcaffe, Grand Kafa, Cocta, Smoki and Multipower, together with principal brands of global leaders – Wrigly, Ferrero, Hipp and Johnson&Johnson, which the company distributes in the region.

Impact on investors After the acquisition is executed Atlantic Grupa d.d. will become one of the largest food companies in South- eastern Europe.

Issue 112, August 2010 18 Croatia

Dalekovod wins deal in Norway worth EUR 20 mn Dalekovod, a leading Croatian transmission equipment man- ufacturer, reported that it has won the job of building the Sima-Samnanger 420 kV power transmission line in Norway. The EUR 20 mn construction project includes construction works, steel polls, and electrical assembly. Dalekovod won the deal at an international tender. The works should begin in spring 2011 and be finished by 01 December 2012. The project is part of a large investment cycle launched by Stat- nett several years ago. Dalekovod is also interested in the tender for building a new 270-km 420 kV power transmission line Orskog-Faldal expected by the end of the year.

Impact on investors For information purposes only.

Institut IGH participates in projects in Israel worth EUR 6 bn Jure Radic, head of Institut IGH d.d., signed a long-term cooperation agreement with Israel’s state roads authority, in Tel Aviv. The first job will be a project designed for the reconstruction of five bridges. In the next four years, the Israeli roads authority is planning to reconstruct the existing roads and build several hundreds of kilometres of new roads, motorways, bridges and tunnels, spending a total of EUR 6 bn.

Impact on investors For information purposes only.

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

Issue 112, August 2010 19

Czech Republic

Central Securities Depository Prague opens for Market Capitalisation CZK 1.3trn business YTD Dev. of Market Capitalisation -1.2% The Central Securities Depository Prague (CSD Prague) suc- cessfully completed the transfer of the records of demateri- Number of SE Transactions p.m. n.a. alized and immobilized securities from the Czech Securities YTD Dev. of SE Transactions n.a. Centre (Strˇedisko cenných papíru˚, SCP). This marked the last SE Turnover (Prague SE) CZK 82.4bn step towards the commencement of the activities of the Cen- Monthly Index Performance (PX) -6.2% tral Depository, which opened for business on 7 July 2010. GDP per Capita (2010 in EUR) 13,661 Preparations for the launch of the Central Securities Deposi- GDP Real 2010 (Change against prev. year in %) 1.8 tory started immediately after a licence was granted on 3-Month Money Market Rate (current in %) 0.85 14 August 2009 by the Czech National Bank to UNIVYC, Inflation in 2010 (yearly average in %) 1.4 a.s., a subsidiary of the Prague Stock Exchange (member of EUR/CZK 25.37 CEE Stock Exchange Group). In December 2009, an agree- 28 September, ment was signed between the Central Securities Depository Upcoming Holidays 28 October and the Ministry of Finance for the transfer of the records of securities maintained in the Czech Securities Centre. This Source: Bank Austria, National Statistics was the beginning of the technical preparations of the trading members and other parties which have become partici- Actual 38 Day moving average 200 Day moving average pants in the Central Depository. “Thanks to the professional 1400 attitude and 100% commitment of all the parties involved,

1300 both on the side of the Central Securities Depository and on the side of the future participants, it was possible to meet 1200 the original deadline for the commencement of activities, i.e. ˇ 1100 mid-2010,” says Helena Cacká, Chief Executive Officer of Centrální depozitárˇ cenných papíru˚, a.s. 1000

900 The Central Depository introduces a series of innovations to the Czech capital market. The main change is that the Central 800 Depository is now capable of maintaining multi-stage record- Jul Jul Apr Okt Jan Mai Jun Mrz Feb Aug Sep Nov Dez ing of investment instruments, thus enabling a standardized trade settlement to be introduced, something which has Source: Thomson Datastream become widespread in other European countries. Account owners will also appreciate the better availability of services associated with the operation of their accounts. These services will now be offered directly by the participants in the Central Securities Depository, through their branch networks.

The company’s core activities include the operation of a central register of dematerialized securities issued in the Czech Republic, operation of a settlement system for the settlement of exchange and OTC transactions involving investment instruments, the lending of securities, administration and management of guarantee instruments, custody and administration of investment instruments maintained in a separate register, assignment of investment instrument identification numbers (ISIN), and, since 2007, the settlement of electricity trades concluded at Power Exchange Central Europe, a.s. (PXE).

Issue 112, August 2010 20 Czech Republic

The Central Depository operates on a participation principle. Kalousek said on Czech Television on Sunday that due to a By means of its participants the Central Depository renders short period of time for drafting the 2011 state budget it is services associated with the registration of securities and possible to make only parametric changes, which applies to settlement of trades. The Central Depository provides issu- savings. System reforms are likely in the budget for 2012, ers services associated with the management of securities he said. Spending cuts next year will not slow markedly eco- issues. nomic growth, according to him. If there were no cuts, the deficit of over CZK 200 bn would cause much more trouble, The Central Depository is also a participant in the Clearstream he said. Banking Luxemburg international depository and is a member of the European Central Securities Depositories Association The Czech National Bank puts economic growth at 1.8% (ECSDA). next year and the EC estimate is 2.4% expansion in 2011.

Source: CSD Source: ctk

Impact on investors Impact on investors The new Central Securities Depository (CDCP) com- For information purposes only. menced its full activities on 7 July 2010 enabling a standardized trade settlement to be introduced. New Czech government The new Czech government was officially sworn in on 13 July FinMin expects 2.5% economic growth in 2011 2010 by President Václav Klaus. The Czech Finance Ministry counts with 2.5% GDP growth next year in drafting the 2011 state budget, deputy finance The coalition government comprises three parties – the con- minister for the budget Bohdan Hejduk said in a discussion servative TOP09 party, the centrist Public Affairs party and programme on the public broadcaster Czech Television on the Civic Democrats. They signed a coalition agreement on Sunday, 4 July 2010. Monday. The new coalition enjoys a comfortable majority of 118 seats among 200 members of the parliament’s Cham- The ministry’s forecast in April estimated an economic growth ber of Deputies. Necas, leader of the Civic Democrats, has of 2.4% next year. pledged to cut the budget gap, from 5.9% of GDP last year to 3% by 2013. The coalition leaders have agreed that the budget deficit will not exceed CZK 140 bn next year, the fiscal gap at 4.6% The centre-right coalition of three parties led by Petr Nečas of GDP at most. The centre-right government (the rightist will follow the reform course pioneered by the government of Civic Democratic Party, the conservative TOP 09 and the Mirek Topolánek in 2006-2009. The government states in its centrist Public Affairs) wants to cut spending by CZK 54 bn coalition treaty that it wants to curb the public deficit, reform and raise revenues by CZK 20 bn. The budget deficit will be pension and health care systems, support entrepreneurship cut below 3% of GDP by 2012 and the government wants and fight corruption and bureaucracy. to have balanced public finances by 2016. Source: ctk Cuts in public spending are better for resolving the struc- Impact on investors tural deficit of the state budget, which exists even when the For information purposes only. economy is at its potential, than higher taxes, according to Hejduk. He, however, admitted that the former will slow economic growth.

Miroslav Kalousek (TOP 09), candidate for finance minister, said on Friday, 2 July that elimination of the structural deficit was the government’s primary goal. According to him, the structural deficit is around CZK 90 bn.

Written and edited by: Dita Šafárˇová Relationship Manager Tel. + 420 221 216 772 · [email protected]

Issue 112, August 2010 21

Hungary

Hungarian Power Exchange Started Operation on 20 Market Capitalisation HUF 17,162.5bn July 2010 YTD Dev. of Market Capitalisation -1.8% HUPX power market trading was launched on 20 July 2010 and related settlement can be completed through the KELER Number of SE Transactions p.m. 361,431 Group, thus financial settlement of power market transac- YTD Dev. of SE Transactions 72.8% tions is offered to Hungarian and international market play- SE Turnover (Budapest SE) HUF 1,024,516mn ers through the Hungarian settlement system. HUPX is the Monthly Index Performance (BUX) -15.4% organized Hungarian power market licensee authorized to GDP per Capita (2010 in EUR) 9,833 operate exchange trading and the trading platform. GDP Real 2010 (Change against prev. year in %) 0.5 Pursuant to the service agreement concluded with EPEX Spot 3-Month Money Market Rate (current in %) 4.60 SE (French subsidiary of the European Energy Exchange, Inflation in 2010 (yearly average in %) 5.0 Leipzig), HUPX provides an organized power market trading EUR/HUF 279,82 platform to make spot transactions. Upcoming Holidays none Transactions concluded in the trading system of HUPX are settled by the European Commodity Clearing AG (ECC), as Source: Bank Austria, National Statistics central counterparty. ECC is in direct relationship with its clearing members only, and KELER Central Counterparty Ltd. Actual 38 Day moving average 200 Day moving average 26000 (KELER CCP) became a clearing member of ECC. Physical performance of the transactions settled by the ECC is by the 23500 European Commodity Clearing Luxembourg S.a.r.l. (ECC

21000 Lux), the subsidiary of ECC.

18500 As a result of the several years of cooperation between HUPX and the KELER Group and by becoming a clearing member 16000 of ECC, KELER provides an opportunity for the participants of 13500 the Hungarian and international power market to settle trade related financial obligations in Euro and/ or Hungarian Forint. 11000 Jul Jul Apr Okt Jan Jun Mai Mrz Feb Aug Sep Nov Dez Settlement services can be used by entities joining the clearing membership system. Market participants can conclude Source: Thomson Datastream non-clearing membership agreement with KELER CCP to benefit from the settlement by the KELER Group.

KELER CCP as a general clearing member is responsible for settling transactions concluded at the HUPX toward ECC, accordingly it assumes financial liability for the performance of transactions concluded by non-clearing members. By KELER CCP becoming a general clearing member, companies with trading rights on the HUPX can become non-clearing members of KELER CCP and can settle their transactions through KELER CCP.

The most spectacular element of power market settlement services offered by the KELER Group is the position registration and financial settlement of daily transactions. Transac- tions made are registered continuously, purchase price is settled daily and ECC fees are also collected through the KELER Group. Transactions between KELER CCP and non-clearing members are technically concluded on the business days of the Hungarian banking system on the cash and securities accounts maintained by KELER.

Issue 112, August 2010 22 Hungary

The financial obligation assumed is the most important part According to the new regulation, banks will have to pay a of the services provided as a result KELER CCP assumes 0.5% tax on their 2009 balance sheet totals above HUF 50 liability to perform purchase price of all transactions made. As bn, while the tax rate on the portion below that level was set the financial obligation undertaken by KELER CCP towards to 0.15%. Insurance companies will be required to pay 6.2% customers is continuous, innocent members continuously after their adjusted income vs. 5.8% mulled previously. An receive amounts due to them in the course of settlement. amendment to the package of legislation that would have made insurance companies established after 1 June 2007 KELER CCP operates a guarantee system to meet the finan- exempt from the tax was annulled at the last minute. Financial cial obligation assumed to promote smooth financial perform- intermediaries were to be levied a 5.6% tax but these will ance. Non-clearing members are obliged to comply with be exempt, according to the approved regulation. Financial the guarantee system requirements continuously. In case businesses will face a 6.5% tax rate, higher than the previous of default on the purchase price or non-compliance with proposal for a 6.0% levy. collateral requirements, the KELER Group starts the default process and facilitates the purchase price settlement with The details of the tax for 2011 and 2012 are to be established the use of the guarantee elements. in a separate legislation at a later stage.

The above service is provided by KELER and KELER CCP Prime Minister Viktor Orban said in the closing debate on the within the KELER Group, with the guarantee system and the package that the government would consider an American- non-clearing membership obligations KELER CCP guaran- type tax for the future, to replace the new tax, which he said tees the security of market settlement, while KELER offers was definitely high and could be called aggressive but was banking services to provide the technical conditions of set- defined in proportion to the problems of Hungary’s economy. tlement. The Hungarian Banking Association commented that the Trading takes place on the HUPX market each day, including banks accepted the bank levy as unavoidable for 2010, but Saturdays and Sundays. There is a T+1 settlement cycle, urged early talks with the government to reduce the tax from settlement is completed from Monday to Friday in line with next year on. By 2012 the tax should be lowered to the the TARGET2 calendar. KELER Group performs towards European level, which is approximately one tenth of the new ECC on TARGET2 days, while non-clearing members are Hungarian levy. The association is of the opinion that the high obliged to make performance towards KELER on Hungarian tax could curb lending activities and thus harm the economy. banking days. The other bills approved by the Hungarian Parliament the same day include a HUF 2 mn monthly salary cap and a spe- Impact on investors cial 98% tax on severance payments for the public sector, a The Hungarian power exchange was launched on 20 July ban on newly issued foreign currency-based mortgages and 2010 providing additional investment opportunities to a reduced corporate tax rate of 10% applicable for income investors. below HUF 500 mn compared to the previous 19%. An amendment to the act on duties eliminates the inheritance Hungarian Parliament Approved Package of and gift tax for family members and the luxury tax on boats, Economic Bills jets and expensive cars. They were abolished as of 1 July. In 2010, the government expects to generate HUF 200 bn In the future fiscal supervisors will oversee the use of public from the tax, which banks, insurance firms and other financial funds at ministries, budgetary institutions and independent companies will have to pay in two equal installments this year government funds and initiate the suspension of payments, on 30 September and 10 December. Although in an earlier if necessary. draft certain financial institutions were to be exempted from payment of the tax, the final draft passed on 22 July 2010 Impact on investors no longer included these exemptions. The Hungarian Parliament approved different measures in order to stabilize the state budget and boost the economy. The parliament approved the bank tax with 301 voting in favor, 12 against it while one deputy abstained. The radical nationalist Jobbik party supported the bills while the green- liberal Politics Can Be Different (LMP) voted against them. The main opposition Socialists did not vote.

Written and edited by Lívia Mészáros Sales & Relationship Manager Tel. +36 1 301 1921 · [email protected]

Issue 112, August 2010 23

Kazakhstan

Trades volume on KASE increased by 19.4% and Market Capitalisation KZT 11,053.9bn made up KZT 13.5 trn (USD 91.5 bn) YTD Dev. of Market Capitalisation 0.0% In the first six months of 2010 the trades volume on Kaza- khstan Stock Exchange (KASE) in all market sectors made Number of SE Transactions p.m. 1,034 up KZT13,472.4 bn (USD 91,530.6 mn) and increased rela- YTD Dev. of SE Transactions 0.0% tive to the similar period of 2009 by 19.4% (15.1% in USD). SE Turnover (KASE) KZT 11.8bn Monthly Index Performance (KASE) 1,397.10 In comparison with the previous six months period (July- GDP per Capita (2010 in EUR) 6,235 December of 2009) the trades volume increased by 17.8% (20.2% in USD). GDP Real 2010 (Change against prev. year in %) 5.0 3-Month Money Market Rate (current in %) 1.70 Impact on investors Inflation in 2010 (yearly average in %) 7.6 For information purposes only. EUR/KZT 187,49 Upcoming Holidays none GS trades volume on KASE increased by 47.1% and

Source: Bank Austria, National Statistics made up KZT7 56.3 bn (USD 5,136.9 mn) In the first six months of 2010 government securities (GS)

Actual 38 Day moving average 200 Day moving average trade volume on Kazakhstan Stock Exchange (KASE)* made 2100 up KZT7 56.3 bn (USD 5,136.9 mn) and increased against the same 2009 period by 47.1% (47.2% in USD). 1900

1700 In comparison with the previous six-month period (July- December 2009) trades volume decreased by 15.4% (13.7% 1500 in USD). 1300

1100 Impact on investors For information purposes only. 900

700 Repo transactions market volume gained 7.8% and Jul Jul Apr Okt Mai Jun Jan Mrz Feb Aug Sep Nov Dez made up KZT6.4 trn (USD 43.4 bn) In the first six months of 2010 the repo transactions market Source: Bloomberg trade volume on Kazakhstan Stock Exchange (KASE) made up KZT 6,391.2 bn (USD 43,430.0 mn) and gained against the similar 2009 period 7.8% (4.1% in USD).

In comparison with the previous six-month period (July- December 2009) trades volume gained 42.7% (45.6% in USD).

Impact on investors Following information shows changes of the business activity in the Kazakhstan market from the beginning of the year 2010.

Written and edited by: Saltanat Adikhanova Relationship Manager Tel. +7 727 258 30 15 · [email protected]

Issue 112, August 2010 24

Kyrgyzstan

In June 2010 the trades volume on three Kyrgystan trading Market Capitalisation n.a. grounds increased by 4.6% and made up KGS 25.72mn YTD Dev. of Market Capitalisation n.a. (USD 0.56 mn) with 81 trades provided. Number of SE Transactions p.m. 81 The trades volume on JSC “Kyrgyz Stock Exchange” made YTD Dev. of SE Transactions 0.0% up KGS 3.33 mn (USD 0.73 mn) with 41 trades provided. SE Turnover (KSE) KGS 25.7mn Monthly Index Performance (KSE) 88.3 Moreover, the trades volume on JSC “Kyrgyzstan Stock Exchange – BTC” made up KGS 22.39 mn (USD 0.49 mn) GDP per Capita (2010 in EUR) 1,457.19 with 40 trades provided. GDP Real 2010 (Change against prev. year in %) 2.3 3-Month Money Market Rate (current in %) n.a. On JSC “Central Asian Stock Exchange” no trades were Inflation in 2010 (yearly average in %) n.a. registered. EUR/KGS 45.87 Upcoming Holidays none Impact on investors Following information shows changes of the business

Source: Bank Austria, National Statistics activity in the Kyrgyzstan market for June 2010.

Written and edited by: Saltanat Adikhanova Relationship Manager Tel. +7 727 258 30 15 · [email protected]

Issue 112, August 2010 25

Poland

NDS implemented SWIFT Message Support System Market Capitalisation PLN 450.2bn The National Depository for Securities has equipped the YTD Dev. of Market Capitalisation 6.5% depository-settlement system “kdpw_stream” with a new functionality which supports the execution of selected trans- Number of SE Transactions p.m. 882,017 action settlement operations by means of SWIFT messages. YTD Dev. of SE Transactions 0.8% The solution is compliant with ISO 15022 and international SE Turnover (WSE) PLN 35.9bn standards applied by the leading investment firms. Monthly Index Performance (WIG20) -6.7% Monthly Index Performance (WIG) -5.1% Communication with the National Depository for Securities by means of SWIFT messages implements the generally GDP per Capita (2010 in EUR) 8,893 accepted standards of communication between financial and GDP Real 2010 (Change against prev. year in %) 2.6 infrastructure institutions applied on the leading European 3-Month Money Market Rate (current in %) 3.62 markets. Inflation in 2010 (yearly average in %) 2.5 EUR/PLN 4.07 By implementing the standard, the National Depository for Securities has joined the group of depository-settlement insti- Upcoming Holidays none tutions which offer world-class services. The implementation has also addressed the needs of the market and its partici- Source: Bank Austria, National Statistics pants. The National Depository for Securities continuously improves the quality of its services and provides cutting-edge Actual 38 Day moving average 200 Day moving average 2700 solutions to the market as part of building its international position and contributing to the development of the regional 2500 financial hub in Warsaw.

2300 Impact on investors

2100 There is no direct impact on investors. The new functionality largely extends the options of communication between 1900 the National Depository for Securities and its members.

1700 Jul Jul WSE one of the leaders of European IPO market in Okt Apr Mai Jan Jun Mrz Feb Nov Dez Aug Sep Q2 2010 Source: Thomson Datastream Based on the newest “IPO Watch Europe” report prepared by PricewaterhouseCoopers, LSE and WSE where European leaders in terms of numbers and total value of IPO in Q2 2010. Two Polish offers, PZU and Tauron Polish Energy, were ranked among the 5 largest European IPOs in Q2 2010.

14 new issuers debuted on the WSE markets in June: 2 on the Main Floor, 2 on Catalyst Market, and 10 on NewCon- nect – the WSE alternative trading system. The most cel- ebrated IPO was that of Tauron Polish Energy, the second largest IPO (after PZU) completed by Polish State Treasury in 2010 – debuted on the exchange on 30 June. The value of the IPO was PLN 4.2bn and around 230 thousand retail shareholders subscribed for the shares.

Issue 112, August 2010 26 Poland

Tauron Polish Energy is an energy company and a leader in the production, distribution and sale of electricity in Poland. The company is the biggest distributor and one of the two biggest sellers of electricity in Poland as well as one of the biggest distributors and sellers of electricity in Central and Eastern Europe.

Impact on investors The leading position of the WSE on the European IPO market may attract foreign investors.

Written and edited by: Marek Cioroch Relationship Manager Tel. +48 22 5245862 · [email protected]

Issue 112, August 2010 27

Romania

Economy Market Capitalisation RON 82.4bn IMF Representative – Jeffrey Franks stated that the 3% YTD Dev. of Market Capitalisation 46.5% economic contraction for 2010 is too pessimistic The IMF is in the process of revising its economic growth Number of SE Transactions p.m. 91,816 forecast, however an economic contraction of 3% this year is YTD Dev. of SE Transactions -22.5% far too pessimistic, Jeffrey Franks, head of the IMF mission to SE Turnover (Bucharest SE) RON 554.2mn Romania, stated on day one of the new round of negotiations Monthly Index Performance (BET/BSE) -3.9% on releasing the fifth tranche of the loan that the Romanian GDP per Capita (2010 in EUR) 5,763 Government contracted from the IMF, the World Bank and GDP Real 2010 (Change against prev. year in %) -0.9 the European Union. The IMF official’s statement comes after most of the local banks and the EBRD announced last 3-Month Money Market Rate (current in %) 7.02 week that they expect the Romanian economy to contract Inflation in 2010 (yearly average in %) 4.7 by 3%. “The EBRD forecast is pessimistic. I am not that EUR/RON 4.24 pessimistic,” Franks said. Upcoming Holidays none According with the IMF representative’s declarations after the

Source: Bank Austria, National Statistics meeting with the Governor of the National Bank of Roma- nia Mugur Isarescu, the main challenge for the international

Actual 38 Day moving average 200 Day moving average financial institution will be to reverse the Romanian economy’s 6200 trend in order for it to come out of recession. Concerning

5700 the structural reforms that the Romanian state conducted in recent months, Franks pointed out that there are sectors in 5200 which “things are moving along very well,” but there are also 4700 sectors in which the reform process has to be speeded up. 4200 “We have to carry on with the pensions’ reform, a reform that was delayed in recent months, but also with the blanket 3700 salary law. 3200

2700 Overall, however, there has been significant progress in recent Jul Jul months,” the IMF official added. Referring to the budget Apr Okt Jun Jan Mai Mrz Feb Aug Sep Nov Dez deficit target set for this year (6.8% of GDP), Franks pointed Source: Thomson Datastream out that it is premature to talk about a possible change. He explained that the IMF will discuss this issue with the Finance Ministry and that an IMF team is already present within the Ministry’s headquarters in order to analyze the data.

Impact on investors 3% economic contraction for 2010 is too pessimistic.

Banking UniCredit Group head Mr. Alessandro Profumo: We are targeting a top 3 position in Romania Last week the CEO of UniCredit Group Alessandro Profumo visited Romania. He met President Traisn Basescu, the Min- istry of Finance Sebastian Vladescu and the Central Bank Governor Mugur Isarescu.

UniCredit group boosted the volume of loans released in Romania by 10% in the first half of this year and wants to become a top-three bank on the Romanian market by 2015, states Alessandro Profumo. “Reaching the top 3 in Roma-

Issue 112, August 2010 28 Romania

nia is a target we can assume around 2015. In the first six for trading for one month on the Sibiu exchange. months we increased lending by 10%, which means a sig- The money from Sibex’s capital increase will be used by the nificant funding volume and I believe this is the best answer exchange operator to boost the capital of Sibex’s deposi- as regards the focus of our medium-term strategy,” Profumo tory above the limit imposed by legislation in force, which is told in an interview for the Financial Newspaper (ZF). Ales- a minimum EUR 5 mn capital. sandro Profumo says that boosting lending was not an easy task, the more so as economic conditions are still difficult. Impact on investors The CEO of UniCredit Group stated: “I’ve paid this visit as Sibiu Monetary and Financial Commodities Exchange will Romanian operations are highly important for us. The conclu- increase its capital in order to support the SIBEX Deposi- sion is that we have a strong bank here and I am even more tory to fulfill the legal requirements. confident than before of the soundness of operations and of the domestic team. (...)”. New closed-end fund – iFund which brings Fund Impact on investors Proprietatea shares to the Stock Exchange soon UniCredit is a strong bank in Romania. A closed-end investment fund was launched by Intercapital Investment Management, Intercapital’s management division. The iFund will invest 50% in Proprietatea Fund shares and Some foreign banks will increase exposure in the other half in financial sector shares. Romania in the upcoming months IMF, EC and World Bank representatives together with the The listing of the Proprietatea Fund is the most awaited event nine representatives of foreign banks present on the Roma- of the last few years on the Romanian capital market, and nian market decided on Thursday that Romania’s foreign those wishing to take advantage of the moment will be able policy strengthening allows for flexibility of the exposure of to do so through iFond. foreign banks in the country. “We may witness a succession of favorable events for Fondul During the Brussels meeting, banks reaffirmed their support Proprietatea 6-9 months from now: Templeton’s officially to their branches in Romania. The commitments will support taking over at the helm of the fund, the distribution of divi- Romania in its attempt to consolidate trust of foreign invest- dends, and perhaps the most awaited event, the Proprietatea ments and aid the country to improve economically. Fund’s Stock Exchange listing, all having a positive impact on the iFund’s shares,” says Adrian Lupsan, Deputy General IMF and EC reveal that foreign banks respected their com- Manager of Intercapital Invest, which holds 99% of the shares mitments to maintain their exposure and supply capital for of the company that manages iFond Financial. their Romanian branches. Also, most banks declared that they will increase their exposure in the upcoming months This is the first IPO on the Stock Exchange this year, with once the economic activity is reinvigorated. such operations being very rare on the Romanian market.

Impact on investors Impact on investors Foreign banks remain committed and continue to sustain Investment opportunity in the Romanian Capital Market, their exposure in Romania. the first IPO on the Stock Exchange in 2010.

Stock Exchanges Romanian state puts up for sale EUR 450 mn-stakes Head of Sibex wants to raise EUR 2.8 mn from sharehold- on Stock Exchange ers for Depository The Romanian Government announced the intention to put a Shareholders of exchange operator Sibex (SBX) approved 15% stake up for sale in each of the state owned companies at the end of last week a share capital increase by Transgaz (TGN) and Transelectrica (TEL). These companies 11.3 mn RON (nearly EUR 2.7 mn) via a cash con- are already listed. In addition the Government intends to tribution. The Sibiu Stock Exchange was founded list through a secondary public offer, a 15% stake in the by Teodor Ancuta, who has run it for over 15 years. gas producer company Romgaz Medias. This is one of the Each shareholder will be able to subscribe a new share per most valuable companies in the portfolio of the Ministry of every 2 shares held, at a price equal to the nominal value, of Economy. 1 RON/share. On the market, the latest transaction involving Sibex shares, which was listed on its own platform at the A commission led by Economy Minister Adriean Videanu is beginning of 2010, was conducted at a price of 1.75 RON/ set to oversee the sale of the three stakes, with the first step share. This values the Sibiu Monetary and Financial Com- being the selection of the brokerage firms that will handle the modities Exchange at around 37.6 mn RON (EUR 8.8 mn). offering. After choosing the brokers, preparing the offerings Sibex shareholders will be able to sell their prefer- could take between four months in the case of Transgaz and ence rights attached to the shares to be issued Transelectrica, and six months in the case of Romgaz, thus as part of the operation, with the rights available the sale is not very likely to occur this year.

Issue 112, August 2010 29 Romania

Romgaz is one of the most profitable companies in Romania. The company could be valued at over EUR 2 bn in view of listing, so the state could get EUR 300 mn from the sale of a 15%-stake. Transgaz and Transelectrica could fetch the state around EUR 134 mn more, considering the two companies’ current capitalizations.

Impact on investors New possible listings in the Romanian Capital Market.

Written and edited by Irina Savastre Head of GSS Tel. +40 21 200 26 · [email protected]

Issue 112, August 2010 30

Russia

Legislation toughening of brokerage business Market Capitalisation RUB 13.7trn From 1 July 2010 capital requirements for companies that YTD Dev. of Market Capitalisation 4.7% execute brokerage and trustee activities increased to 35 mn rubles. From 1 July 2011 this figure should reach 50 mn Number of SE Transactions p.m. (MICEX) 9,831,532 rubles. The Chairman of the Federal Financial Markets Service YTD Dev. of SE Transactions -6.6% (FFMS), Vladimir Milovidov, said that this amendment in legis- SE Turnover (MICEX) RUB 5.1trn lation will reduce the number of those companies, for which Monthly Index Performance (RTS) 0.4% the brokerage activity is not a core business. Mr. Milovidov GDP per Capita (2010 in EUR) 8,244 believes that this kind of market participants should become GDP Real 2010 (Change against prev. year in %) 3.4 clients of other brokerage companies. 3-Month Money Market Rate (current in %) 3.31 According to the Russian National Association of Securities Inflation in 2010 (yearly average in %) 6.2 Market Participants (NAUFOR) after the increase of suffi- EUR/RUB 39.07 ciency of charter capital, 20% of companies planned to stop Upcoming Holidays none their activities, and another 12% – merge with others, or cease operations if it does not happen.

Source: Bank Austria, National Statistics Impact on investors New requirements of charter capital for brokers will 1750 Actual 38 Day moving average 200 Day moving average increase the stability of the market. 1600

1450 FFMS to allow unprofitable companies to be traded 1300 according to the highest standards 1150 Following the Central Bank of Russia, which introduced the 1000 banks moratorium on the removal from the deposit insurance

850 system, FFMS has presented a draft order “On some aspects of exclusion from quotation lists of stock exchanges”. The 700 document allows stock exchanges not to exclude from the Jul Jul Apr Okt Jan Mai Jun Mrz Feb Aug Sep Nov Dez quotation list “A” (first and second levels) the equities and bonds of companies which bore the losses in two of the Source: Thomson Datastream past three years, if the losses were born for the years 2008 and 2009.

The necessity for a moratorium was determined by the financial crisis consequences, as it was explained by the Chairman of FFMS Vladimir Milovidov.

Impact on investors The emergence of an order maintain wide range of securities for investors that have strong legislative obligation to invest in high-quoted securities.

Government to choose between a radical ban for cross share ownership of parent and subsidiary companies and a soft option – mandatory disclosure of such ownership The Deputies of the state Duma have worked out the amendments to the Law “On joint stock companies”, limiting the use of cross-shareholding schemes in the holding company. According to their plan a subsidiary company that own shares

Issue 112, August 2010 31 Russia

in the parent company should be disabled to vote or to Russia to place Eurobonds in rubles in 2010, 2011 receive the dividends. A possession of depositary receipts Russia in the current or next year may enter the international for shares of the parent structure should be prohibited at all: market with Eurobonds denominated in rubles, said Vice- already bought DRs must be sold within six months after the Premier and Finance Minister Alexei Kudrin. law comes into force. Now Russia places Eurobonds denominated in U.S. dol- Ministry of Economic Development (MED) proposed to work lars, the recently 2 tranches were issued for the total value out a soft option of the law amendment in order to avoid mas- of USD 5.5 bn. sive restructuring of corporate management in many companies. MED assumes that adequate information disclosure is The Minister stressed that Russia intends to “promote the enough to protect the rights of the investors. The feedback ruble on world markets.” In his view, the placement of securi- of the Government for both versions is not published yet. ties in the ruble would increase the role of the national currency of Russia. Impact on investors New amendments could clarify legal regulation of cross Impact on investors ownership of parent and subsidiary companies. Further placement of securities in rubles could improve the level of Russian currency on the world market.

Bonds of the CIS countries may soon begin placement on the Russian stock exchanges FFMS amends the issue standards of RDR In the near future the countries of the Commonwealth of Federal Financial Markets Service (FFMS) amends the issue Independent States (CIS) may initiate the sovereign bonds standards and registration of securities prospectuses, regu- placement on the Russian stock exchanges. The Minister lating issues of Russian Depositary Receipts (RDR) for shares of Finance Alexey Kudrin announced that such placement of Russian companies. could be possibly provide countries to reach a new level of harmonization of monetary policies, exchange rate policies, The Order draft “On Amendments to the Standards of Securi- trading of currencies of CIS countries using a direct quotation ties and Registration of Securities Prospectuses” provides of the Russian ruble. a number of refinements to the existing procedure of RDR issue.

Impact on investors Particularly, the document provides an opportunity for ter- Widening of the number and types of securities on the mination of the RDR contract between the local issuer and Russian market. the RDR issuer, if the actual free float value is less than the number of RDR indicated in the Prospectus.

Central Bank completed interest rates reduction In addition to these amendments the Chairman of FFMS cycle plans amendments relating to disclosure of information by Central Bank of Russia considers that there is no necessity local issuers. to continue with interest rate reduction. Since April 2009 the refinancing rate has been reduced 14 times, from 13% to The plans to issue Russian Depository Receipts (RDR) were 7.75%. “The Central Bank feels comfortable with this value”, announced by UC Rusal. It should be the first attempt to – said the first Deputy Director of the Central Bank Alexei issue RDR from the initial adoption of the Law (amendment Ulyukayev. Lending growth has resumed, surpassing 1% in to the Law “On Securities Market”) in 2007. The company has May 2010, which allows loan portfolio growth to reach the published several issues to appeal to the regulator. The main specified level of 10% to 15% for the year results. concern of the potential RDR issuer is taxation, the company requested the clarification from FFMS and the Ministry of Impact on investors Finance if the RDR issue shall not be subject to income tax. The market regulator’s appraisal of stable growth of the lending volumes and economy on the whole. FFMS reported that the question raised by the company shall be taken into consideration while new RDR emission standards are working out.

Impact on investors Legislation improvement in issue standards of RDR and appearance of new instruments on the Russian market.

Issue 112, August 2010 32 Russia

Stock exchange increase insurance fund volume The issuers’ disclosure rules to be amended The chairman of the Board of Directors of the stock exchange FFMS has published the draft of amendments to Provi- Russian Trading System (RTS), Roman Goryunov, declared sion “On issuers’ information disclosure”. According to this that the question of the insurance fund increase has been document, public companies will be obliged to disclose the raised. According to Mr. Goruynov it is determined by the votes’ quantity which is directly or indirectly controlled by one trading volumes growth. During the crisis period volumes of shareholder. FFMS considers that the quantity of controlled opened positions on RTS market changed insignificantly, but votes could be more than the quantity of shares owned by for the last one and a half year it has increased more than the shareholder. Along with this amendment FFMS reported thrice, from RUB 70 bn in the beginning of 2009 to 215 bn that the government is working out the law project to specify in June 2010. more precisely the concept of “affiliated parties” in order to force the issuers to disclose the quantity of votes controlled Market participants consider that the stock exchange by the “affiliated parties” as well. plans to increase insurance fund volume from RUB 8 mn to RUB 10 mn for small companies and up to RUB 20 mn for Impact on investors big companies. Selection criterion is expected to be based Increase of the ownership structure transparency. on the opened positions volume of the broker, but the decision is not final. FFMS drafted the Law on responsibility of the Insurance fund has not been increased for some time because company management of liquidity problems of companies and stock exchange tem- FFMS has forwarded to the Government the Law draft “On porarily went to meet wishes of brokers. responsibility of management bodies’ members of companies”. The draft contains the clarification related to the The problem of the growth of the insurance fund volume execution of management function, the consequences of could be finally solved and it is already the second strength maladministration and potential punishment. According to the test for brokers together with new FFMS requirement for draft the management shall be fully responsible for the malad- brokers’ own capital adequacy. ministration and reimburse financial losses which occurred due to the management’s unfair actions to the owner of the Impact on investors company. The draft contains also the list of cases when Toughening of terms on the RTS market could lead to management could be called to the account for and also competitive advantage of MICEX stock exchange. the list of the parties which could bring an action against the management of the companies.

FFMS announced the tender for suspicious In particular the management team should be responsible transactions detection model for incorrect corporate actions execution i.e. priority issues, FFMS announced the tender winner for suspicious transac- tenders and dividend payments, which can lead to the com- tions detection model on the Russian stock market. The pany’s losses. purpose of scientific work is the creation of the concept of constructing a model for effective detection of suspicious The Draft also contains the limitation for some persons cat- transactions on the Russian stock market taking into consid- egories to be appointed to the management position, such eration the international experience of this question. “Market limitation is applicable for the person under disqualification manipulation violated the principles of free trade, distorts proceed, administrative proceed etc. market information, and destroys the pricing mechanism, eliminates the possibility of making qualified decision by Impact on investors investors, thus causing damage to all other participants of Implementation of sophisticated corporate governance the stock market”, FFMS reported. legislation.

Impact on investors The model of suspicious transactions detection should contribute to the International Financial Center-creation in Russia.

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

Issue 112, August 2010 33

Serbia

Serbian Central Bank performs another successful Market Capitalisation RSD 853.5bn stress-test YTD Dev. of Market Capitalisation -2.4% The National Bank of Serbia has announced that the recently conducted stress-test in Serbian banking sector, with taking Number of SE Transactions p.m. 4,870 into consideration 31 March 2010-data, resulted in a capital YTD Dev. of SE Transactions 39.7% adequacy ratio at 21.5%, safely above the determined 12% SE Turnover (Belgrade SE) RSD 1.4bn minimum. The most recent stress-test showed more than Monthly Index Performance (Belex 15) -4.5% the satisfactory capitalization of Serbian banks. GDP per Capita (2010 in EUR) 4,036 Even if the downside macroeconomic scenario, with the GDP Real 2010 (Change against prev. year in %) 0.0 worst macroeconomic forecasts for this and next year 2011 3-Month Money Market Rate (current in %) 9.90 was to develop, the Serbian banking sector would be able Inflation in 2010 (yearly average in %) 5.1 to absorb all projected losses based on existing capital and EUR/RSD 103.92 reserves. In such case, the capital adequacy ratio would Upcoming Holidays none decline to 16.8% by December 2011, still above the determined 12% minimum.

Source: Bank Austria, National Statistics Impact on investors 900 Actual 38 Day moving average 200 Day moving average Serbian Central Bank and entire banking sector again

850 demonstrate safety and commitment to stable steering through crisis times, in line with the on-going stand-by deal 800 with the IMF. 750

700 Changes to the Law on National Bank of Serbia 650 adopted 600 Serbian parliament adopted changes to the Law on National 550 Bank of Serbia, effective as of 1 July, 2010.

500 The adopted changes prescribe that the National Bank of Jul Jul Apr Okt Jun Jan Mai Mrz Feb Aug Sep Nov Dez Serbia (the NBS) governor election will be done based on the Source: Bloomberg proposal given by the president of the Republic of Serbia, instead of previous national assembly’s finance committee. Further changes proscribe that the previous Central Bank key body, the monetary policy committee, will be replaced by an executive committee, consisting of governor and vice governors, as well as the extension of governor’s and vice governor’s mandates from a five to a six years period.

The newly appointed NBS executive committee will be in charge of creating monetary and foreign exchange policies, adoption of regulations related to the supervision of the Ser- bian banking sector, issuance and revoking of financial institutions licenses’ and proposes forex regime to the governor’s council, which would set the forex regime on the governor’s consent. The governor’s council will, among other responsibilities, adopt the NBS financial plans.

The new candidate to take the place of the resigning NBS governor, Mr. Radovan Jelasic, is proposed to be the current NBS Council Chairman, Mr. Dejan Soskic.

Issue 112, August 2010 34 Serbia

Impact on investors Serbian parliament adopted changes to the Law on National Bank of Serbia, introducing among other changes, new rules to governor’s election and changes to institutions’ supreme body.

T-Notes scheduled auctions changes The Republic of Serbia’s Ministry of Finance has issued a revised schedule for Q3 2010 T-Notes auctions, downsizing the initially announced volumes due to local currency recent slides, causing the auction participants to refrain from long- term investments.

Changes to auctions of T-notes over one year maturity, available to the non-resident investors, are summarised below:

August 2010: Maturity Issue size ■■3 August 2010 2yr RSD 2.000.000.000 (previously RSD 6 bn) ■■17 August 2010 1.5yr RSD 2.000.000.000 (previously RSD 8 bn) ■■31 August 2010 2yr RSD 2.000.000.000 (previously RSD 8 bn)

September 2010: ■■14 September 2010 1.5yr RSD 2.000.000.000 (previously RSD 8 bn) ■■28 September 2010 2yr RSD 2.000.000.000 (previously RSD 8 bn)

Previous long-term T-Notes auctions available to nonresident investors were issued in the total of RSD 17 bn, with the following results: Date: Maturity: Issue size: Realisation rate ■■4 May 2010 1.5yr RSD 3.000.000.000 100% ■■18 May 2010 1.5yr RSD 3.000.000.000 100% ■■1 June 2010 1.5yr RSD 3.000.000.000 100% ■■15 June 2010 1.5yr RSD 3.000.000.000 52.29% ■■29 June 2010 1.5yr RSD 3.000.000.000 17.49% ■■20 July 2010 1.5yr RSD 2.000.000.000 41.32% Impact on investors Serbian Ministry of Finance issues revised Q3 2010 T-Notes auctions schedule.

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

Issue 112, August 2010 35

Slovak Republic

Bratislava Stock Exchange Trading in June Market Capitalisation EUR 25.6bn In June 2010, the members of the Bratislava Stock Exchange YTD Dev. of Market Capitalisation 7.6% (BSSE) used the electronic trading system in 22 business days. The financial volume in this period exceeded EUR 499.2 mn Number of SE Transactions p.m. 515.0 in 515 concluded transactions. Although it represents an YTD Dev. of SE Transactions 12.9% 18.12% increase in the number of transactions against the SE Turnover (Bratislava SE) EUR 0.5bn previous month, the financial volume fell more than 22.7% Monthly Index Performance (SAX/BSSE) 2.4% in the same comparison. A year-on-year comparison, too, GDP per Capita (2010 in EUR) 12,068 shows a decrease in volume by nearly 24.8%, with a significant GDP Real 2010 (Change against prev. year in %) 3.5 increase in the number of transactions (+74%). Similar to previous months, negotiated deals in June 2010 again dominated 3-Month Money Market Rate (current in %) n.a. over electronic order book (i.e. price-setting) transactions, with Inflation in 2010 (yearly average in %) 1.3 the former accounting for 99.14% of the total trading volume. EUR/SKK n.a. A total of 138 negotiated deals in a volume of EUR 494.96 mn Upcoming Holidays none were concluded, as opposed to 377 electronic order book transactions in a financial volume of EUR 4.27 mn. Source: Bank Austria, National Statistics June 2010 was no exception as far as investor interest is concerned – the focus on debt securities continued. Nev- Actual 38 Day moving average 200 Day moving average 375 ertheless, it was a second consecutive month when the 350 percentage share of volume generated by bond transac-

325 tions in the total trading volume was lower than usual (May: 85.04%, June: 91.75%). A total of 108 bond transactions 300 were concluded in the period under review, in a volume total- 275 ling nearly EUR 458.03 mn. Both the number of transac- 250 tions and achieved financial volume decreased (-13.6% and 225 -16.65%, respectively). Equity securities of local companies 200 were bought and sold in 407 transactions, in a financial 175 volume of EUR 41.21 mn. In comparison with May 2010, Jul Jul Apr Okt Jan Mai Jun Mrz

Feb it represents a 57.37% decline in volume and a 30.87% Aug Sep Nov Dez increase in the number of concluded transactions. A sig- Source: Thomson Datastream nificant increase on a year-on-year basis was recorded in the number of concluded transactions (+190.71%) and in volume (+5,171.52%).

A total of 2,723 transactions, in a financial volume of EUR 3.85 bn, have been cumulatively concluded on the BSSE from the start of the year 2010. It is a 33.26% decline against the same period of the previous year. Transactions concluded by non-residents in June 2010 represented 60.8% of the total trading volume.

On the last trading day of June 2010, the market capitalisation of equity securities recorded a 2.08 % decline on a month-on- previous month basis to EUR 3.3 bn. The market capitalisation of bonds amounted to EUR 22.35 bn, representing a 0.89% increase on a month-on-previous-month basis.

The SAX index ended the month of June 2010 at 213.59 points, representing a 2.36% increase on a month- on-previous-month basis and a 35.8% decline year on year.

Impact on investors BSSE performance in June 2010.

Issue 112, August 2010 36 Slovak Republic

UniCredit Bank the most active player on BSSE in 1st Revision of SAX Index Base Half 2010 A regular revision of base composition of the SAX Index was UniCredit Bank Slovakia was the most active broker on the made on 12 July, 2010 in compliance with the Rules of Con- Bratislava Stock Exchange (BSSE) in the first half of this struction of SAX Index. The revision was aimed at evaluating year when it achieved a turnover of EUR 2.386 bn repre- development of trading of the SAX Index basic components senting 31% of the BSSE turnover in the monitored period. in the first half – year 2010 and setting a base for the next Slovenska Sporitelna was the second most active player on 6 month period. the Bratislava stock exchange with EUR 2.275 bn turnover and 29.55% share on total turnover. The last of three most The revision by the Commission: active traders was ING Bank N.V. a foreign bank branch in ■■ Slovakia, with turnover of EUR 829.5 mn and a 10.78% share Decided to include the companies Best Hotel Prop- in total turnover. erties (SK1120005105) and Tatry mountain resorts (SK1120010287) in the base of SAX Index by accepting Total turnover of BSSE in the half year 2010 reached the value the maximum weight of 20% of each participant in the of 7.7 bn EUR (by 33.26% less than in the same period last SAX Index basket. year). A total of 2,723 of transactions were closed in the said ■■ period, including 2,065 share transactions and 658 bond Set the adjustment coefficients to the equal value. transactions. The turnover of share transactions amounted to 290.16 mn EUR (3.77% of the total turnover), whereas the turnover of bond transactions amounted to 7.41 bn EUR (96.23% of the total turnover).

Impact on investors UniCredit Bank Slovakia retained its position of the most active player on the stock exchange.

SAX Index base before and after revision

before revision after revision Number of Number of Name of Abbreviation of securities in Adjustment Weight securities in Adjustment Weight company company issue coefficient issue coefficient Biotika BSL 983,199 0.206668 8.135% 983 199 0.265225 4.881% OTP Banka OTP 5,455,841 0.206668 12.311% 5 455 841 0.265225 7.387% Slovensko SES Tlmače SES 1,565,345 0.206668 20.015% 1 565 345 0.265225 12.009%

Slovnaft SLN 653,339 0.203224 28.010% 653 339 0.265225 16.806%

VÚB VUB 598,823 0.195727 31.529% 598 823 0.265225 18.917% Tatry mountain resorts SKI - - - 1 113 497 0.265225 20.000% Best Hotel Properties SRA - - - 4 431 718 0.265225 20.000%

Impact on investors New base of SAX Index will come into force on 2 August, 2010.

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

Issue 112, August 2010 37

Slovenia

Unemployment Rate Flat at 10.6% in April over Market Capitalisation EUR 21,020mn March YTD Dev. of Market Capitalisation 7.0% Slovenia’s unemployment rate remained flat in April over March at 10.6%, the Statistics Office said on Wednesday, Number of SE Transactions p.m. 9,065 16 June 2010. There were 99,316 people registered as YTD Dev. of SE Transactions -29.0% unemployed in April, while the number of people in paid SE Turnover (Ljubljana SE) EUR 42.0mn employement rose by 0.3% to 839,250. Monthly Index Performance (SBI 20) -0.7% GDP per Capita (2010 in EUR) 17,515 While unemployment among men remained at 10%, it edged 0.1 percentage points higher among women to 11.3%. GDP Real 2010 (Change against prev. year in %) 0.9 Unemployment dropped under 20% in the Pomurje region 3-Month Money Market Rate (current in %) 0.77 for the first time in four months, reaching 19.4%. Inflation in 2010 (yearly average in %) 2.0 Upcoming Holidays none The number of employees continued to decrease in construction, retail and in the processing industry. However,

Source: Bank Austria, National Statistics more people were hired in health care, social work, public administration and defence.

Actual 38 Day moving average 200 Day moving average 4800 Impact on investors

4600 For information purposes only.

4400

4200 Government Adopts Euro Stability Bill

4000 The government adopted on Thursday, 01 July 2010 a bill on state guarantees for securing financial stability in the euro- 3800 zone, which sets up a legal framework for Slovenia’s partici- 3600 pation in mechanisms of financial aid to eurozone countries 3400 which are not able to secure enough funds on the financial Jul Jul Okt Apr Jan Mai Jun Mrz Feb Aug Sep Nov Dez markets.

Source: Thomson Datastream The eurozone countries will establish a special company based in Luxembourg, which, in the next three years, could secure up to EUR 440 bn in aid to countries which might need it.

Together with the funds from the International Monetary Fund (IMF) and from the EU budget, the overall amount available stands at EUR 700 bn, Finance Minister Franc Krizanic told the press after the government session.

“This is a very high amount of capital”, the minister said, adding that the EU would see such a mechanism for the first time. The public finance crisis in Greece has shown that there is a need for such a mechanism, according to Krizanic.

The company will take out loans and issue debt securities which will be guaranteed by the eurozone member states. The share of guarantees by Slovenia will be capped at slightly more than EUR 2 bn, the minister added.

The European Commission and the IMF will prepare a programme determining the conditions, amount and price of aid for every country which asks for it as part of the mechanism.

Issue 112, August 2010 38 Slovenia

The programme will have to be approved by all countries participating in the aid.

Prime Minister Borut Pahor said he would like the euro to be trusted in. “Stability of this currency is of exceptional importance to us,” he said, adding that it was clear that Greece would not be the only country experiencing structural problems.

“But Slovenia is among those who are already tackling [structural problems] and this is of great importance for our credit rating,” the prime minister concluded.

Impact on investors For information purposes only.

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

Issue 112, August 2010 39

Ukraine

SSSMC of Ukraine imposed mandatory information Market Capitalisation UAH 234.2bn disclosure on publicly listed and traded companies YTD Dev. of Market Capitalisation 13.8% Ukraine’s main securities market regulator State Securities and Stock Market Commission (SSSMC) of Ukraine intro- Number of SE Transactions p.m. 31,823 duced obligatory information disclosure for publicly listed YTD Dev. of SE Transactions 385.2% and traded companies through Electronic System of Com- SE Turnover (PFTS) UAH 3.0bn prehensive Information Disclosure (ESCRIN). Monthly Index Performance (PFTS) 0.7% GDP per Capita (2010 in EUR) 2,504 Ukrainian Vice Prime Minister Sergiy Tigipko and U.S. Ambas- sador to Ukraine John F. Tefft attended the presentation of GDP Real 2010 (Change against prev. year in %) 3.0 the new electronic disclosure system, which started as a pilot 3-Month Money Market Rate (current in %) 7.50 USAID project in cooperation with the SCSSM in 2007. The Inflation in 2010 (yearly average in %) 9.6 transfer of the ESCRIN system from USAID to the SSMSC EUR/UAH 10.03 was finalized at the event. Upcoming Holidays none According to Mr. Tefft, “The launch of ESCRIN is vital to Ukraine’s efforts to attract investment, foreign as well as Source: Bank Austria, National Statistics domestic. Investors need real-time information about a company’s business and financial prospects, and ESCRIN will 7000 Actual 38 Day moving average 200 Day moving average provide it”. 6000 Mr. Tigipko added, that ESCRIN introduction would allow 5000 increasing transparency of foreign and domestic capital investment in the Ukrainian economy. 4000

3000 Describing ESCRIN, member of SSSMC mentioned that the system comprises annual and quarterly information, including 2000 financial reports under Ukrainian accounting standards and IFRS, and specific information. ESCRIN allows companies to 1000 disclose information in electronic tables or in electronic text Jul Jul Apr Okt Jan Jun Mai Mrz Feb Aug Sep Nov Dez form using digital signatures. ESCRIN uses an XML technology, which allows the structuring, selecting and analyzing of Source: Thomson Datastream data and its transfer to other systems.

He also added that ESCRIN was designed to be in line with European disclosure standards and Ukrainian law.

USAID said that currently 27 issuer companies from the banking sphere, industry and energy sector have been registered in the system.

Impact on investors Regulator SSSMC introduced mandatory information disclosure for publicly listed and traded companies.

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

Issue 112, August 2010 40

Your Contacts

Regional responsibility Bosnia and Herzegovina Attila Szalay-Berzeviczy UniCredit Bank d.d. Tel. +35 1 301 1910 Zelenih Beretki 24 [email protected] BA-71000 Sarajevo Bosnia Pawel Muszalski Tel. +43 50505 57315 Lejla Sabljica [email protected] Tel. +387 33 562 777 [email protected] Markus Winkler Tel. +43 50505 58547 Amra Telacevic [email protected] Tel. +387 33 562 816 [email protected] Sven Trahan Tel. +43 50505 57311 [email protected] Bulgaria Beata Szonyi UniCredit Bulbank AD Tel. +36 1 301 1924 6 Vitosha Boulevard, 2nd floor [email protected] BG-1000 Sofia Ewa Stupkiewicz Bulgaria Tel. +43 50505 58511 Yavor Dojdevski [email protected] Tel. +359 2 9320 107 Philipp Aschl [email protected] Tel. +43 50505 58508 Veselin Stefanov [email protected] Tel. + 359 2 93 20 112 [email protected] Austria UniCredit Bank Austria AG Croatia Julius Tandler-Platz 3 Zagrebacka Banka d.d. A-1090 Vienna Savska 60/IV Austria HR-10000 Zagreb Günter Schnaitt Croatia Tel. +43 50505 58501 Valerija Bezak [email protected] Tel. +385 1 6305 430 Thomas Rosmanitz [email protected] Tel. +43 50505 58515 Snjezana Bruncic [email protected] Tel. +385 1 6305 400 Tina Fischer [email protected] Tel. +43 50505 58512 [email protected]

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

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

Issue 112, August 2010 41 Your Contacts

Czech Republic Poland UniCredit Bank Czech Republic a.s. Bank Polska Kasa Opieki SA (short: Bank Pekao) Revolucni 7 Ul. Grzybowska 53/57 CZ-110 05 Prague PL-00-950 Warsaw Czech Republic Poland

Michal Stuchlik Tomasz Grajewski Tel. +420 22121 6770 Tel. +48 22 524 5867 [email protected] [email protected]

Dita Safarova Mariusz Piekos Tel. + 420 221 112 942 Tel. +48 22 524 5852 [email protected] [email protected]

Tomas Vacha Kamil Polak T. + 420 221 216 773 Tel. +48 22 524 5863 [email protected] [email protected]

Marta Boboryk Hungary Tel. +48 22 656 10 92 [email protected] UniCredit Bank Hungary Zrt. Szabadsag ter 5 – 6, 6th floor Krzysztof Pekrul H-1054 Budapest Tel. +48 22 524 5864 Hungary [email protected]

Júlia Romhányi Marek Cioroch Tel. +36 1 301 1923 Tel. +48 22 524 5862 [email protected] [email protected]

Zsanett Lencses Tel. +36 1 301 1920 Romania [email protected] UniCredit Tiriac Bank S.A. Livia Meszaros Ghetarilor Street 23 – 25 Tel. +36 1 301 1921 RO-014106, Bucharest 1 [email protected] Romania

Irina Savastre Kazakhstan Tel. +40 21 200 2670 [email protected] JSC ATF Bank Furmanov Street 100 Viviana Traistaru KZ-050000 Almaty Tel. +40 21 200 2673 Republic of Kazakhstan [email protected]

Vladimir Vassilyev Tel. +7 727 258 3015 (1353) Russia [email protected] ZAO UniCredit Bank Natalya Kolnogorova 9, Prechistenskaya Emb. Tel. +7 727 258 3015 (1232) RU-119034 Moscow [email protected] Russian Federation

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

Issue 112, August 2010 42 Your Contacts

Serbia Ukraine UniCredit Bank Serbia JSC UniCredit Bank LLC Omladinskih Brigada 88 14a, Yaroslaviv Val RS-11070 Belgrade UA-01034 Kyiv Serbia Ukraine

Jasmina Radicevic Bohdana Yefremova Tel. +381 11 3028 611 Tel. +380 44 230 3341 [email protected] [email protected]

Goran Platiša Elizaveta Sotnichenko Tel. +381 11 3028 687 Tel. +380 44 590 1208 [email protected] [email protected]

Ganna Sankina Slovakia Tel.: +380 44 590-1209 [email protected] UniCredit Bank Slovakia A.S. Sancova 1/A Katherine Yevtushenko SK-811 04 Bratislava Tel. +380 44 590-1210 Slovak Republic [email protected]

Matej Letko Tel. +421 2 4950 3701 Websites [email protected] gss.unicreditgroup.eu Zuzana Milanova http://www.unicreditgroup.eu Tel. +421 2 4950 3702 http://www.bankaustria.at [email protected]

Slovenia UniCredit 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 Garibovi ´c Tel. +386 1 5876 453 [email protected]

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

Issue 112, August 2010 43

Disclaimer

The information in this publication is based on carefully selected sources Notwithstanding the above, if this publication relates to securities subject to believed to be reliable but we do not make any representation as to its the Prospectus Directive (2005) it is sent to you on the basis that you are a accuracy or completeness. Any opinions herein reflect our judgement at Qualified Investor for the purposes of the directive or any relevant implementing the date hereof and are subject to change without notice. Any investments legislation of a European Economic Area (“EEA”) Member State which has presented in this report may be unsuitable for the investor depending on implemented the Prospectus Directive and it must not be given to any person his or her specific investment objectives and financial position. Any reports who is not a Qualified Investor. By being in receipt of this publication you under- provided herein are provided for general information purposes only and take that you will only offer or sell the securities described in this publication cannot substitute the obtaining of independent financial advice. Private inves- in circumstances which do not require the production of a prospectus under tors should obtain the advice of their banker/broker about any investments Article 3 of the Prospectus Directive or any relevant implementing legislation concerned prior to making them. Nothing in this publication is intended to of an EEA Member State which has implemented the Prospectus Directive. create contractual obligations on any of the entities composing Corporate & Investment Banking Division of UniCredit Group which is composed of (the Note to US Residents: respective divisions of) UniCredit Bank AG, Munich, UniCredit Bank Austria AG, Vienna, and UniCredit S.p.A., Rome. The information provided herein or contained in any report provided herein is intended solely for institutional clients of Corporate & Investment Banking UniCredit Bank AG is regulated by the German Financial Supervisory Author- Division of UniCredit Group acting through UniCredit Bank AG, New York ity (BaFin), UniCredit Bank Austria AG is regulated by the Austrian Financial Branch and UniCredit Capital Markets, Inc. (together “UniCredit”) in the Market Authority (FMA), the UniCredit CAIB Securtities UK Ltd. is regulated United States, and may not be used or relied upon by any other person for by the Financial Services Authority (FSA) and UniCredit S.p.A. is regulated any purpose. It does not constitute a solicitation to buy or an offer to sell by both the Banca d’Italia and the Commissione Nazionale per le Società e any securities under the Securities Act of 1933, as amended, or under any la Borsa (Consob). other US federal or state securities laws, rules or regulations. Investments in securities discussed herein may be unsuitable for investors, depending Note to UK Residents: on their specific investment objectives, risk tolerance and financial position.

In the United Kingdom, this publication is being communicated on a confi- In jurisdictions where UniCredit is not registered or licensed to trade in securi- dential basis only to clients of Corporate & Investment Banking Division of ties, commodities or other financial products, any transaction may be effected UniCredit Group (acting through UniCredit Bank AG, London Branch (“UCB only in accordance with applicable laws and legislation, which may vary from London”) and/or UniCredit CAIB Securities UK Ltd. who (i) have professional jurisdiction to jurisdiction and may require that a transaction be made in accord- experience in matters relating to investments being investment professionals ance with applicable exemptions from registration or licensing requirements. 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 All information contained herein is based on carefully selected sources believed 49(2) (a) – (d) (“high net worth companies, unincorporated associations etc.”) to be reliable, but UniCredit makes no representations as to its accuracy or of the FPO (or, to the extent that this publication relates to an unregulated completeness. Any opinions contained herein reflect UniCerdit’s judgement collective scheme, to professional investors as defined in Article 14(5) of the as of the original date of publication, without regard to the date on which Financial Services and Markets Act 2000 (Promotion of Collective Investment you may receive such information, and are subject to change without notice. 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 UniCredit may have issued other reports that are inconsistent with, and reach as “Relevant Persons”). This publication is only directed at Relevant Persons different conclusions from, the information presented in any report provided and any investment or investment activity to which this publication relates is herein. Those reports reflect the different assumptions, views and analytical only available to Relevant Persons or will be engaged in only with Relevant methods of the analysts who prepared them. Past performance should not be Persons. Solicitations resulting from this publication will only be responded taken as an indication or guarantee of further performance, and no representa- to if the person concerned is a Relevant Person. Other persons should not tion or warranty, express or implied, is made regarding future performance. rely or act upon this publication or any of its contents. UniCredit and/or any other entity of Corporate & Investment Banking Division The information provided herein (including any report set out herein) does not of UniCredit Group may from time to time, with respect to any securities dis- constitute a solicitation to buy or an offer to sell any securities. The information cussed herein: (i) take a long or short position and buy or sell such securities; in this publication is based on carefully selected sources believed to be reliable (ii) act as investment and/or commercial bankers for issuers of such securities; but we do not make any representation as to its accuracy or completeness. (iii) be represented on the board of such issuers; (iv) engage in “market making” Any opinions herein reflect our judgement at the date hereof and are subject of such securities; and (v) act as a paid consultant or adviser to any issuer. to change without notice. The information contained in any report provided herein may include forward- We and/or any other entity of the Corporate & Investment Banking Division of looking statements within the meaning of US federal securities laws that are UniCredit Group may from time to time with respect to securities mentioned in subject to risks and uncertainties. Factors that could cause a company’s this publication (i) take a long or short position and buy or sell such securities; actual results and financial condition to differ from its expectations include, (ii) act as investment bankers and/or commercial bankers for issuers of such without limitation: Political uncertainty, changes in economic conditions that securities; (iii) be represented on the board of any issuers of such securi- adversely affect the level of demand for the company’s products or services, ties; (iv) engage in “market making” of such securities; (v) have a consulting changes in foreign exchange markets, changes in international and domestic relationship with any issuer. Any investments discussed or recommended financial markets, competitive environments and other factors relating to the in any report provided herein may be unsuitable for investors depending on foregoing. All forward-looking statements contained in this report are qualified their specific investment objectives and financial position. Any information in their entirety by this cautionary statement. provided herein is provided for general information purposes only and cannot substitute the obtaining of independent financial advice. Corporate & Investment Banking Division of UniCredit Group

UCB London is regulated, to a limited extent, by the Financial Services Author- UniCredit Bank AG, Munich; UniCredit Bank Austria AG, Vienna and UniCredit ity for the conduct of business in the UK as well as by BaFIN, Germany. S.p.A., Rome UniCredit CAIB Securities UK Ltd., London, a subsidiary of UniCredit Bank Austria AG, is authorised and regulated by the Financial Services Authority. as of 29 March 2010

Issue 112, August 2010 44

Imprint

Statement pursuant to the Austrian Media Act Publisher and Media Owner Corporate & Investment Banking Global Transaction Banking UniCredit Bank Austria AG Global Securities Services Julius Tandler-Platz 3 A-1090 Vienna Tel. +43 50505 0

Information requirements pursuant to the Austrian E-Commerce Act Registered office and postal address Schottengasse 6 – 8 A-1010 Vienna Swift: BKAUATWW Austrian bank code: 12.000 Registered under no. FN 150714p Companies Register at the Commercial Court Vienna Kind of business Credit institution under section 1 (1) Austrian Banking Act Supervisory authority Austrian Financial Market Supervisory Authority (Finanzmarktaufsicht), departments banking supervision and securities supervision Praterstraße 23 A-1020 Vienna http://www.fma.gv.at Membership Austrian 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 regulations Applicable legal regulations are in particular the Austrian Banking Act (“Bankwesengesetz – BWG”, Federal Law Gazette/BGBl. No. 532/1993, with some amendments), the Austrian Securities Supervision Act (“Wertpapieraufsichtsgesetz – WAG”, Federal Law Gazette/BGBl. No. 753/1996, with some amendments) an the Austrian Savings Banks Act (“Sparkassengesetz”, Federal Law Gazette/BGBl. No. 64/1979, with some amendments). VAT identification number ATU 51507409

Issue 112, August 2010

GSS NEWSLETTER ISSUE 112 August 2010 ﻿ 2

GSS NEWSLETTER ISSUE 112 August 2010 2