August 28, 2008 Russian Stock Market: Tested by Crisis E. Ellinski, MICEX Vice-President

2 The Russian stock market and the world financial crisis S&P upgrades Russia’s rating to investment-grade level Liberalization of the market for Gazprom shares Maximum drop in the Chinese stock market over the last 10 years Bear Stearns announces losses on bonds backed by subprime mortgage US largest banks and investment companies (in particular, Citigroup and Merrill Lynch) announce record-high losses D.Medvedev wins presidential election Bear Stearns: shortage of liquidity, appeal to Federal Reserve for urgent financing For the first time since 2001, Federal Reserve urgently cuts base interest rate Fall of stocks of Fannie Mae and Freddie Mac; US Treasury and Federal Reserve promise them assistance Liquidity crisis in the world market, ECB, Federal Reserve and Asian CBs increase volumes of refinancing

3 Behavior of world stock market indices Indices of developed markets and BRIC countries * DJIA (USA) 16,3%6,4%-14,2% FTSE 100 (Great Britain) 26,1%5,2%-16,2% DAX 30 (Germany) 36,0%36,4%-14,9% Nikkei 225 (Japan) 5,9%-6,2%-8,7% BOVESPA (Brazil) 44,6%72,9%5,5% MICEX Index (Russia) 82,9%20,1%-17,4% SENSEX (India) 49,3%65,2%-34,4% SSEC (China) 138,3%110,1%-43,6% HSI (Hong Kong) 33,8%38,9%-18,3% (29 December 2006 =100%) * — January–July. Changes are calculated based on values of indices in USD.

4 Corporate bonds market Bonds yield in the secondary market, % (at the end of six months) Issuer’s rating 2 nd half of st half of nd half of st half of 2008 BBB- and up6,7 7,47,9 ВВ- — ВВ+8,27,79,39,5 B+ and below9,59,311,6 Without rating10,8 12,012,9

Market for initial placements of stocks and bonds 5 IPO/SPO of Russian companies in 2008 DateCompany Volume, mln USD Type Placement volume/new size of authorized capital, % Listing (secondary trading) TGK-7 (Volzhskaya TGK) 463,7IPO12,9MICEX, RTS 7.04TGK-13471,0IPO33,2MICEX, RTS 16.04Magnit489,5SPO13,8 MICEX, RTS, LSE GlobalTrans Investment Plc 449,4IPO29,0LSE 7.05X5 Retail Group190,9SPO2,1LSE 20.05Cherkizovo Group82,4SPO8,1 MICEX, RTS, LSE 6.06Open Investments491,5SPO11,1RTS 22.07Razgulyai Group295,2SPO24,1MICEX, RTS 12.08Akron2,7SPO0,1LSE

Secondary share market 6

P/E coefficient* for certain countries and regions P/E Number of analyzed stocks China21,71801 USA16,03774 Canada15,8466 Brazil14,1234 Spain14,0229 Italy13,0126 France12,8210 Japan12,53182 Germany11,996 Great Britain11,6150 Indonesia11,3260 South Korea10,71204 India10,31705 Russia10,2264 Australia9,5670 Singapore7,7469 Hong Kong7, * — August 2008, Bloomberg

P/E coefficient* for certain industries of BRIC countries BRICBrazilRussiaIndiaChina All industries15,314,110,210,321,7 Consumer services25,218,822,915,230,6 Medicine, pharmaceutics and biotechnologies18,539,920,210,331,5 Production and distribution of electric power, gas and water 18,48,616,619,722,9 Information technologies16,317,47,212,125,4 Industrial goods15,612,113,910,220,4 Telecommunications15,118,38,213,023,5 Consumer goods13,516,010,89,221,0 Finances13,412,511,49,617,0 Production of semi-processed materials (metals, plastic, building materials, paper, etc.) 12,412,88,68,519,4 Oil and gas production9,713,46,415,810,4 Number of analyzed stocks * — August 2008, Bloomberg

9 Internationalization of the Russian financial market 9 * — January–July

Breakdown of trading in the share market 10 Dealer operationsIndividualsLegal entities Clients who have their funds in trust management Nonresidents

Attraction of long-term foreign investors Clients-nonresidents on MICEX Stock Exchange Countries Number of registered clients- nonresidents Cyprus2 036 Japan379 Ukraine319 Byelorussia259 Kazakhstan92 Great Britain90 Uzbekistan61 British Virgin Islands59 Lithuania58 Armenia57 USA54 Latvia50 Germany46 Moldova39 China28 Israel27 Seychelles22 Azerbaijan17 Vietnam15 India15 Foreign investors in Russian stocks and depositary receipts* (at year-end) Assets under management, billion USD ,11 432,62 206,7 Investments in Russian stocks, billion USD. 22,849,573,4 Share of Russian assets in assets2,1%3,4%3,3% Portfolio turnover: high (>70%)50,3%55,9%57,7% average (33%—70%)39,1%29,5%35,9% low (<33%)10,6%14,6%6,4% * Source: Interfax Business Service (materials from Thomson One for IR) 11

Development of internal investment base Financial potential and volume of investments in stocks of certain categories of investors* Financial potential Volume of investments in stocks billion RUR % Banks Insurance companies Investment funds Pension reserves of non-state pension funds Pension savings * — at the end of

Project MICEX Discovery MICEX Discovery — selection criteria: ● Service in the NDC ● Liquidity ● Transparency ● Expert opinion (interest of the market) * — according to data from quarterly reports for the 1 st quarter of

Improvement of the infrastructure and development of instruments 14 Concentration of liquidity for Russian assets Creation of IPO market Advent of foreign investors IGC Sector Commercial papers Simple clearing International financial hub: Considerable number of foreign investors Ruble is a currency of international settlements Trading in foreign securities Financial and banking services satisfying best world standards MICEX Discovery New instruments (RDRs, foreign securities, infrastructure bonds) T+3 settlements Creation of integrated financial market covering CIS Transition to partial preliminary deposition of funds in the stock market Implementation of CCP in the stock market 2005

NEW YORK  LONDON  PARIS  FRANKFURT   MOSCOW  SYNGAPORE  HONG KONG  TOKYO 15 Moscow: an international financial hub

16 Contacts ● Address: ۰ 13 B.Kislovskiy Per., Moscow, , Russia ● Telephone: ۰ (495) ● Fax: ۰ (495) ● ۰ ● Web site: ۰ Prepared by Information and Analysis Division of MICEX