INVESTOR PRESENTATION

Transcription

1 INVESTOR PRESENTATION April 2012

2 Agenda The Leading Global Exchange in a strong growth environment 1 Leading Russian capital marketplace 3 2 Clear strategy: already on track 9 3 Key growth drivers

3 1 Leading Russian capital marketplace 3 3

4 Russia - unique investment opportunity 9-th Largest Economy in the World 2011 GDP US$1,8 tn. Increase in GDP per capita from US$ 2K in 2001 to US$ 13K in 2011 Top 3 Economy by GDP growth rate among top 10 Largest Economies (4,3% in 2011) High Growth Decreasing Inflation (8,8% in 2010, 6,1% in 2011) Macroeconomic Strength Economy and Strong Domestic Market Strong Internal Demand Pension Funds Savings size of US$90 bln. by 2013 (US$47 bln. US in 2011) Privatization program of US$32 bln. In The lowest Government Debt to GDP among Top 10 Largest Economies at only 7% in 2011 Sochi Olympics in 2014 and World Cup in 2018 Russia has critical mass to have a developed and independent Financial Market Source: Ministry of Economic Development of the Russian Federation, FCSM, Federal State Statistics Service Thomson Reuters 4 4

5 Leading growth markets platform Key CEE exchanges market capitalization (Jan 2012, US$bn) MICEX-RTS WSE Wiener Borse Hellenic Exchange BRICS exchanges by equity market capitalization (Jan 2012, US$bn) 2457 MICEX is the largest stock exchange in CEE/CIS region by capitalization of traded companies significantly ahead of all other players accumulating ~70% of liquidity in CEE and CIS region MICEX-RTS is on par with the biggest exchanges of the rest of BRICS countries by capitalization of traded companies in the past 6 years equity market capitalization has been growing at a CAGR of 33% Comments MICEX-RTS trading turnover in 2011 totaled US$1tn in equities and fixed income turnover* Scalable platform covering all asset classes Shanghai SE BM&FBOVESPA Bombay SE MICEX-RTS Johannesburg SE Source: World Federation of Exchanges (Jan 2012) Source: World Federation of Exchanges (Jan 2012) * MICEX-RTS Data, REPO transactions * REPO transactions not included not included 5 5

6 Tailwinds by Russian economy Share in trading of Russian instruments (2011) 1 Strength OTC Other Vertically integrated exchange in rapidly Equities 49,1% 29,1% 21% FX (RUB/USD) 21,3% 78,7% n/a REPO Market 100% n/a n/a growing economy (real GDP growth 4,2% in 2011) 2 Leading platform for multi-asset trading of Russian instruments: stocks, bonds, repos, FX and derivatives Operates its own clearing, settlement, and depository infrastructure creating efficiencies for pre to post trading services MICEX-RTS is Top 5 by Fixed Income and Top 10 by Cash equities trading turnover in Europe 3 Derivatives 93,4% n/a 6,6% Fixed Income (corporate bonds) 89,2% 10,8% n/a Note: (1) MICEX-RTS research (2) The Economy Ministry of Russia (3) WFE 6

7 MICEX-RTS: Opportunity to cover more asset classes and develop more added-value pre-to-post-trade services Trading Volume Cash Equities FX Repo Fixed Income Derivatives in $670bn $2,944 $3,869bn $380bn $1,938bn Listing/NPI 1 s Trading T+3 Clearing Introduce CCP 2 Introduce CCP 2 Introduce CCP 2 Settlement Central Depository Law has come into force Data dissemination & Information solutions Technology services Launch pre-trade pricing, data and risk analytics solution Enhance online data availability and distribution capabilities Co-location Points of Presence Access Protocol Areas of expertise Key areas for development Note: (1) MICEX -RTS data (2) NPI stands for New Product Introduction (3) CCP stands for Central Counter Party Note: (1) NPI stands for New Product Introduction (2) CCP stands for Central Counter Party 7 7

8 Solid, sound and diversified financial position Resilient financial performance (US$mn) Proven platform for growth Other Revenue 4,1% E 2012E Derivatives Market 7,6% Revenue Net Income Further diversified revenue base Interest Income 39,5% 331 Revenue and net income CAGR of 15% and 16% respectively Robust performance throughout the financial crisis driven by strong growth in the trading volumes across all the markets highly resilient markets and underlying development drivers strong financial discipline and well thought out investments over the last 3 years at both MICEX and RTS positioning MICEX- RTS for further growth opportunities FX 14% Depositary Services 10,8% Spot Market 24% Source: MICEX Data, Revenue split be segment (2011E) Source: MICEX IFRS accounts for , 2011E pro-forma IFRS forecasts for MICEX and RTS combined 8

9 2 Clear strategy: already on track 9 9

10 Strong ambitions for further development Current value 1 and strategic ambition (US$mn) Strategic goals ,600 4,491 4,346 4,044 8,919 7,263 6,058 5, ,583 12,496 19,002 18,279 MICEX-RTS strategic ambition is to be in Top 5 of the world s exchanges by market capitalization Our near-term focus: Become the platform of choice for international traders and investors buying Russian and CIS securities Become the platform of choice for Russian and CIS companies for /SPO, bonds and derivatives instruments Drive and support infrastructure and legislative improvements to attract further trading volumes from foreign and domestic institutional investors Win market share in equities via increased volumes vs. OTC and other venues Increase derivatives product offering and trading opportunities to foster related trading volumes Note: (1) Ranking by market capitalization. Market data (Bloomberg) of 07/02/2012 for all players other than MICEX-RTS (2) MICEX and RTS valuation as of deal parameters 10

11 MICEX-RTS Vision and Mission Vision To become an independent public company, absolute leader in listing, trading and post-trade services for Russian and CIS financial instruments To be the primary center for price discovery, clearing and settlement for Russian and CIS financial instruments Mission To provide convenient, beneficial and reliable infrastructure for product development and running financial intermediaries' business To shape the environment of the Russian financial market To provide and disseminate the best international financial center standards for market participants 11 11

12 MICEX-RTS Strategic Priorities 1 Win s/spos and cash eqities liquidity back in Russia by focusing on development of domestic investor base and by attracting foreign investors 2 Accelerate and diversify the development of derivatives market 3 Develop one clearing system for market participants on all markets 4 Create reliable and high-speed trading platform and high quality IT-services for market participants 5 Develop competitive settlement and depositary product offering 6 Lead the process of Russian financial market regulatory reform 12 12

13 Strategic priorities in different markets Aggressive growth Equities Derivatives Moderate growth Settlement and Depositary Services FX Fixed Income Money Market Client Segments Individual Investors Algo-traders Foreign Investors Domestic Institutional investors Issuers Individual Investors Algo-traders Banks Foreign Investors Institutional investors Banks Algo-traders Foreign Investors Individual Investors Banks Foreign Investors Issuers Banks Foreign Investors Issuers Priorities Equal opportunity platform for investors in Russian and CIS securities (T+3, DVP, Central Counterparty, Central Depositary) Competitive pricing Development of conditions to grow domestic investor base Acquisition of new issuers including privatization source New instruments and services(etfs, foreign shares and DRs, Securities lending) Development of interest rate derivatives, single stock options, currency contracts to increase liquidity Acquisition of new market participants (banks, foreign investors, domestic institutional and public investors) HFT Services (FIX, high-speed connections) Trading Segment Integration Central Depositary Corporate Action & Information Centre Collateral management Availability of Securities lending OTC Settlement Services DMA and accessibility for foreign investors New Instruments: long swaps, G10 currencies, soft currencies Extension of trading hours Development of post-trading services Liquidity stimulating pricing T+3 Diversification of issuers base geography and types of instruments Further development of information disclosure requirements Legislation improvements Liquidity stimulating pricing Access of foreign investors to REPO market New REPO products: centrally cleared cash-driven and securitiesdriven REPO, basket collateralized REPO, Foreign currency REPO 12 13

14 Highly experienced management team focused on driving growth Ruben Aganbegyan President, CEO : President of MICEX-RTS Group : President of MICEX Group : General Director and President of Renaissance Capital s: worked with PWC, Clifford Chance, Credit Suisse First Boston and Troika Dialog Alexander Afanasiev Deputy Chief Executive Officer : MICEX-RTS Group : head of MICEX Currency Committee : Deputy CEO of WestLB Vostok Bank : worked in the Central Bank of Russia, and Imperial Bank Marina Medvedeva Managing Director of Markets Operations : MICEX-RTS Group : MICEX Group : RF Ministry of Finance : worked at the Moscow International Stock Exchange Prior to 1991, Ms. Medvedeva worked in the USSR Ministry of Finance Vahan Vardanian Managing IT Director, CIO : MICEX-RTS Group : worked at Renaissance Capital as Managing Director in charge of IT department Prior to 2004, Mr. Vardanian worked in the USA for Bearing Point (former KPMG Consulting) Roman Goryunov First Deputy Chief Executive Officer, Senior Managing Director : MICEX-RTS Group : CEO of RTS : Head of RTS Derivatives Market : headed the Securities and Financial Instruments Trading Department of the St. Petersburg Stock Exchange Ekaterina Novokreshchenykh Managing Director - Primary Markets : MICEX-RTS Group : Vice-President of MICEX Group President Renaissance Credit Director Troika Dialog Worked with RAO UES and Sovlink Company Vadim Subbotin Chief Financial Officer : MICEX-RTS Group : MICEX Group In , worked in Mir Aeroflota LLC and Russian Standard Bank Since 2001 worked as First Vice President and Executive Director of Transport Clearing House 14

15 3 Key growth drivers 15 15

16 Key Growth Drivers Bring infrastructure and business practices in line with the best international standards Attract foreign investors Key Growth Drivers Develop /SPO market Further develop Russian investor base 16 16

17 What has been done and what is planned Task Done in 2011 Expected in 2012 Bringing business practices in line with international standards Creation of an English-speaking Customer Support Center Regulation of cross trades Creation of new types of instruments (ETF, structured products) Modernization of technologies of access to trading (DMA, co-location) Motivational tariff policy (e.g. volume discounts) Attraction of foreign investors Adoption of the Law on the Central Depository (CD) Launch of trading involving the Central Counterparty Cancellation of the capital gain tax for nonresidents Ensuring compliance of the NSD with requirements for CD Implementation of T+3 and DVP settlements Bringing the clearing infrastructure in line with international standards Creation of the Russian investor base Создание российской инвестиционной базы Development of the /SPO market Changes in the requirements for preservation of non-state pension funds assets as a result of revaluation (abolition of the requirement of the annual breakeven result) Changes in regulations on information disclosure: disclosure in English (with subsequent translation into Russian), financial reporting under IFRS Liberalization of the criteria of investment of the means of the Pension Fund of the Russian Federation, non-state pension funds and insurance companies Expanding the possibilities of investing the means of sovereign funds Measures to motivate individual investors Privatization in Russia Optimization of the issuance procedure Modernization of listing (e.g. new quotation lists) Bringing the standards of information disclosure and corporate governance in line with international standards 17

18 Foreign investor share of trading to substantially increase and drive trading volumes as a result of market infrastructure changes Exchanges investor structure (2011) Foreign investors share in trading turnover (2011) 30% 21% 18% Poland 48% Russia 25% 29% Canada 35% UK 50% 45% 34% Non-residents share in stock market turnover USA 41% Spain 41% China 25% Japan 45% Hong Kong 47% 41% > 40% India 45% 31-40% Brazil 34% South Africa 25% Australia 32% 21-30% 48% 29% 34% Percentage of non-residents - Poland example 48% 48% 48% 33% 35% 34% 33% 33% 35% 30% 34% 30% 25% 30% 29% 25% 1 Foreign Institutional Domestic Individual Domestic Institutional WSE WSE BM&F Bovespa BM&F Bovespa MICEX MICEX Source: Stock Exchanges data 18

19 MICEX-RTS will become the platform of choice for Russian s Russian companies offerings destinations Total number of offerings (s and follow-ons) Total value of offerings (s and follow-ons, US$bn) % 25% 50% 46% 47% 55% 62% 23% 12% 14% 75% 10% 46% 50% 36% 42% 38% 35% 7% MICEX-RTS objectives Become preferred stock exchange for Russian/CIS offerings, traders and investors into Russian assets Privatization with listing of privatized companies shares on MICEX-RTS Development of domestic investment base (Pension funds, Insurance companies, Sovereign funds) Attraction of foreign investors (T+3, Central Depositary, Marketing) Bringing information disclosure and corporate governance standards in line with international standards Offerings in Russia Offerings both in Russia and abroad Offerings abroad Source: Dealogic 19

20 Russia s privatization plan likely to attract foreign investors and increase number of s/spos Gov. Company Industry Deal type Share Gov. Company Industry Deal type Share Gov. Company Industry Deal type Share Sberbank 60 FNL SPO RusHydro 58 PWR SPO Gazprom Energo 50 PWR VTB 76 FNL SPO Inter RAO 52 PWR SPO RosAgroLeasing 70 FNL Alrosa 91 MM Rosneft 75 O&G SPO Aeroflot 51 TRSP SPO Sovkomflot 100 TRSP Transneft 100 O&G Russian Railways 100 TRSP Rus.Helicopters 100 MNF Rosnano 100 FNL Russian Agri Bank 100 FNL Rostelecom 56 TLC SPO OSK 100 MNF Uralvagonzavod 100 MNF Ilyushin Finance 66 MNF Sheremetyevo 100 TRSP Zarubegneft 100 O&G FSK 79 PWR SPO OAK 83 MNF Russia plans to launch a privatization program in The size of the program is over $32 billion* MICEX-RTS is focused on securing these /SPO transactions and consequently increasing overall volumes and liquidity on the exchange Source: Dealogic, Offerings.ru, Ministry of Economic Development of the Russian Federation, Russian Privatization Plan * 20

21 Domestic institutional demand has significant growth potential UK USA Finland Japan Poland Turkey Germany Pension funds assets structure (2010) - Significant opportunity Russia 73% 1 2 5% 1% 26% 37% 36% 55% 49% 48% 42% 27% 84% 3% 27% 30% 56% 59% 31% 35% Cash equities Bonds Cash Other 4 50% 1% 24% 2% 3% 7% 21% Pension funds assets (US$bn, 2010) - Significant opportunity As % of GDP 4% 3% 16% 13% 64% 81% 82% 5% 16% 4% 2% 3% 1% 3 Pension system development expected to drive investment Currently Russian pension funds savings are concentrated in low-yield bonds that represent 84.4% of their total investment portfolio due to regulatory limitations Less than 0.7% of pension funds saving are currently invested in equities MICEX-RTS is actively involved in development of new legislation which will stimulate institutional investment into the equity market Experts predict significant growth in total volume of the available pension funds savings, and that major investment inflow will be driven by pension funds after liberalization of pension savings allocation regulation 10,548 3,471 1, USA Japan 2 UK 1 Finland Germany Poland Russia Turkey Source: OECD, FCSM, NLU, PFRF, Expert RA Rating Agency Note: (1) 2009 numbers for UK (2) Source for Japan: Tower Watson (3) NGPF and GPF structure of portfolio of pension savings (4) Other includes: loans, land and buildings, unallocated insurance contracts, private investment funds and other investments 21

22 Trading Services ASTS & FORTS Platforms: Order-driven market Quote-driven market Discrete auctions REPO CCP clearing Pre-trade risk management DMA service Client connectivity: Proprietary API FIX trading interface UDP multicast FIX FAST ITCH (evaluating solutions) Tested throughput - 20,000 orders/second for each market Market data: level 1, level 2 and full depth order book Online clearing High capacity performance-matching technology for trading Russian equities, bonds, PEPOs, FX and derivatives 22

23 MICEX-RTS technology and infrastructure services Connectivity solutions Connectivity solutions through domestic and global Network Service Providers and international points of presence FIX and FIXFAST as well as proprietary APIs for execution and market data delivery Accessibility through Independent Software Vendors and trading networks: Bloomberg, Reuters, Fidessa, Sungard, CQG and others Comprehensive exchange colocation with variable footprint sizing options Certification and testing environment services for new client/vendor technologies Dedicated client relationship team for a smooth on-boarding process 300+ electronic broker systems certified to access the Exchange The Exchange is accessible by more than 15 telecommunication providers including BT Radianz, SFTI and Orange, and more are coming Three data centers in Moscow Client connectivity protocols: Proprietary API, FIX trading interface, UDP multicast FIX FAST 23

24 Thank you for your time and support! Leading Russian capital marketplace Clear strategy: already on track Key growth drivers 24 24

25 Disclaimer This presentation has been prepared and issued by Open Joint Stock Company "MICEX-RTS" (the Company ). Unless otherwise stated, the Company is the source for all data contained in this document. Such data is provided as at the date of this document and is subject to change without notice. This document does not constitute or form part of, and should not be construed as, an offer or invitation for the sale or subscription of, or a solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any offer, contract, commitment or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company. The information in this document has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information or opinions contained herein. None of the Company, or any of its subsidiaries or affiliates or any of such person's directors, officers or employees, advisers or other representatives, accepts any liability whatsoever (whether in negligence or otherwise) arising, directly or indirectly, from the use of this document or otherwise arising in connection therewith. This presentation includes forward-looking statements. All statements other than statements of historical fact included in this presentation, including, without limitation, those regarding our financial position, business strategy, management plans and objectives for future operations are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance, achievements or industry results to be materially different from those expressed or implied by these forward-looking statements. These forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we expect to operate in the future. Important factors that could cause our actual results, performance, achievements or industry results to differ materially from those in the forward-looking statements include, among other factors: perception of market services offered by the Company and its subsidiaries; volatility (a) of the Russian economy and the securities market and (b) sectors with a high level of competition that the Company and its subsidiaries operate; changes in (a) domestic and international legislation and tax regulation and (b) state policies related to financial markets and securities markets; competition increase from new players on the Russian market; the ability to keep pace with rapid changes in science and technology environment, including the ability to use advanced features that are popular with the Company's and its subsidiaries' customers; the ability to maintain continuity of the process of introduction of new competitive products and services, while keeping the competitiveness; the ability to attract new customers on the domestic market and in foreign jurisdictions; the ability to increase the offer of products in foreign jurisdictions. Forward-looking statements speak only as of the date of this presentation and we expressly disclaim any obligation or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation as a result of any change in our expectations or any change in events, conditions or circumstances on which these forward-looking statements are based. 25