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Futures and Options Market In January the total turnover in the MICEX (futures) market has increased by 13 per cent as compared with the preceding month. Thus, in the period from December 22 through January the total turnover in the MICEX (futures) market made approximately RUR 47.65 bln (148.thousand of transactions, 1.17 mln of contracts), against approximately RUR 42.11 bln (81.thousand of transactions, 1.08 mln of contracts) in December. The largest volume of trading in January, as a month earlier, was observed in foreign currency futures, amounting to RUR 22.billion (209 thousand of transactions, 0.75 mln of contracts). Herewith, contracts for the US dollar were in the first place in terms of trading in the MICEX futures market, followed by futures contracts for Euro and for Euro/USD rate.

It is worth noting that prices of futures contracts, concluded in January for RUR/USD futures in the MICEX market were within RUR/USD 29.630.2 for March, RUR/USD 30-31 for June, RUR/ USD 30.531.5 for September and RUR 30.931.3 for December 2010.

The greatest number of transactions (147.12 thousand) per month was made with the futures contracts on equity instruments (79 thousand transactions in December); the volume of trades made RUR 21.2 bln (or 60 per cent more than in preceding month). Herewith, futures for the MICEX index in the short-term MICEX market in terms of the volume of trade were followed by commodity futures contracts for Sberbank of Russia and Gazprom shares. It should be noted, that the value of the MICEX index (the price of transactions) for March and June 2010 was in the range of 1,3801,490 points. Trading trade volume in futures for commodity assets within the period has decreased by 3.5 per cent (from RUR 3.41 billion to RUR 3.29 billion). On January 22 there was one futures contract for MosPrime interest rate with the volume of trade of RUR 400 mln, transactions.

Opposite trends were observed in the RTS FORTS futures market, where the investors activity in January has decreased by 2 times as compared with the previous month. Thus, in the period from December 22 to January 24 the total market turnover of futures and options in RTS was about RUR 973.79 billion (4.5 million of transactions, 20.78 million of contracts) as compared with about RUR 1,944.04 billion (8.69 million of transactions, 48.21 million of contracts) in December.

The greatest demand among the participants, as before, was demonstrated in Futures: trading volume in them during the period under review amounted to RUR 942.3 billion (4.44 million of transactions and 20.05 million of contracts). The first place in terms of futures trading were the futures contracts on the RTS index, which was followed by the futures contracts for dollar-ruble rate and for the shares of Sberbank of Russia and Gazprom. It should be noted that in the futures market of RTS FORTS prices of the recent transactions, concluded on futures contracts for the date of execution on March 15, 2010, were within RUR 29.8-30.5/ USD, on June 15, 2010 - RUR 30.2-30.9/ USD, and on September 15, 2010 RUR 30.5-31.6/ USD, on December 15, 2010 RUR 31-32/USD.

The value of futures of the RTS index (based on the prices of recent contracts) for March 15, 2010 was estimated on average at 1 4301 590 points, for June 15 - 1 4501 590 points and for September 15 - 1 4501 5701. Options enjoyed far less demand, the turnover made about RUR 31.bln (60.62 thousand transactions and 1.73 mln of contracts). The maximum daily turnover in the short-term RTS futures market in the period under review made RUR 121 billion (as of January 22), and minimum was RUR 5.44 bln. (on December 31).

1 RTS index as of 24.01.2010 made 1 489.46 points (See Table 2).

FINANCIAL MARKET External factors behind the Russian stock market dynamics In January the Russian financial market dynamics, as a month earlier, was largely dependant on the situation in the global financial markets. Among the basic factors of positive global market indicators, affecting the Russian market in January, one should mention:

Increased global oil price at the first half of the month (up to USD 82 per barrel);

payment of U.S. banks Bank of America Corp., Citigroup and Wells Fargo USD bln and USD 25 billion, respectively, obtained under the anti-crisis program;

reduction in the net loss of U.S. bank Citigroup to USD 1.61 billion as of 2009 results, compared with the loss of USD 27.7 billion a year earlier;

information about the increased net profit of IBM by 9 per cent to USD 13.4 billion as per results and of the U.S. bank Goldman Sachs Group Inc. - 6 times (up to USD 13.4 billion) increased orders for durable goods in the US;

plans to form a common reserve with the total volume of USD 120 billion by the countries of the Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea and Hong Kong to meet short-term problems with foreign exchange liquidity in the region intention of the U.S. government to allocate USD 30 billion in the framework of government financial assistance to small businesses with the purpose of accelerating the rates of economic recovery;

the decision of Japan Government to support Japan Airlines Corp., which happened to be on the verge of bankruptcy;

news from China: government's plans to invest in the national economy USD145.3 billion in 2010, export growth in December 2009 by 17.7 per cent as compared with December 2008, increase of international reserves by 23.3 per cent as per 2009 results.

Along with the above, the following events were restraining the global markets growth within the month:

US government plans to restructure the financial sector to limit the risk of operations;

Reduction of Greece credit ratings by the international agencies Moody's and Standard & Poor's to the lowest level among the countries of the Eurozone;

Upgrading of the upper threshold of US national debt to USD 12.4 trillion, as well as an increased number of requests for unemployment insurance in US in January;

decline of GDP in Germany in 2009 to 5 per cent (tentative data);

the decision of the British bank Barclays to suspend payment of bonuses to the top managers until 2013;

Plans to reduce the American company UPS of 1,8 thousand employees, by pharmaceutical companies Pfizer and Merck by more than 2 thousand jobs in the US;

information about Alcoa net loss in the amount of USD 1.15 billion in 2009;

China's central bank upgrading the share of reserve requirements to the banks by 0.5 p.p. - up to 15 per cent.

All those factors have generally resulted in volatile dynamics of the global stock indices in January, as of the month results. Herewith, the markets of developed countries were demonstrating a general decline in the indices by 1-4 per cent, with the exception of Japanese and British indices, where an increasing trend was observed. At the same time, the stock markets of the majority of developing countries have grown over the month. The exception was the Mexican IPC index (3.per cent). Herewith, there was observed a decline in the basic stock market indices in the global markets as compared with early January 2010 results (See Table 2 and Fig. 5).

Table DYNAMICS OF THE GLOBAL STOCK INDICES (AS OF JANUARY 24, 2009) Dynamics Dynamics Index Ticker Value within the since the year month(%) beginning(%) MICEX (Russia) MICEXINDEXCF 1 410.38 2.35 2.RTS (Russia) RTSI 1 489.46 4.49 3.Dow Jones Industrial (USA) Average (USA) DJI 10 172.98 2.32 -2.NASDAQ Composite (USA) NASD 2 205.29 1.45 2.RUSSIAN ECONOMY: TRENDS AND PERSPECTIVES Table 1, contd Dynamics Dynamics Index Ticker Value within the since the year month(%) beginning(%) S&P 500 (USA) SPX 1 091.76 2.00 2.FTSE 100 (UK) FTSE 5 302.99 0.17 2.DAX-30 (Germany) DAX 5 695.32 3.97 4.CAC-40 (France) CAC 3 820.78 1.32 2.Swiss Market (Switzerland) SSMI 6 493.96 0.16 0.Nikkei-225 (Japan) NIKKEI 10 590.55 4.00 0.Bovespa (Brasil) BUSP 66 220.00 0.45 3.IPC (Mexico) IPC 30 830.91 3.05 4.IPSA (Chile) IPSA 3 774.82 7.28 5.Straits Times (Singapore) STI 2 819.71 1.18 2.Seoul Composite (South Korea) KS11 1 684.35 2.44 0.ISE National-100 (Turky) XU100 53 997.49 5.30 2.BSE 30 (India) BSE 16 859.68 1.56 3.Shanghai Composite (China) SSEC 3 128.59 0.18 4.Morgan Stanley Emerging Markets Free Index EFM 763.24 1.76 2.* Versus index indicator valid on December 21, 2009.

200,0% 200,0% Dow Jones Industrial Average Dow Jones Industrial Average 185,0% 185,0% NASDAQ Composite NASDAQ Composite The MICEX Index The MICEX Index 170,0% 170,0% The RTS Index The RTS Index 155,0% 155,0% 140,0% 140,0% 125,0% 125,0% 110,0% 110,0% 95,0% 95,0% 80,0% 80,0% 65,0% 65,0% 50,0% 50,0% Fig. 5. Dynamics of the main USA and Russian stock indexes (in % versus the date 01.11.2008) Corporate News VTB Bank At the end of December 2009 - January 2010, OAO VTB Bank has provided loans / opened credit lines to: TNK-BP group in the amount of RUR 26.8 billion, to OAO GC Russian Sea - in the amount of RIR 1.7 billion; to GC Rostechnologii RUR 600 million; to Smolensk region RUR MARKET million; toSynergy group of companies - RUR 4 250 million. On January 14 OAO VTB Bank has disclosed unconsolidated results for 2009 developed according to RAS: assets on January 1, 2010 amounted to RUR 2 674 billion, as compared with RUR 2 551 billion as of January 1, 2009, net profit RUR 27.96 billion (against RUR 26.89 billion in 2008).

Gazprom On December 23, OAO Gazprom has signed an agreement on cooperation with St. Petersburg, and on January 15 with the Leningrad region in 2010. The parties will cooperate in the development of an integrated gas supply system of the RF Subjects. On December 27, OAO Gazprom and China National Oil and gas Corporation have signed an agreement on the basic conditions of gas supply from Russia to China. On December 28, OAO Gazprom have signed an agreement with Uzbekistan on the terms of gas supplies.

Rostelecom On December 22 OAO Rostelecom has disclosed unaudited consolidated results developed under IFRS for the first 9 months of 2009: net profit amounted to RUR 3.3 billion, having falling over the same period in 2008 to 72.5 per cent; OIBDA indicator (operating income before amortization, depreciation of fixed assets and loss (profit) on disposal of fixed assets) decreased by 19.5 per cent to RUR 9.5 billion, OIBDA net profit margin made 19.5 per cent. On December 30 Consortium RID-Expert RA increased the corporate management rating of OAO Rostelecom to level 8, which is currently the highest rating for the Russian companies, indicating an advanced corporate governance practice and a high level of transparency.

Sberbank of Russia At the end of December - January, the Sberbank of Russia continued to provide credits to domestic enterprises in the framework of the program on the support to priority sectors of the Russian economy. In particular, Sberbank of Russia provided the loan / credit lines to ZAO Plant fertilizer Kirovo-Chepetsk Chemical Complex (RUR 1 billion), to OAO Chelyabinsk Tube Rolling Plant Group (RUR 10 billion), to OAO Tulachermet Company (RUR 3 billion). In addition, on December 30, Sberbank of Russia, Vnesheconombank, OAO Gazprombank and OAO Alfa-Bank have provided to the Ministry of Finance of the Republic of Belarus a syndicated credit in the amount of RUR 6 billion for the term exceeding 1 year.

On December 23 Sberbank of Russia has disclosed financial results developed under RAS for 11 months of 2009: net profit amounted to RUR 18.5 billion against RUR 113.2 billion for months of 2008, assets increased by 1.3 per cent and on December 1, 2009 amounted to RUR 6,806 billion; Russias enterprises were granted credits amounting to nearly RUR 3.6 trillion. The share of restructured loans for which changes were made in the original contracts in favor of the borrowers side, in the loan portfolio of legal entities by December 1, amounted to 15.5 per cent. On January 22 Fitch Ratings agency has revised its long-term rating of Sberbank of Russia in foreign currency from negative to stable. The revision came after the change in the long-term rating of the Russian federation in foreign currency from negative to stable.

Corporate bonds market The volume of the Russian domestic stock market (as per nominal value of shares in circulation, denominated in national currency) in January 2010 has grown again at the end of the month reached RUR 2,417.5 bln (692 emissions and 404 emitters), which is more than the relevant indicator of preceding month by 4.2 per cent1. The number of emitters has been practically unchanged (for comparison, in late December there were 689 emissions, made by 403 emitters). There are still one emission of bonds in circulation, denominated in Japanese yens and three emissions denominated in US dollars.

At the beginning of the year the volume of trading in the secondary market of corporate bonds reached a new record level. The trading volume in the period from December 22 of the last year to January of the current year reached its maximum over the last eighteen months and amounted to 1 As per Rusbonds information RUSSIAN ECONOMY: TRENDS AND PERSPECTIVES RUR 90.9 billion, though the growth was virtually unnoticeable (in the period from November 23 to December 21 2009, the trading volume was equal to RUR 90.5 billion)1. In the period under review on the MICEX Stock Exchange there were committed 26.4 thousand of transactions in bonds (for the previous period, the number of transactions amounted to 27.0 thousand).

In January 2010 the trend to growing index of the Russian market of corporate bonds IFXCbonds, which was observed throughout the preceding year was continued. Within the period from December 23 to January 25, the index has grown by 6.2 points (or 2.4 per cent), having reached the highest level since the beginning of its assessments. The effective yield has decreased from 10.5 to 9.8 per cent during the period under review (see Fig. 6). The duration of corporate bonds market portfolio dynamics is volatile in the recent months: after a sharp upsurge in the last month, by the end of January of the current year it has decreased again and made 592 days, which is by 23 days less against the level of the end of 2009.

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