NDC Approaches Tenth Anniversary with RUR 3.3 Trillion on Deposit

17 January 2007
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MOSCOW - The National Depository Center (NDC), Russia’s only settlement depository servicing the full range of Russian securities, today released a summary of its 2006 results showing growth of 85.5% in the value of securities on depository accounts -- from RUR 1.77 trillion to RUR 3.3 trillion (USD 124.9 billion). Most of the rise in assets on deposit was among shares of joint-stock companies and corporate bonds. Shares on deposit rose from 15% to 35% of all assets, exceeding the value of bonds (corporate, municipal and federal), which represented 31% of assets. The value of shares on deposit rose 343.7% to a total RUR 1.14 trillion. The value of Unit Investment Trusts on deposit with NDC rose nearly eight-fold.

As the Center approached what will be its 10th anniversary (21 Jan.), Nikolai Egorov, Director, NDC, told a press briefing: "In 2006, NDC proved its status as the leading Russian settlement depository. We regard the impressive growth dynamics of assets deposited with NDC, especially shares, to have resulted from a successful realization of our strategy of diversification of NDC services and improved quality services. The inflow of shares into nominal NDC custody was caused also by the growth of liquidity in the MICEX group and decreased inventory charges. The number of the transactions processed by NDC also rose considerably (1.7-fold). Thus about 80% of our operations are exchange and over-the-counter transactions involving shares."

In the past year NDC has undertaken the necessary preparatory work to become licensed as a central depository. It has considerably increased its own capital (RUR 870.41 million as of 1 Oct., up 39.2 % since the beginning of the year). It secured an A+ rating from the international agency Thomas Murray. It has also paid close attention to improvements in its corporate governance, technological base and interaction with participants of the market, systems of risk control, and also to improvements in service quality. NDC acted swiftly to implement projects contributing to the market for OJSC Gazprom shares and providing for OJSC Rosneft’s IPO on the MICEX exchange. Other successful projects included implemention of the first stage of NDC’s new CSD technological platform and the launch of a new technology for the collection of depositor lists.

NDC's stronger position in the market is confirmed by the dynamics of the basic operational records. Thus, the number of inventory operations for 2006 exceeded 1.9 million, an average of 159,000 operations per month, 71 % more than for 2005. The number of ruble transactions on conditions of "delivery versus payment," carried out through NDC rose 14.4 % to 2,925 in 2006 (compared with 2,557 in 2005), while the total value of ruble transactions in comparison with 2005 rose by 15.1 %, from RUR 143.72 billion to RUR 165.42 billion (USD 60.9 billion). The market value of securities moved during inventory depository operations for 2006 exceeded RUR 30.7 billion, up 108% compared with 2005 (RUR 14.7 billion).

The number of accounts opened by domestic entities increased from the beginning of the year to 1,556 (up 8.7 %), and the number of securities issues accepted for servicing rose to 1,736 (up 22.4 % from 10 Jan.,2006). The number of securities held on account at NDC for 2006  has risen 5.4-fold, from 50.3 billion individual items to 259.3 billion. This arises not only from the acceptance from new customers of the securities of existing issuers, but also from acceptance for servicing of the securities of new issuers. Thus, the total number of issuers whose securities are serviced by NDC has increased since the beginning of 2006 by 18.6 % to 816.

In 2006 NDC made 221 coupon payments on bonds (up 62.5%) and also paid RUR 34.7 billion against principal (up 177.6%). As of 31 Dec., 2006, the number of bond issues with a subsequent retirement term reached 179 (issued by 139 entities). As the nominal holder of registered securities NDC in 2006 received to its account and paid out to its depositors RUR4.1 billion (up 78.26%) in dividend and share income as well as US$61.98 million for foreign currency bonds (up 10.54%). 

Through the year, NDC expanded its list of services and strengthened its interactions with registrars. By 29 Dec., 2006, the number of nominal holder accounts opened by NDC with registrars reached 496. Of these, 130 accounts were opened with registrars for unit investment trust investors, and 366 with registrars for holders of shares.

 

Note to Editors: Value of the securities on deposit in NDC accounts is an operational indicator which does not include the market value of other assets held in  issuers’ accounts. The value of shares and units of Unit Investment Trusts is based on market value, and the value of bonds is based on nominal value.

About NDC

Not-for-Profit Partnership “The National Depository Center” (NDC)  is a settlement depository of the MICEX Group, and is Russia’s largest settlement and safekeeping provider in terms of assets held, and the only national securities settlement system handling the full range of Russian issue-grade securities. NDC is an authorized depository for most issues of state, corporate, municipal and sub-federal bonds. It services 100% of deals conducted in the state bonds market and, during the most recent three months, more than 95% of turnover in corporate shares and bonds, and sub-federal and municipal bonds.

Among NDC’s founders are Bank of Russia and MICEX CJSC. The members of Non-Commercial Partnership National Depository Center include Bank of Russia, MICEX CJSC, Sberbank, International Moscow Bank, JP Morgan Bank International LLC, Vneshtorgbank OJSC, Bank Rossiysky Credit OJSC, Evrofinans Mosnarbank OJSC, Rosbank, Gazprombank CJSC, ING Bank Eurasia CJSC and Deutsche Bank LLC.

 


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