NSD Reports Increased Turnover for 1Q 2011

MOSCOW - National Settlement Depository (NSD), Russia's only settlement depository servicing the full range of debt and equity securities of Russian issuers, reports its operating results for the first quarter of 2011.

NSD’s customers’ cash accounts turnover and its securities turnover (the market value of securities transferred in inventory operations) for 1Q 2011 increased to RUB48.176 trillion and RUB17.5 trillion respectively. It is 22% and 12.6% more than for the same period of 2010 (RUB37.658 trillion and RUB15.544 trillion accordingly).

Eddie Astanin, Chairman of the NSD's Executive Board, said: "A positive dynamics of growth of the company's main indicators reflects continuing post-crisis recovery of the market and its increased investment attractiveness. This year we plan to propose our clients to use our new technologies and services allowing to improve an efficiency of their operations. In the first quarter of 2010 we saw an increase in the number of foreign issuers' securities accepted for servicing by NSD, as well as a doubling of payments conducted through the Banking Electronic Speedy Payments system of the Bank of Russia, its RTGS system”.    

NSD's revenues for 1Q 2011 in compliance with RAS reached RUB1.4 billion; the company's expenditures for the same period amounted to RUB668.168 million. NSD's net profit amounted to RUB612.181 million.

In 1Q 2011 the company's total equity according to RAS increased by 2.8% amounting to RUB8.089 billion as of 31 March, 2011 (against RUB7.868 billion as of 1 January, 2011).

Cash settlements

Cash settlements on MICEX Group's markets at the market closing prices

In 1Q 2011 the aggregate turnover of trading accounts for provision of settlements between participants on MICEX Group's on-exchange markets reached RUB21.992 trillion, including:

• RUB16.512 trillion in stock exchange market (28% growth against 1Q 2010)
• RUB5.079 trillion in governmental securities market (7% increase against 1Q 2010)
• RUB401 billion in derivatives market (52% decrease against 1Q 2010).

Operations held via the Bank of Russia's settlement network

For 1Q 2011 the number of payments conducted via NSD's correspondent account with the Bank of Russia increased by 26% against 1Q 2010 and amounted to 140,659 payments.

The turnover of NSD's correspondent account with the Bank of Russia using its RTGS system, Banking Electronic Speedy Payments (BESP) reduced by 38% against 1Q 2010 and reached RUB26.513 trillion.

For 1Q 2011 the number of payments conducted via NSD's correspondent account with the Bank of Russia using the BESP System increased in 4,5 times amounting to 12,442 payments.

A significant increase in the number of operations conducted using the BESP system is mainly caused by technologic improvement of the software and enhancement of the settlement services in the course of conducting of payments through the BESP system.

Securities safekeeping

Value of securities in depository accounts opened with NSD amounted to RUB8.096 trillion as of 31 March, 2011. It is 4.9% more than as of the beginning of 2011 (RUB7.718 trillion as of 31 December, 2010). The market value of Russian issuers' shares on deposit with NSD grew by 9.4%. The aggregate nominal value of the corporate and regional bonds kept by NSD grew by 4.9%, value of Eurobonds reduced by 5.5%, and value of UIT units raised by 28.9%.

The number of inventory operations in comparison with the comparable period of 2010 increased by 9.5% reaching 690,225 operations, including 7.7% growth in inventory operations with shares (538,931 operations). In 1Q 2011 78.1% of all inventory operations held by NSD were represented by operations with shares.

The number of issuers which securities were serviced by NSD was increased by 3.7% from the beginning of 2011 reaching 1,633 issuers. Total number of securities issues serviced by NSD grew by 5% since the beginning of this year and amounted to 3,431 issues. In the meantime the number of foreign issuers' Eurobond issues serviced by the company rose by 9.4% reaching 313 issues. The number of foreign issuers' shares grew from 19 to 70 issues as of 31 March, 2011. The number of depository accounts (including accounts opened by legal entities-non-residents) was increased by 2.8% against the beginning of this year and amounted to 1,954 accounts.

The aggregate number of securities on deposit with NSD reduced by 1.1% (from RUB2.016 trillion as of 31 December, 2010, to RUB1.994 trillion as of 31 March, 2011).

NSD remains the leading Russian paying agent on corporate and regional bonds. As of 1 April, 2011 its share in the market of paying agent's services was 40.5% on basis of all number of corporate and regional securities issues in circulation, and 42.5% based on the number of issuers of corporate and regional securities in circulation. For 1Q 2011 NSD being a paying agent accepted for servicing 27 bond issues of 16 issuers. As of the end of 1Q 2011 the total number of bond issues serviced by NSD as a paying agent amounted to 328 issues of 172 issuers.

For 1Q 2011 NSD made 158 payments as income on corporate and regional bonds and on the Bank of Russia's bonds for a total sum of RUB628.411 billion (this is by 370% more than for the same period of 2010 – 136 payments for RUB132.835 billion). The company also paid RUB578.3 million as income on registered securities (dividends, UITs income, revenues from repurchase of shares); this is by 39% less than the same indicator for 2010 (RUB948.2 million). The sum of Eurobonds' coupon and maturity payments for the first three months of 2011 amounted to RUB 5.1 billion.

For the first three months of 2011, in its role as Russia’s national numbering agency, NSD assigned international ISIN and CFI codes to 233 Russian securities and withdrew ISIN codes from 62 Russian securities.

In 2008 the Federal Financial Markets Service's Provision for Foreign Financial Instruments as Securities approved by FFMS Order #07-105/pz-n of Oct. 23, 2007, came into effect. According to this document NSD, acting as a member of Association of National Numbering Agencies (ANNA), provides services related to qualification of foreign financial instruments as securities to stock market participants.

As of 31 March, 2011 (including data for the previous years), NSD received and processed 48,112 requests on financial instruments (including requests on the same instrument sent by different clients). By the end of 1Q 2011 information about 16,644 instruments was provided to the market participants; out of them 14,215 instruments conform to the FFMS qualification requirements.

Note

Value of securities held 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 NSD

National Settlement Depository (NSD) is the largest settlement depository in Russia, a part of the MICEX Group, servicing on-exchange and OTC transactions with all types of debt and equity securities of Russian issuers and providing settlement services to participants in financial markets of the Russian Federation.

NSD provides storage of global certificates and depository accounting for 99% of corporate bond issues, sub-federal and municipal bond issues. It services 100% of transactions conducted in the federal bond and the Bank of Russia bond markets, more than 99% of transactions conducted in the corporate and regional bond markets, the majority of transactions with equities and also services UIT units and securities of foreign issuers.

In accordance with agreements concluded between NSD and the Bank of Russia, NSD acts as a settlement center for the organized securities market.

NSD is Russia's national numbering agency and the substitute numbering agency for the CIS, authorized to assign the international ISIN and CFI codes.