Company News

Mar 26. Finam extends trading until midnight.

Finam Investment Company is pleased to offer its clients a new service. Effective March 26, they will be able to perform operations with securities traded on the Russian stock market after the trading session is completed. In addition, the investment company has considerably extended opportunities for trading system QUIK. Now Finam's clients will be able to perform operations not only on the domestic, but also leading international stock exchanges. The new service is due to the reduced timeframe of trading on MICEX, as investors will be unable to promptly react to the trends which characterize the opening of a trading session on the US stock market. Finam's new service is designed to overcome this problem for the company's clients. At present, they can perform operations from 6 pm to midnight and based on LSE and NYSE trends up to the time when trading sessions on these stock exchanges close and follow trends on the global stock market online rather than postfactum.

The new service is available to Finam's clients who use the QUIK trading system. By using this service, investors will be able to send orders and perform transactions with the 12 most liquid securities listed on MICEX. Head of Trading Systems Department of Finam Investment Company Dmitry Antsiferov made the following observation: "Needless to say, operations will be performed only among our company's clients. However, taking into account that a significant number of investors operates through Finam, I do not expect traders to encounter any problems in searching for counteragents". In addition, effective today, Finam's clients will be able to perform transactions on major international stock exchanges (NYSE, NASDAQ, LSE) via the same QUIK system. This will make operations much more convenient for Russian clients operating on these trading floors. Mr. Antsiferov said, "Last year, the number of our clients which invest on the international market more than doubled. Needless to say, we're trying to make their operations as seamless as possible. New options were offered precisely based on their queries and requests. We also plan to continue updating our software". PR Department of Finam Investment Holding

Feb 8. Finam ranks as #1 brokerage firm.

According to the Moscow Interbank Stock Exchange, Finam Investment Company ranked #1 among most active stock market operators on its main trading floor in January 2007. Finam’s turnover stood at Rub 250.2 bln ($9.48 bln). With 17,366 registered and 7,462 active customers, Finam became the second largest brokerage by customer base and moved up to MICEX top 3 operators by turnover in customer transactions. Finam’s cumulative trade turnover was Rub 271.77 bln ($10.29 bln).

Furthermore, after having reached 4th position in the rating of brokerages trading on RTS Stock Exchange for the last three months of 2006, Finam ranked among the top 3 for the first time ever in January 2007 with 9,553 deals and trading volumes surging to Rub 1.33 bln ($50.38 mln). As for futures market RTS-FORTS, Finam remained in 3rd position in the trading volumes rating in January 2007 and moved from 17th to 12th position in the rating of options-trading brokerages in December 2006.

Finam's leadership positions were reflected in the rating of leading Russian brokerage firms in 2006 compiled by RBC-Rating's. Finam ranked #2 with a cumulative annual turnover of $66.149 bln, more than 4.5-fold y-o-y.

Finam Investment Company's CEO Viktor Remsha had the following to say about the company's success story in 2006: "Active expansion into new regions, our aspiration to provide top-notch quality services and the roll-out of new services helped us to ramp up trading turnover. We expect that the trend will remain in place this year. The Russian stock market holds strong potential and we are always on the lookout for new investment ideas. Besides, we provide our customers the opportunity to take part in IPOs of Russian companies. These factors will help our clients to generate more profits and will allow us to further bolster our market positions".

PR Department, Finam Investment Company.

Jan 11. Finam Management sums up 2006 performance.

Management company Finam Management (which is part of Finam Investment Holding) has recapped the 2006 results of its mutual funds. The highest gains during the period were posted by mutual fund Finam MICEX Index, which returned 54.43% to its holders.

Meanwhile, in December alone Finam's MICEX Index mutual fund managed to grow the value of its equity participations by 8.39%. In the last month of 2006 the value of this mutual fund's net assets surged 20.48%. "In 2006 robust growth of the stock market allowed investors to reap handsome gains just by following the benchmark. We expect that this year the mutual fund will also exhibit robust growth which will translate into higher returns for our MICEX Index mutual fund" – Finam Management's general director Pavel Kirichenko forecasts.

Interval fund Finam Low Liquidity Shares returned 38.44% to investors in 2006. Last December this figure was 10.34%. The value of the mutual fund's net assets also grew by this amount during a month. This is attributable to the fact that its last interval was opened in November 2006 and the next opportunity to acquire its equity participations will be provided to investors in February 2007. "According to the forecasts by our analysts, in 2007 second-tier stocks will be able to achieve considerable gains. Meanwhile, the strongest upside potential is held by the shares of those issuers whose products target the domestic market. Shares of the utility, consumer, banking and telecom sectors make up the backbone of portfolios in our interval mutual fund" – Kirichenko said.

Mutual fund Finam First managed to boost the value of its equity participations by 37.25% within a year, whereas the 3-year indicator is 178.63%. Last December the mutual fund returned 12.99% to its sharers, while the value of its net assets climbed 6.47%, while that of mutual fund Finam Bonds surged 16.5%. The value of this mutual fund's net assets grew 5.76% in 2006 and 1.15% in December.

Among Finam's close-ended mutual funds the highest spike in the value of equity participations was achieved by venture mutual fund Finam – Information Technologies. Investments in its equity participations returned 42.95% in January-September (the fund was formed in 2006) and 8.11% in December 2006. During this month the value of net assets shot up 72.98% thanks to the successful placement of additional equity participations by this fund. "Handsome returns and also good prospects of the Russian IT sector sparked investors' interest in this venture fund. Next year we plan to float several more new equity participations of this fund and allocate funds raised for the acquisition of new assets in the high-tech segment" – Kirichenko said.

Close-ended real estate mutual Fund Finam – Land increased the value of its equity participations by 11.52% in H206 and 5.49% in December.

PR Department of Finam Investment Holding

Finam sums up 2006 asset management. Finam Investment Holding has recapped its 2006 asset management performance. The company's aggressive strategy yielded the highest returns, as the average value of these portfolios surged 53.72%.

Solid gains under the aggressive strategy were achieved thanks to the combined focus of investment portfolios on blue chips (in particular, SBER and UES prefs) and low liquidity shares. The latter exhibited robust growth, producing a considerable impact on the price trend of investment portfolios. "Strong results in 2006 are primarily attributable to the spike in such shares as Krasnoyarsk Generation, Rostovenergo, Kaluga Turbine Plant, the Ufa Refinery, etc." – Finam Investment Holding's strategist Semen Birg said.

The balanced strategy allowed Finam's clients to increase the average value of their investment portfolios by 45.85%. This asset management model involves distributing assets in equal portions between shares and bonds, which makes it possible to minimize the risks associated with a decline in the value of assets and achieve gains which are substantially higher than those available in alternative investment areas.

The least risky conservative strategy returned 17.26%. In line with this model, 70% of the investment portfolio comprises bonds and blue chips account for another 20%. The long-term growth strategy, which Finam came out with in June 2006, added 20.58% within seven months. "In 2006 some assets in our portfolios exhausted their upside potential. In particular, this year we excluded Lukoil's commons and added Norilsk Nickel commons. We believe second-tier stocks offer the strongest upside potential in the months to come. We purchased for our portfolios shares of Mechel, Electrozinc, Lengazspetsstroy, Magnit and a number of other up-and-coming equity plays. The total number of shares with a Buy recommendation is 21. Close attention is devoted to issuers whose products target the domestic market. At issue are consumer companies, banks, telecoms, transport, utility and construction firms" – Birg said.

PR Department of Finam Investment Holding

Finam Management company recaps July 2006 performance.

Finam Management (part of Finam Investment Holding) has reviewed its July 2006 performance. Recovery of the global stock markets on the back of soaring crude prices and a favorable macroeconomic environment helped Finam's asset managers boost the ROI of their mutual investment funds. Since the repercussions of the May correction are still being felt on the stock market, only fixed income funds have seen back ink over the past three months. However, all Finam's mutual investment funds posted solid returns on the six-month scale.

The Least Liquid Shares fund displayed the most impressive growth (+6.53%) among Finam's mutual investment funds. The Second-Tier Shares fund holds significant upside potential, as well, said Head of Finam Management Pavel Kirichenko, who went on to note that the company expects that net value of Second-Tier Shares' assets will outperform the ROI trends of Finam's other investment funds. Finam MICEX Index (+4.08%), Finam First (+2.79%) and Finam Bonds (+0.45) have also been among the top performers in the past few months, as Finam First reported annual ROI of 52.41%, Finam MICEX Index raised net asset value (NAV) by 74.61% y-o-y, Least Liquid Shares was up 38.70% and Finam Bond landed 6.13% higher y-o-y .

PR Department, Finam Investment Company

Finam's individual asset management portfolio grows by over 40% in H106.

Finam Investment Company continues to review the performance of its individual trust asset management and advisory asset management in H106. The value of managed assets soared 43.3% to $122.3 mln during that period. On the whole, the cost of the projects implemented by Finam's Investment Division (capital market and asset management) is currently in excess of $1 bln. In addition to asset management, specialists of the Investment Division deal with direct investment projects, arrange M&A deals (including privatization deals), operate on capital markets (placing stocks and bonds). However, it is trust and advisory asset management that showed the most dynamic expansion in the first six months of 2006, since 39% more new customer accounts were opened in H106 than in the year-earlier period and the average size of accounts is up. One of the main reasons behind robust interest in the asset management tool is its attractive ROI capacity. In January-June of this year the average return on Finam's asset management services was 80% for the aggressive strategy, 20.85% for the moderate strategy and 9.9% for conservative strategy.

"It should be noted that one of the most effective factors that helped bring in new customers was the roll-out of new services, namely, personalized financial planning. Offering investors new and higher value-added opportunities is a key facet of our short-term business expansion policy. I'm talking about various specialized products. Highly dynamic development of personalized asset trust management services lays the groundwork for corporate finance projects and we are expecting to launch new issuers on the stock market before long" – head of Finam's Investment Division Dmitry Serebrennikov said. PR Department, Finam Investment Company.

Starting from July 17, 2006 Finam will be offering margin trading in securities services for qualified investors. In accordance with Order # 6-24/pz-n of the Federal Financial Markets Service dated March 7, 2006, the margin limit for qualified investors is 25%, i.e. leverage (shoulder) when buying margin securities could reach up to 1:3.

The term “qualified investors” (also called “higher risk tolerance customers”) refers to those clients of an investment company who have been using brokerage services for more than six months and have been making margin or unsecured transactions for the three months immediately preceding the assignment of “qualified investor” status. Moreover, investors’ total amount of funds deposited on an escrow account and the value of securities held is to be equal to or exceed Rub 1 mln ($37,130).

A broker who provides services to qualified investors also needs to comply with certain requirements. To be more specific, its equity calculated using the methodology approved by the Federal Securities Service should be equal to or above Rub 100 mln ($3.713 mln). It should be noted that Finam lifted its charter capital to the required level as early as in May 2006, which made it possible to promptly offer new services.

It’s noteworthy that requirements by the Federal Securities Service are aimed at reducing risk levels for qualified investors, for instance, if the balance on an escrow account slips below Rub 600,000 ($22,280), the customer will not be able to enjoy benefits of qualified investor status, since the maximum shoulder will then be 1:1 (margin cannot go below 50%).

“Our customers will be able to apply for status on qualified investor list beginning today. In case they meet the requirements laid down by the Federal Securities Service, the procedure will be as short as possible, with investors having to wait no longer than three days for a decision. I believe that most of our clients will be assigned qualified investor status by the end of the year” – said Finam Investment Company’s First Deputy CEO Igor Stepanyan.

Finam Investment Company PR Department

Finam tallied May 2005 individual asset management performance Finam Investment Holding has tallied the performance of its individual trust management in May 2006. Despite a considerable correction on the equity market at that time, returns achieved in line with all three strategies (the so-called aggressive, balanced and conservative strategies) available to customers turned out to be positive. Nevertheless, the correction had an impact on the returns delivered by the company's asset management funds. The conservative strategy yielded 0.06% a month, the balanced strategy – 0.4% and the aggressive strategy – 0.8%. "During a broad-based bear run we took steps to prevent losses by our customers, increased the capital in their investment portfolios and scaled up conservative instruments. This approach made it possible to avoid a hard landing as a result of the year-low downturn" - head of Finam Investment Company's Stock Exchange Department Sergey Dorogavtsev pointed out. It goes without saying that aggregate financials for the first five months of the year look more impressive. The conservative strategy returned 9.6%, the balanced strategy – 23.23% and the aggressive strategy– 46.99% in January-March. "Attractive yields have encouraged an inflow of new customers who are looking for individual trust management services. The first five months in 2006 saw a continued increase in the number of new accounts and their average size. By the end of the year we aim to boost these figures even more by launching new services, for instance, personal finance planning, and offering new instruments - some of which will be available in the near future" – said Head of Finam's Investment Division (corporate finance and asset management provided to large customers) Dmitry Serebrennikov.

Finam recaps Q106 asset management. Finam Investment Holding has tallied the performance of its asset management in January-March 2006. The best results were achieved by Finam MICEX Index mutual fund (19.99%) in terms of equity accretion. As for Finam's individual asset management, the best returns were achieved in line with so-called "aggressive strategy" (18.5%). Since the beginning of 2006, all mutual funds of Finam reported positive yield. Thus, Finam First reported 19.35% return, Finam Low Liquidity Stocks gained 18.48% and Finam Bonds – just 0.58%. As for Finam's individual asset management, the quarterly returns of Finam's clients totaled 10% for the balanced strategy and 8.6% for the conservative strategy.

At the same time, all mutual funds of Finam held strong investment appeal which allowed Finam Management Company to considerably boost its net asset value (NAV). The best NAV showing was reported by Finam First and Finam MICEX Index, which nearly doubled their NAVs, up 107.7% and 105.4% respectively. Finam Low Liquidity Stocks increased NAV by 18.44% and Finam Bonds by 9.76%.

Finam unveils Internet system for mutual fund management. Finam Management Company, part of Finam Investment Holding, has rolled out a new unique service for its clients on the collective investment market. This is a personal Internet-cabinet of a shareholder, which includes the Equity Control System or secure electronic document flow. Finam First and Finam Bonds were the first mutual funds to be included in this system. Finam Management's clients can now place orders to swap or repay their shares through a protected Internet-connection by means of electronic documents authenticated via electronic digital signature. To place an order all a client has to do is complete the required forms in the Equity Control System. Moreover, in the personal internet cabinet a shareholder can view his/her equity portfolio structure on the selected date and the profitability trend for the selected time period. In future, the number of options in the personal cabinet will be extended. The plan is to provide the opportunity to compare the equity portfolio profitability trend with trends of the RTS Index and US dollar exchange rate. A similar service is to be made available to shareholders of all mutual funds run by Finam Management. For the record, on March 24, 2006, amendments to the trust management rules for Finam First and Finam Bonds mutual funds came into force, which provide for the opportunity to place orders to swap or repay shares through the web site of the management company (www.pif.finam.ru). Other mutual funds of Finam will be also included in the Equity Control System after the respective amendments are made to their trust management rules. The personal Internet cabinet of a shareholder allows clients of the management company to perform transactions from home, Finam's adviser for the Collective Investments Department Kirichenko Pavel said. He noted that at present investors can already perform such transactions with their shares in two most popular mutual funds of Finam. Thus, Finam First mutual fund holds the strongest investment appeal in a bull market, while during a correction shareholders prefer to invest in Finam Bonds. Share swaps can be performed without any additional conversion fees, Kirichenko said. PR and Media Department, Finam Investment Holding