Company News

Finam Investment Holding has tallied the performance of its individual asset management in 2005. Net asset value (NAV) under Finam’s management spiked by 300% to Rub 2,263.84 mln ($80.5 mln), and the value of the average account of the company’s clients nearly doubled. Average returns achieved by Finam’s clients on individual asset management accounts in 2005, totaled 33% for the conservative strategy, 55% for the balanced strategy and 100% for the aggressive strategy. The spike in NAV managed by Finam as a part of its individual asset management performance is attributable both to an objective increase in the value of client investment portfolios due to more expensive shares included in them and to a number of other factors among which which we’d like to note the increased value of established clients’ average accounts by depositing additional funds and an inflow of new major clients.

Finam CEO Victor Remsha said that the company is still doing active business with private investors, which account for the bulk of the company’s client base. Meanwhile the qualitative parameters changed substantially in 2005, mainly due to formation of the Investment Banking Division. This Finam subsidiary allows the company to offer major investors additional opportunities and ideas related to investing into blue chips as well as the most promising second-tiers and third-tiers and to put together of Russia’s best management teams.

PR and Media Department

Finam Management recaps 2005 performance of its mutual funds.

Finam Management, part of Finam Investment Holding, has tallied the performance of its mutual funds in 2005. The best results were achieved by Finam First mutual fund (78.51%) in terms of equity accretion. As it turns out, the best showing in net asset value (NAV) was reported by Finam Bonds fund (432.45%).

Overall, all three mutual funds, launched by Finam Investment Holding in 2005 (their formation was wrapped up in April 2005), managed to more than double their net asset values. For example, NAV growth in Finam Low Liquidity Stocks, an interval fund, was 204.52% and 339.29% for the benchmark mutual fund Finam MICEX Index. Speaking about the returns delivered by the new mutual funds, managed by Finam Management, Finam Bonds gained 5.52% in 2005, Finam Low Liquidity Shares added on 35.23% and Finam MICEX Index yielded 57.53%.

Based on Q405 results, all three mutual funds run by Finam Management reported an increase in the value of equity participations and net assets under management. Respective indicators for Finam First mutual funds equaled 6.21% and 86.28%, 10.2% and 50.16% at Finam MICEX Index, 0.78% and 122.52% at Finam Bonds and 8.68% and 24.40% at Finam Low Liquidity Shares.

As for the operating results of mutual funds in December 2005, the strongest returns were delivered by Finam MICEX Index (6.64%), with Finam Low Liquidity Shares next in line (6.05%), while Finam First returned 5.48% on the month and 0.43% at Finam Bonds. Meanwhile, Finam’s mutual funds attracted a large number of new investors last year. For example, NAV at Finam MICEX Index climbed 36.55%, 31.23% at Finam Bonds and 16.8% at Finam First.

"The year 2005 turned out to be successful for our management company, as we rolled out three new mutual funds which exhibited strong investor appeal by boosting their NAVs on a gradual basis and offering attractive returns. In addition, we launched the formation of a unique closed-end mutual fund for Russia (Finam – Information Technologies) which will make it possible to invest in hi-tech concerns. In 2006 we plan to extend 2005 trends and also complete the formation of a mix of new mutual funds by building into it at least one closed-end and one interval fund" – general director of Finam Management Svetlana Likhodkina said.

In business news, Finam has been recognized as one of Russia's most actively and steadily developing investment companies.

The Economic News Agency (ENA) has compiled a rating of the most actively and steadily developing companies and banks in H105. Experts of this news agency, the Russian Chamber of Industry and Commerce, the Russian Banks Association, the National Association of the Securities Market Participants, the Professional Institute of Placements and Circulation of Stock Instruments, as well as directors and experts of leading media market participants, analytical centers, large commercial firms and public organizations participated in this survey.

The main criteria of the rating were not absolute values of bank assets, charter capitals or turnovers, but their pace of growth, credibility and prospects on the Russian market. When conducting a survey ENA used both available financial and statistical information, and also estimates by qualified experts. In the initial stage of the survey, a total of 50 companies were rated in each nomination. In the second stage, functional experts picked up top ten companies in each nomination.

Finam Investment Company was ranked among leaders in the category "Financial, Investment and Venture Companies", sharing the title of the most dynamically expanding company with such heavyweights as UralSib, Troika Dialog, Aton and UFG.

CBR to include Megawatt-Bank in the deposit insurance system.

The Banking Supervision Committee of CBR approved the petition of Megawatt-Bank, part of Finam Investment Holding, / Commercial bank Megawatt Bank, Moscow, registration # 2799/ for its compliance with participation requirements for the deposit insurance system.

Finam First Mutual fund is named Russia's most profitable mixed investment fund in 9M05.

According to the ranking of most profitable domestic mutual funds, posted on the information server Investfunds.ru, Finam First mutual fund was ranked as Russia's most profitable mixed investment fund in 9M05. According to this analytical resource, Finam First's 9M05 earnings yield ratio stood at 68.7. For the record, according to the magazine Kommersant Money, this investment fund owned by Finam has retained its leading position as Russia's most profitable mutual fund for the last 12 months.

Finam tallies the performance of its mutual funds in September 2005.

Finam Management LLC, part of Finam Investment Holding, summed up the results of its mutual funds in September 2005. During this period their yields varied within a band ranging from 0.91% to 13.18%. Furthermore, all mutual funds of Finam increased their net asset value (NAV). This indicator fluctuated from 7.49% to 104.67%.

The highest yields among all mutual funds of Finam Management (License #21-000-00095 issued by the Federal Securities Service on December 20, 2002) were demonstrated by Finam First, which retained its positions as Russia’s most profitable mutual fund in the past twelve months (according to data from the National Managers League). In September Finam First shareholders gained profits equal to 13.18%, while the fund’s NAV more than doubled (104.67%). "This is explained by the fact that investors have been observing the fund’s positive performance for a long time now. In addition, from its inception Finam First has targeted a broad group of investors, as the minimal amount of investments is a mere Rub 1,000 which attracts a number of private investors willing to funnel their savings into the Russian equity market", general director of Finam Management Svetlana Likhodkina said.

Finam Obligatsionny is another Finam mutual fund which saw a considerable rise in its NAV (40.08%), while its yield equaled just 0.91%, which can be explained by a far from favorable environment on the bond market – given a rally on the equity market investors opted to buy into stocks. "At present, Finam Obligatsionny is mostly of interest to those who are committed to a conservative investment strategy. Investors understand that a correction on the market is inevitable, as a result of which they direct their savings towards mutual funds which operate on the domestic corporate debt market", Likhodkina explained.

Stakes in Finam Index MICEX mutual fund gained 12.51% in value in September, with its NAV climbing 19.58% during the same period. "We believe that these figures, on the one hand, point to investor interest in benchmark funds which exhibit strong results on the bullish market, but, on the other hand, to skepticism that the trend will be of a long-term nature. According to our forecasts, a favorable market climate contributed largley to the interest of investors in benchmark mutual funds which will be ramping up their NAV at a fast clip", Likhodkina predicted.

As regards Finam Low Liquidity Shares mutual fund, yields and NAV accretion turned out to be flat – 7.49%. This is explained by the intervallic performance of this mutual fund when the last interval ended in August and the next one will kick off in November.

Finam named one of top 10 players on FORTS in August.

Finam has been ranked among the top 10 participants on the FORTS market both by the aggregate volume of executed deals and option transactions. It is noteworthy that over the past two weeks the FORTS market has set several records both in terms of daily volume and the number of transactions executed. Furthermore, the clients of Finam Investment Company have become more active in picking up futures and options for their investment portfolios.FORTS launched operations on September 19, 2001. The RTS futures section was opened on the basis of trading and settlement technologies and software which have been successfully operated on SPICEX for the past eight years. The RTS Stock Exchange acts as a brokerage and clearing center on the integrated market. To date, 87 companies from Moscow, St. Petersburg, Novosibirsk, Yekaterinburg, Omsk, Samara, Rostov-on-Don, Kazan and Abakan operate on FORTS. FORTS players can trade 10 futures contracts and 5 options.

Finam ranked among top 5 leading stock market operators on MICEX.

Trading volumes at Finam topped Rub 34.2 bln ($1.2 bln) on MICEX in August. This figure allowed the investment company to take fourth place in the list of the most active participants on MICEX Stock Exchange.

Clients of Finam remained active in August trading and reaped gains from a big rally on the Russian equity market. In addition, the company improved its performance by adding new customers to its client base, head of Finam Investment Company’s Stock Exchange Department Sergey Dorogavtsev pointed out.

Finam named one of Russia’s top 10 M&A financials consultants.

Mergers & Acquisitions business magazine published its rating of M&A financial consultants. The method used in making this rating was based on the scope of services actually provided by investment companies and reflected only completed transactions.Finam ranked ninth in the rating of financial consultants by the value of transactions executed and came fifth in terms of M&A projects completed. This is due to the fact that in its M&A activities, Finam does not focus only on large transactions, but also deals with mid-cap concerns. Finam views entities with annual sales from $7-10 mln as potential clients. Meanwhile, businesses with more modest revenue figures can also obtain assistance. The point is that while services provided by M&A financial consultants in the mid-cap sector are currently in high demand, they are provided by a small group of investment companies, head of Finam Investment Holding’s M&A Department Mikhail Kuznetsov pointed out.

Finam is among top 5 exchange traders by turnover in July.

The investment company’s aggregate turnover topped $1 bln in July, up 18.45% in June ($851 mln). This sterling performance is primarily attributable to the ongoing stock market rally. In addition, the investment company’s results turned out to be less volatile compared to other stock market participants. This is due to the traditionally robust trading activity by Finam clients and also its extensive customer base, head of Finam Investment Company’s Customer Services Department Dmitry Serebrennikov, pointed out.