London Stock Exchange for companies from Cheliabinsk region

London Stock Exchange

for companies from Cheliabinsk region

November 2006 2

AGENDA

• Why London?– Reasons for listing – Managed assets– Main Market or AIM?

• Main Market– International listings comparison– Seasonality– DR trading on the IOB– Top 10 companies traded on the IOB

• AIM– Capital raised– AIM growth – Total AIM IPOs – Access to capital – Cost structure

• How to find us?– Russian website– Contact details

November 2006 3

Main reasons for listing on the LSE

Growth

Independent Market Expertise

Recommendations on how to maximise the value of joining a

London market

The LSE supports customers in maximising shareholder value through supporting capital raising and generating liquidity whilst maximising opportunities from their increased profile

CapitalRaising it

efficiently & effectively when

required

ProfileMaximising

marketing/PR opportunities

LiquidityIncreasing and

maintaining liquidity

November 2006 4

Volume of Assets Managedin Financial Centres

Fund management activities in the UK are concentrated in a single location – London.

Source: Big Dough, Hemscott (September 2005)

0

2000

4000

6000

8000

10000

12000

14000

London New York Boston SanFrancisco

LosAngeles

Chicago Paris Frankfurt Munich

Equity ($, billion)

$7

,58

4

$3

,08

1

November 2006 5

Main Market or AIM?

Pre-vetting of Prospectus by the UKLA Compliance required with the rules of the UKLA Normally a three-year trading record required Minimum of 25% of GDRs/shares in public hands Prior shareholders approval for certain transactions Sponsors needed for certain transactions

Regulation by the LSE No trading record required No minimum amount of shares to be in public hands In most cases, no prior shareholder approval required

for transactions Normally, admission documents not pre-vetted by

Exchange or UKLA but by nominated adviser (Nomad) Nomad required at all times

Main Market

November 2006 6

• Why London?– Reasons for listing – Managed assets– Main Market or AIM?

• Main Market– International listings comparison– Seasonality– DR trading on the IOB– Top 10 companies traded on the IOB

• AIM– Capital raised– AIM growth– Total AIM IPOs – Access to capital – Cost structure

• How to find us?– Russian website– Contact details

AGENDA

November 2006 7

International Listings

Source: London Stock Exchange, August 2006

Total New International Issues for Main Market

0

1

2

3

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Ne

w I

ss

ue

s

2003

2004

2005

2006

The Exchange’s Main Market continues to be an attractive venue for the international listings.

November 2006 8

In 2006, 17 international companies have raised over $16 billion on the Exchange’s Main Market.

International IPOsseasonality

Source: London Stock Exchange, November 2006

Money Raised in International IPOs on Main Market in 2006 YTD ($mn)

1,070

3,010

47498 66 125 244

578

6,794

18 153639 683 972

372 336

1,062

Com

star

Lott

e

Kin

gdom

Hot

els

Rol

ta

Car

ador

Gol

denp

ort

Che

rkiz

ovo

Col

t T

elec

om

Ros

neft

Nap

o

Pha

rmac

eutic

als

A&

D P

harm

a

Aer

Lin

gus

Kaz

mun

aiga

s

TM

K

Sis

tem

a H

als

Che

lyab

insk

Sev

erst

al

Feb-06 Mar-06

Apr-06 May-06

Jul-06 Oct-06 Nov-06

Russian Company

Other International Company

November 2006 9

Source: London Stock Exchange - July 2006

DR trading on IOB

In 2005, IOB total trading turnover was $131bn and in the first 7 months of 2006 that number increased to $172bn.

Trading of DRs on International Order Book (2001 - 7 MNTHS 2006)

-

20

40

60

80

100

120

140

160

180

200

2001 2002 2003 2004 2005 7MNTHS2006

Tra

de v

alu

e $ b

illion

0

100

200

300

400

500

600

Tra

des

'000

Turnover $

Trades

November 2006 10

Top 10 companies traded on IOB

Source: London Stock Exchange trade statistics

CIS IOB trade value reached 73% of all IOB trade this October, a new record high.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Lukoil Gazprom Orascom Samsung

Rosneft Novatek OTP BANK Lotte Evraz

Magyar

Tra

de

Va

lue

($

mn

)

0

20

40

60

80

100

120

140

160

180

Tra

de

s (th

ou

sa

nd

s)

Total Trade Value

Total Trades

Jan-Oct 2006

November 2006 11

• Why London?– Reasons for listing – Managed assets– Main Market or AIM?

• Main Market– International listings comparison– Seasonality– DR trading on the IOB– Top 10 companies traded on the IOB

• AIM– Capital raised– AIM growth – Total AIM IPOs – Access to capital – Cost structure

• How to find us?– Russian website– Contact details

AGENDA

November 2006 12

2006 – A Record Year for Capital Raised on AIM*

Source: London Stock Exchange, November 2006, *Includes further capital raises

Total Money Raised ($m)

-

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 30-Oct-06

$16,997

$19,406

The success of AIM continues to grow and so does its investor base.

November 2006 13

371

269

519

833 841

162

Max Petroleum Urals Energy Raven Russia

Market Cap at Admission ($,m)

Market Cap Today ($,m)

11 M

onth

s

13 M

onth

s

14 M

onth

s

AIM supports growing companies

AIM growth - 2006

November 2006 14

Source: London Stock Exchange, November 2006

7

22

44

26

31

21

17 19

12

22

$20

$69$73 $73

$43

$62

$33

$44

$76

$24

0

5

10

15

20

25

30

35

40

45

50

Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06

Nu

mb

er

of

Co

mp

an

ies

0

10

20

30

40

50

60

70

80

Av

g R

ais

e (

$m

n)

Number ofCompanies

Avg Raise($m)

2006 has been a successful year for AIM with over $12bn raised at IPO this year alone.

Total AIM IPOs - 2006

November 2006 15

Money Raised on AIM ($,m)*

1,200

2,784

IPO $ Raised Further $ Raised

Source: London Stock Exchange, August 2006

Access to further capital

AIM listing gives companies access to raise further capital after IPO.

November 2006 16

Prospectus Preparation

Underwriting & analytical coverage

Broker

NOMAD

Company

Short -form report

TechnologyExperts

Reporting Accountants

Legal reports and negotiations

Law Firm(NOMAD’s)

Law Firm(Corporate)

Public Relations and Investor Relations

Listing and trading Services

Stock Exchange: AIM

RegistrarPR firms

IndependentResearchersLHC

3 - 5% of the deal, plus1% of the firm

£150K- £300K,Of which NOMAD’sLawyers get 25%- 40%

£100K- £150K

£25K- £50K£10K

£150K- £200K plus1% of the firm

CREST Co

Source: Oxford Said Business School MBA Project, August 2006 as amended by London Stock Exchange

Cost structure for AIM listing

The total cost of raising £50mn ranges between £2.5 - £5mn (5%-10% cost range) excluding value of options.

November 2006 17

• Why London?– Reasons for listing – Managed assets– Main Market or AIM?

• Main Market– International listings comparison– Seasonality– DR trading on the IOB– Top 10 companies traded on the IOB– 30/70 Rule - Rosneft

• AIM– Capital raised– AIM growth – Total AIM IPOs – Access to capital – Cost structure

• How to find us?– Russian website– Contact details

AGENDA

November 2006 18

Russian website

www.londonstockexchange.com/ru

November 2006 19

Jon EdwardsSenior Manager, CIS+44 (0) 20 7797 [email protected]

Zarina KorolovaManager, CIS +44 (0) 20 7797 [email protected]

WWW.LONDONSTOCKEXCHANGE.COM/RU

Contact Details