ABOUT FINAM: Company News

Apr 22. Finam wins the Best Investment Company of the Year award.

Finam Investment Company received a prize as part of the Financial Elite of Russia award. The jury named Finam the Best Company of the Year in the category "Stock Market".

Based on the 2007 performance, Finam became No. 1 brokerage in Russia, with its aggregate securities turnover topping RUB 7 tn. The investment company formed the biggest regional network in the sector, covering 90 Russian cities. The company's growth rate, the focus on promotion of new services, the quality of services and activities to draw attention of ordinary people to stock market instruments were appreciated by experts, which led to the prestigious award.

Finam was awarded the Financial Elite of Russia award for the third time. In 2006 the investment company got the prize as the most client-driven investment company and Finam Investment Bank was named the "Discovery of the Year" in 2007.

The Financial Elite of Russia award was provided for the first time in 2005. The award presents the opinions of leading Russian economists and finance professionals and representatives of the relevant media. This program is carried out on the basis of expert and advisory support from the Russian Audit Chamber, the Russian Finance Ministry, the Central Bank of Russia, the Association of Regional Banks of Russia, the National League of Managers, Rosleasing, ACI Russia, rating agency Expert RA and the National Rating Agency.

Apr 3. Arsen Aivazov is appointed director of Finam Investment Holding's international brokerage department.

An international brokerage department was formed within Finam Investment Holding. The new division will focus on providing domestic investors with access to foreign trading floors and also the FX market. Furthermore, it will sell Russian financial products to Western investors. Arsen Aivazov, who earlier headed up Finam Investment Company's front office, was appointed director of the new department.

Arsen Aivazov was born in 1971. He graduated from the Moscow Humanities University with the degree of economist and studied German at the Goethe-Institut in Berlin. He holds qualification certificates (1.0, 5.0 and 4.0) issued by the Federal Securities Service. Before joining Finam he worked as head of the custody department at investment company Olma, deputy head of the customer service department at Vika and head of the client service department at Dialog-Optim. In June 2005 he held the position of front office director at Finam.

The formation of the new business unit was driven by the intensive promotion of Finam's services relating to access to international financial markets. At issue are both the forex market and foreign exchanges. Currently, Finam's clients can execute transactions on all main trading floors in America and Europe. In addition, the department will be in charge of dealing with foreign investors who are interested in sinking funds into Russian assets. At the end of 2007 Finam announced the launch of brokerage services for Japanese clients. Japan's investment company Aruji Gate Securities Inc acts as the company's partner. The short-term plan is to break onto the German market.

The international brokerage department will not be only involved in client services, but also in working out new services for them. Specifically, it will oversee the development of special versions of trading platforms to meet investor needs, offerf training courses (in cooperation with Training Center Finam), prepare market research reports and establish deeper relations with foreign stock exchanges.

"Favorable market conditions have arisen, which allow Russian investment companies to move towards a new quality plateau. On the one hand, greater expertise of Russian investors is raising their interest in operations on global markets. On the other hand, Russian financial instruments remain attractive to foreigners. By streamlining its international operations, rolling out new services and widening the list of its foreign partners, Finam is looking to turn into a global broker" – Aivazov noted.

PR and Media Service, Finam Investment Holding

Apr 3. Finam Management sums up 1Q 2008 performance of close-ended mutual funds.

Management company Finam Management, which is part of Finam Investment Holding, hereby announces the results achieved in managing close-ended mutual funds in March and the first quarter of 2008. During this period, close-ended mutual funds delivered improvements in NAV and fund unit figures. In the face of a falling market these funds turned out to be efficient capital saving instruments.

The highest returns in March were achieved by real estate mutual fund Finam – Capital Investments, whose NAV and fund units spiked 6.54% in March, up 7.7% in the quarter and 24.2% over the past six months. At the same time, in the January-March quarter the RTS Index declined 10% and since last September it has corrected down roughly 1%. The value of Finam – Capital Investments fund units grew primarily following a spike in the value of the assets it owns, specifically, agricultural lands in Russia's southern regions.

"The slump on the Russian equity market is mainly driven by conditions on external markets. Land assets are exposed to these conditions to a certain extent. They represent a stable and strong instrument growing in value against the backdrop of rising demand for food in Russia and worldwide. What's more, agricultural lands generate profits from lease of around 15-20%" – director of Finam Management's real estate department Alexey Garyunov said.

Venture investments fund Finam – Information Technologies reported a 3.82% increase in the value of fund units and NAV in March. In the first quarter of 2008 its fund units returned 3.72%. "Currently, Finam – Information Technologies assets are valued quite conservatively. Given the expansion of Russia's Internet business and rising earnings of the companies in which the close-ended mutual fund holds shares and stakes, we expect fund units rise sharply by the end of the year, providing investors with handsome returns on their capital" – general director of Finam Management Andrey Shulga said.

In his opinion, in terms of investment appeal close-ended mutual funds are approaching open-ended mutual funds as their fund units trade on exchanges. Specifically, Finam Investment Holding is carrying out a program aimed at maintaining the liquidity of its mutual funds on MICEX. Investors holding their fund units can sell at any time these assets at a price close to that determined by the management company.


PR and Media Service, Finam Investment Holding

Feb 21. Finam Investment Company appoints Dan Rapoport as managing director.

Dan Rapoport has been appointed managing director of Finam Investment Company. Earlier he held a similar position at CenterInvest Securities. At Finam Rapoport will head up a division to deal with Russian and international institutional investors.

Finam's new managing director will form a division during the next few months that will conduct activities within the Investment Division. It will focus on dealing with second-tiers and greenfield stocks and rolling out brokerage services targeting international and Russian institutional clients. The new division's backbone will be a team of stock analysts, traders and sales managers that will begin to work in mid-March. At issue are professionals who previously worked with Rapoport, more precisely, at CenterInvest Securities.

"Dan Rapoport is a recognized professional in the Russian investment business. For a long time Finam has expanded as a company mostly geared towards private investors. Hopefully Dan and his team will help us bolster our position in this segment, which is a relatively new niche for us, and become serious rivals for the present leaders" – head of Finam's Investment Division Dmitry Serebrennikov noted.

"My move to Finam was to a large extent driven by the fact that the company's business approach is close to my own. The company exhibits dynamic growth, is fast in decision-making and accumulates resources needed to bring its decisions to fruition. I'm confident that our mutual efforts will be highly effective " – Rapoport noted.


Public and Media Service, Finam Investment Holding

Jan 31. Finam Management to launch three new mutual funds.

On February 1, 2008 management company Finam Management, part of Finam Investment Holding, is to launch three new mutual funds: Finam Oil&Gas, Finam Power Utilities and Finam Metals. These mutual funds will be sector-focused, broadening the range of products offered by the management company to investors.

The formation of the new funds is scheduled for completion on April 30 or earlier when the assets of each fund equal RUB 10 mn. These mutual funds target the largest possible group of investors. RUB 3,000 is enough to become a unit holder. At a later time the minimum amount for investors who already purchased fund units of respective funds will be reduced to RUB 1,000.

ntends to invest client resources primarily in common and preferred shares of Russian businesses that engage in oil and gas extraction, processing and transportation activities. It is expected to add to the fund's portfolio not only blue chips, but also the most promising second-tiers, i.e. shares in petrochemical concerns.

Open-ended mutual fund Finam Metals will be parking investors' cash mainly into the securities of companies that extract and process ferrous and non-ferrous metals, coal, produce steel and also manufacturing equipment, automobiles, aircraft, etc. Thus, the fund will be able to pursue quite a flexible strategy, investing only in metal stocks when market conditions deteriorate and picking up engineering shares when metal product prices are in decline.

Finam Power Utilities is to target securities of Russian concerns that generate, transmit, distribute and sell electric and thermal power. Among the most attractive stocks of the sector that are to be added to the portfolio of Finam's new mutual fund are assets that represent the thermal power generation sector, whose performance is to a large extent related to the keen interest of strategic investors in the relevant companies and also distribution grids.

Representatives of Finam Management believe that sector-focused mutual funds will be of interest to investors both in and of themselves and as an instrument to diversify their investment portfolios. Specialized funds make it possible to invest funds in one industry or another as a whole, which lowers the risk of losses when one or several stocks of a relevant sector are picked. Investors will also have the opportunity to convert free of charge fund units of the new funds, including by means of a special online service.

"By launching sector-focused mutual funds we'll bring the total number of our mutual funds to 11, with 8 of them classifiable as open-ended. This means that the mix of the investment products offered by Finam Management will be able to meet demands of virtually any investor. All innovations made by Finam's analysts will be used when forming the new funds, which gives reason to expect dynamic growth in the value of fund units" – Finam Management's executive director Andrey Shulga says.

Public and Media Service, Finam Investment Holding

Finam Investment Company has become the first Russian company to provide Japanese investors with online trading solutions on the Russian market. Aruji Gate Securities Inc. acts as Finam’s partner in Japan. At present, Japanese investors can execute transactions on MICEX Stock Exchange using a special version of Finam Web-Trade online trading system.

The project to roll out online trading in Russian stocks kicked off in Japan on January 17 when the first deal was struck to acquire Gazprom shares using the Japanese version of Finam Web-Trade. Finam’s entry into the Japanese market opens a wealth of new opportunities for Russian issuers whose shares are now available to the widest group of investors from Japan, the world’s second largest economy.

Japanese brokerage company Aruji Gate Securities Inc. is a subsidiary of Aruji Group. The core activity conducted by Aruji Gate is to provide brokerage services to Japanese investors who trade on the Russian securities market.
Finam Web-Trade is an advanced online trading platform that makes it possible to execute transactions without installing special software products from any PC with Internet connection. Apart from stock trading the system allows users to check their trading accounts and place stop-loss orders. The system was translated into Japanese for Japanese investors.

Investing activities on the Japanese stock market is part of Finam’s global strategy geared towards breaking onto international capital markets. In Japan, Finam tested for the first time a new procedure for dealing with foreign partners that focuses on online trading in Russian securities, both blue chips and second-tier names. Longer term, the plan is to offer this service in other countries.

Finam’s strategic target is to form a pool of foreign investors, roll out and maintain mutually beneficial relations with Western investment banks and implement joint corporate finance projects. Finam has established quite an interesting asset portfolio that could be of interest to foreign investors.

“This trading system is one of a kind: no direct access to the Russian securities market has ever been available in Japan. As a matter of fact, we have created a unique trading platform on the Japanese market. We’ve gained a reliable partner in Arugi Group on the Japanese brokerage market and will strive to promote our services. Currently, under discussion is the further implementation of cooperation projects, namely asset and management consulting and also the sale of fund units in the mutual funds run by Finam Management, which will make us No. 1 broker among Japanese investors” – says head of Finam Investment Company’s Foreign Investor Relations Department Grigory Yudashkin.

Public and Media Relations Department, Finam Investment Company
Vladislav Kochetkov (Kochetkov@finam.ru).
Telephone: +7 (495) 969 59 58.

Finam – Information Technologies invests cash in global social networking portal Badoo.com.

Management company Finam Management has bought a 99.99% interest in Garant Service. This asset was included in the portfolio formed as part of close-ended mutual fund of risky (venture) investments Finam – Information Technologies (RTS Board: finmit). Thanks to this acquisition the mutual fund gained around 10% of UK-registered Badoo Limited that owns global social networking website Badoo.com. The transaction price equaled RUB 750 mn.

Badoo.com is a multi-lingual global networking website that offers its users the ability to connect with other users, create photo albums, and search for other people in the system, to name but a few. The project was launched in November 2006 in London and it has already achieved leadership positions in Europe and some Latin American countries. The site already has over 12 mn registered users.

The purchase of a stake in this social networking portal by Finam – Information Technologies was the first step towards promoting this project on the Russian market. The Russian section of Badoo.com will launch operations in the weeks to come. Its objective is to reach leadership positions among Russia-based portals where the social networking segment has achieved the fastest growth. Based on Finam's estimates, registered users within Russian social networking websites soared 5-fold in 2007 and rapid growth is also expected to continue this year.

Public and Media Relations Department, Finam Investment Holding

Finam sums up 2007 asset management performance.

Finam Investment Holding has tallied the results of its asset management activities carried out in 2007. During the year, average returns under all strategies promoted by the investment holding turned out to be positive. Record gains were achieved by the portfolios with a high portion of second-tier names.

The leader was the Long-Term Growth strategy, as the average value of the portfolios based on it during the year spiked 26.72% and 66% over the past two years. This strategy calls for investing 100% of funds in second-tier names. "The high risk attached to small and mid-cap companies is offset by potentially higher returns. We are of the opinion that in the mid-term outlook these issuers hold stronger upside market cap growth potential than major corporations. We expect this strategy to return 86% in 2008" – Finam Investment Holding strategist Vladimir Sergiyevsky says.

The aggressive strategy, according to which 67% of cash was invested in both liquid and second-tier stocks, achieved an average return of 19.92% in 2007. Over the past two years the portfolios formed as part of this approach have generated the highest profits, up a whopping 81.29%. "We have revised the risks of investing in stock segments on the basis of the results of our activities to run our client's assets. Specifically, the aggressive portfolio was adjusted, with the weighting of bonds increased 2%. In spite of this, expected returns of the aggressive portfolio are projected at 49% in 2008" – Sergiyevsky notes.

Profits earned by investors in line with the balanced strategy averaged 10.98% in 2007 and they were substantially higher over a two-year horizon (64.27%). The balanced approach towards investments calls for investing most cash (58%) in bonds, with the remaining portion of the portfolio equally allocated between blue chips and second-tier stocks. The conservative strategy that focuses on bonds (76%) pushed up the value of investors' portfolios by 11.63% in 2007 and with 2-year gains reaching 49.61%.

"We are of the opinion that in light of the growing risks associated with a global economic slowdown this year financial resources will be redirected into stocks of food producers and sellers, pharmaceutical and precious metal companies. As for soft commodities, we believe grain will remain in demand. People who invest in the related industries, especially fertilizer manufacturers, will also benefit. Among the most appealing investment vehicles in 2008 we would like to highlight the shares of grain and sugar holding Razgulay, Russia's leading juice producer Lebedyansky, retail chain Magnit, nitrogen and phosphorous fertilizer producers Kuybyshevazot and Ammophos as well as Russia's number one silver maker Polymetal. Up to 27% of our model portfolios falls to the securities of these businesses" – Sergiyevsky says.


Public and Media Relations Department, Finam Investment Holding

Management company Finam Management, which is part of Finam Investment Holding, has tallied the results of its December 2007 performance related to the management of mutual funds. All open-ended mutual funds managed by the company generated profits in December 2007. Record returns were generated by the funds that pursue aggressive strategies (Finam MICEX Index and Finam Narodny).

Specifically, index fund Finam MICEX Index reported a 2.59% increase in the value of its fund units, while net assets rose 4.61%. Finam Narodny, whose asset portfolio is defined by unitholders themselves, again outperformed the market, with its fund units gaining 2.9% in value and net assets surging 11.16%.

Hefty returns were generated by another mutual fund (interval fund Finam Low-Liquidity Stocks) that operates using the aggressive strategy. Profits earned by its sharers equaled 3.05% and similar growth was recorded in net asset value. The next interval of this mutual fund will be opened on February 10, 2008.

Finam Management’s conservative funds also delivered growth in fund unit value and net assets. For example, Finam Bonds sharers earned 0.97% in December, while profits of the investors who entrusted their money to Finam Deposit (a money market fund) were as modest as 0.49%. The net asset value of these funds climbed 15.43% and 36.81%, respectively.

Finam First, which pursues a balanced strategy, reported 1.07% monthly returns to its unitholders, whereas its net asset value dropped 2.62%. This is attributable to the fact that ahead of the New Year holidays, that traditionally leads to uncertainty among Russian investors, many of them decided to park their cash in conservative funds.

The leader among close-ended mutual funds that Finam Management formed was real estate fund Finam – Capital Investments, with its fund units gaining 7.56% in December. The fund unit value at close-ended mutual fund Finam – Information Technologies remained virtually unchanged (down 0.17%).

“Against the backdrop of upbeat trends on the stock market our funds returned solid profits. I think that we’ll be able to shore up similar gains this year. A shakeup among our team of asset managers in the second half of 2007 has already yielded results. In addition, it’s noteworthy that our clients have the opportunity to increase their profits by converting their fund units without charging any fees, including on an online basis. This year we intend to take further steps to make new options available and also make efforts to broaden the range of our mutual funds” – Finam Management’s executive director Andrey Shulga noted.

Public and Media Relations Department, Finam Investment Holding

Management company Finam Management, part of Finam Investment Holding, has summed up the results of its asset management activities within mutual funds in September-November 2007. During the period all the mutual funds formed by the management company generated returns. Mutual funds with aggressive strategies earned the highest profits among open-end mutual funds.

For example, the highest increase in the value of fund units (+10.6%) was achieved by benchmark fund Finam MICEX index, with Finam First in second place with 6.21% gains in September-November 2007. Moreover, interval mutual fund Finam Low Liquidity Stocks managed to increase the value of its units by 4.22%. "Although, the performances of RTS and RTS-2 indexes were comparable in autumn months, nonetheless liquid names saw the most positive developments which allowed blue-chip aggressive funds to rack up handsome gains" – Finam Investment Holding's strategist Simon Birg explained such development.

In the September-November period Finam Narodny saw the value of its fund units rise 1.79%. For the record, the investment strategy and the structure of this mutual fund's portfolio are determined by unit holders themselves using a specially developed online mechanism. Over the past six months the fund's investors have increased the fund unit value by 5.35%. "On the whole, our pilot mutual fund proved to be a success. Looking at the returns earned by all mutual funds Finam Narodny can be ranked as a firm fund in the middle of the list and, as it also provides training options, investors derive from its fund units additional benefits, tapping knowledge and market experience" – believes management company Finam Management's managing director Sergey Khestanov.

The unrivalled leader among all the mutual funds run by Finam Management is close-end real estate mutual fund Finam – Capital Investments, with its fund units surging 26.24% in September-November. This became possible after the assets that make up the fund gained in value. The plan is to offer investors to buy additional units of this fund in the near future. Proceeds from the additional fund issue will be spent on buying new agricultural lands in Russia's southern regions and also funding some real estate development projects.

Finam's conservative funds also finished autumn with gains: Finam Deposit earned 0.27% in September-November, Finam Bonds gained 1.76%, while fund units of venture fund Finam – Information Technologies jumped 1.04%.

"The figures achieved this autumn confirm that amid instability on the market our mutual funds generate profits. I think that their unit holders will be able to achieve their investment targets as of January 1, 2008, retaining capital notwithstanding galloping inflation and increasing their savings" – Khestanov said.

PR Department, Finam Investment Holding

Finam is going to offer QUIK trading platform to foreign investors.

For the first time on the Russian stock market Finam Investment Company has announced the launch of the English version of the full-fledged online trading platform WEBQUIK, developed by SMVB-IT. The new product primarily targets foreign clients of the investment company who execute transactions on the Russian equity market.

All options provided to a standard QUIK workplace (desktop clients) are available in the new version of the trading system. Specifically, QUIK users are able to execute transactions on MICEX, RTS and Saint Petersburg stock exchanges, have access to news wires, research support, et cetera. In addition, Finam clients have the opportunity to use WEBQUIK to deal online on foreign exchanges.

Finam has become the first Russian brokerage, offering its clients the English version of WEBQUIK trading platform. It will be available to all the company's clients, although it is mainly designated for foreign investors who are interested in investing money in Russian stocks. There have been impressive growth rates in this category of investors (at least 100% a year), but until now it had no access to advanced technical solutions for independent investing.

"We view non-resident investors as a fairly promising audience. At issue are not only institutional, but also private investors whose activities have been quite intensive over the past few months. It seems to us that offering the easy-to-use, multi-option and, what's most important, comprehensive trading system is an important step forward in this segment. I am confident that the updated version of WEBQUIK software will find demand among investors and contribute to boosting the company's clientele" – Finam Investment Company's first deputy general director Igor Stepanyan thinks.

PR Department, Finam Investment Holding

Finam picks up Emi Trust.

Finam Investment Holding has wrapped up the acquisition of financial group Emi Trust. Taking over this company Finam has taken another step in rolling out its brokerage business, increasing its client base and raising its headcount.

The process is currently under way to place Emi Trust’s clientele (around 1,000 individuals and legal entities) on the list of clients serviced by Finam Investment Holding’s structures. This procedure will be finalized in late October 2007. The bulk of the investment holding’s clients consume brokerage services, while some of them are signed up for asset management and advisory management services.

The Board of Directors at MICEX Stock Exchange has approved the new lineup of its Exchange Committee. The new committee consists of nine members (representatives of the investment community, issuers and scientific societies), including director of the Hi-Tech Investments Center and aide to Finam Investment Holding’s general director Elina Yurina.

The Exchange Committee is a consultative and advisory body of MICEX that works out proposals to amend the exchange’s internal documents and can also issue recommendations to improve the exchange’s services relative to trading operations on the stock and futures market. In addition, the committee addresses issues concerning requirements for the professional preparation of MICEX players (traders), the circulation of futures and options on MICEX Stock Exchange and also research involving topical issues of the stock and futures markets.

“The entry into the Exchange Committee of Russia’s largest exchange is a great honor for us. We maintain close cooperation ties with MICEX in various areas and we hope to see our partnership solidify. Specifically, at issue is the sector of innovative and growth companies where equity units of the Finam – Information Technologies mutual fund are offered. We plan to become one of the leading placement arrangers on this platform, intensive work is in progress with a number of issuers and new services for such companies are being worked out” – Yurina says.

Deputy to MICEX Stock Exchange’s general director Gennady Margolit said that “MICEX’s target is to roll out the Russian stock market and the Exchange Committee is composed of representatives from companies and institutions that play a great role in this process. Finam not only ranks among the country’s leading brokerages, but also continuously comes up with ideas that aim to make Russian people more experienced in financial services and attract new issuers to the equity market. We have ample room for cooperation in these segments and it will be more productive hand in hand with efforts taken by the Exchange Committee”.

PR Department, Finam Investment Holding

Finam Investment Holding acquires a minority stake in Alawar Entertainment, Inc.

Finam Investment Holding, one of the largest investment firms in the Russian Federation, has acquired a minority stake in Alawar Entertainment, Inc., a global leader in the fast-growing market of casual games. During negotiations, the law firm of Femida.us and financial advisor ValueTech Advisers represented Alawar. The funds Alawar has received through the deal will be used to acquire core assets.

In 2006, the worldwide casual games market reached $950 million in annual revenue. According to DFC Intelligence, the North American segment of the market will take in an estimated $690 million in sales by 2008, with global revenue topping $1.5 billion. In Russia, the casual games space began rapid development three years ago. In 2006, sales reached $1.5 million; in 2007, experts predict the market could hit the $10 million mark, with an annual growth of 200-300% after that.

Alawar plans to become one of the top five casual game publishers worldwide in the near future. To achieve this goal, the company intends to acquire additional core assets. During the last 12 months, for example, Alawar added two external casual game developers, now Alawar DreamDale and Alawar Stargaze, to its portfolio. The proceeds of the investment will be used to acquire core assets (including outside development studios), create high-quality casual games, improve casual content distribution technologies and implement in-game advertisements into Alawar's titles.

"Alawar's joining forces with Finam gives us both the additional financial resources and a trustworthy partner that holds a major position in the Russian segment of the Internet," said Alexander Lyskovsky, Alawar's CEO. "The synergy of the two companies will not only help Alawar to preserve our leadership in the casual games niche but also strengthen our position in the Eastern European market enabling us to keep up even with the most explosive growth of such market. In addition, this one-of-a-kind transaction shows how the casual games market has finally found the recognition it deserves in the financial circles. We are only in the beginning of the substantial consolidation and growth of the industry."

"Professional management, effective strategies and a top notch development team enable Alawar to maintain its leadership in Eastern Europe and uphold its status as one of the top casual game companies worldwide," said Alex Basov, director of investments in Finam's IT department and a member of the board of directors "While Finam's participation certainly strengthen the company's position, we would certainly welcome further strategic partnerships and alliances furthering our goals of implementing Alawar's most aggressive plans."

PR and Mass Media department of Finam		PR and Mass Media department of Alawar Entertainment, Inc.
Vladislav Kochetkov (Kochetkov@finam.ru). Phone: (495) 969-59-58.		Tatiana Chernova (pr@alawargroup.com) Phone: + 7 913 905 55 43 David Laprad (david@alawar.com) Phone: (615) 785-7472

About Alawar Entertainment, Inc.
http://www.alawargroup.com

Alawar Entertainment specializes in the development, publication and distribution of casual games since 1999. The company has published more than 150 titles, won fans all over the world and is the biggest provider of casual games in Eastern Europe. Today, Alawar works with more than 30 developers, providing a full range of services that includes producing, distributing and marketing for developers' games. Alawar also distributes its own games via its broad network of Web sites. The company's releases have also found a home on the Web sites of other numerous online distributors. In addition to distributing games online, Alawar works with CD publishers in more than 20 countries. In 2006, Alawar significantly increased its presence in Eastern Europe and reaches a dominant 65% share of the casual games market.

About Finam Investment Holding

Finam Investment Holding is a leader on Russia's financial services market, offering a broad array of investment services and conducting operations in more than 80 cities around the country. Finam ranks among the top domestic investors in IT projects, controls Mamba, E-generator, MoneyMail and other concerns, and holds minority stakes in Begun, Buka, Alawar, Ashmanov and Partners, Astrostar, to name but a few. The holding established the first Russian mutual fund that specializes in high-tech investments – Finam – Information Technologies (MICEX, Security ID: RU000A0JNUN9).

Finam appoints international projects director

Vladislav Krivonosov has been appointed director for international projects at the Investment Division (corporate finance and asset management) at Finam Investment Holding. In this capacity he will oversee relations with foreign investment banks, including the establishment of strategic partnership ties.

Vladislav Sergeyevich Krivonosov was born in 1977, graduated from the Finance Academy attached to the Russian government, majoring in credit and finance. Before joining Finam Krivonosov was employed as vice president of the Division for International Business Development at financial corporation Uralsib, he also worked in the capacity of the deputy head of the financial institutions department at Nomos-Bank and senior specialist of the Exchange Technologies Department at MICEX's FX section.

Currently, Finam is looking for strategic partners among Western investment banks that deal with mid-cap companies. At present, such structures have virtually no presence on the Russian market nor play any significant role in the Russian corporate finance segment. Teaming up with Finam these players will be able to minimize the risks associated with the entry to the Russian equity market. The investment holding's sizeable client base and perfect knowledge of the market will enable foreign partners to cut market-entry costs, more efficiently pick attractive securities for their investment portfolios and broaden their customer bases.
Speaking about Finam, with the help of Western investment banks the holding will expand its base of customers willing to buy into domestic mid-cap stocks (including hi-tech assets). The investment holding is poised to solidify its positions in the segment of private placements and IPOs of such mid-cap issuers, including via cooperation with Western partners. Apart from IPOs, the holding intends to actively cooperate with them to arrange M&A transactions, including MBO and LBO deals.
"I see my primary target as forming a pool of strategic foreign partners, rolling out and maintaining mutually beneficial relations with Western investment banks and executing joint corporate finance projects. To date, Finam has formed a fairly interesting portfolio of projects that may be of interest to foreign investors. Moreover, we expect to strengthen our positions on overseas markets and we therefore need to bolster our relations with relevant market players" – Krivonosov says.

May 3. Finam receives Financial Olympia and Financial Elite of Russia awards.

In late April Finam Investment Company was named the laureate of the professional award "Financial Olympia 2006" based on the results of the National Financial Rating. RBC Group, the sponsor, named Finam the winner in the "Largest Investment Company in M&A Deals" (Potential and Perspective) category. Thus, assessment was made to the achievements by Finam's corporate finance department which provides legal entities with access to new development options: M&As, LBO and MBO transactions, attraction of investments from direct investment funds, private and public stock offerings.

The Financial Olympia award is granted annually to financial market participants: commercial banks, insurance, investment, management companies and non-state pension funds covered by the National Financial Rating. The Financial Olympia award is granted to market participants upon results of objective and mathematic ratings and expert estimates.

Moreover, Bank Finam received the Financial Elite of Russia – 2007 award in the category "Bank – Discovery of the Year". The victory in this particular category is a logical consequence of the bank's remodeling which kicked off from its renaming (until 2006 the bank operated as Megawatt Bank). In 2006 active introduction of new investment products got under way which is currently a strategic area of business for the bank. The bank worked out and offered its clients an absolutely new mix of deposits and credits and investment deposits for management company Finam Management's sharers. These products are designed for investment activities and therefore they are primarily interesting for the investment company's clients and people who intend to profitably invest their capital. Integration of services worked out and designed by the investment company, the bank and the management company into unified investment products is in full swing. For this particular reason they put Finam apart from ordinary online brokers. In addition, in December 2006 Investment Bank Finam launched trading on the global FX market. Meanwhile, the bank was the first in Russia to help clients execute deals on the international market. In its activities Bank Finam focuses on advanced innovative technologies, the individual customer approach, competitive tariffs and the convenient and simple account opening procedure.

The Financial Elite of Russia prize is awarded with expert and consulting support from the Russian Audit Chamber, the Russian Finance Ministry, the Central Bank of Russia, the Association of the Regional Banks of Russia, the National League of Managers, rating agency Expert RA and the National Rating Agency. The prize's steering committee consists of chairman of the State Duma's Lending Institutions and Financial Markets Committee Anatoly Aksakov, director of the Russian Finance Ministry's Financial Policy Department Alexey Savatyugin, vice president of the Russian Union of Industrialists and Entrepreneurs Alexander Murychev, president of the National League of Managers Andrey Podoynitsin, general director of the National Rating Agency Victor Chetverikov and other outstanding financial professionals.

PR Department of Finam Investment Company

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

Finam executes transaction on Sistema's acquisition of UralElectro.

On Monday, March 27, 2006, RTI Systems Concern, affiliated with AFK Sistema, reported in a statement that it acquired a 50%+1 share stake in UralElectro and 100% in UralElectro-K.

UralElectro is a leading electrotechnical company, a major producer of asynchronous electric motors used for general industry purposes and export series in Russia, a supplier of engines and components for production of low voltage equipment, contactors and starters.

UralElectro-K is a trading company specialized in the market of electrical products, electrical machines and units.

The consolidated turnover of the acquired companies stood at Rub 550 mln ($19.6 mln) in 2005.

Finam acted as the adviser and agent representing the shareholders of UralElectro and UralElectro-K. The transaction amount was not disclosed.

Sistema's new subsidiaries will allow the Concern, which traditionally integrates Russian leading research-and-production companies, to strengthen its firm positions on the high-tech market. The Concern plans to develop the acquired companies.

Supporting M&A transactions is one of the top priorities for Finam, Head of Finam's Investment Division Dmitry Serebrennikov said. He noted that Finam has vast experience in such projects working both on the part of a seller and a buyer, conducting asset valuation and searching for takeover targets. Serebrennikov pointed out that Finam intends to announce a number of other large transactions performed with its assistance.

Svetlana Likhodkina is among Top-200 Businesswomen in Russia.

Kariera magazine published its traditional rating "Top 200 Businesswomen in Russia". Experts gauged the leading managers of Russian largest companies. The main criteria of the rating were business standing, ability to organize a team, to generate new ideas, and to respond proactively to changes in the market situation.

Svetlana Likhodkina, general director of Finam Management Company, was ranked among the leaders of the 2005 rating. She left behind her peers from Soyuz bank, Surgutneftegazbank, PioGlobal Asset Management, UralSib, Renaissance Broker, Raiffeisen Capital and other leaders of the domestic investment business sector.

Likhodkina's participation in this rating can be viewed as experts' recognition of the successful performance of Finam Management, which has achieved rapid growth both in the sphere of mutual funds profitability and pension savings management, as well as a net asset value accretion plan.

Finam analysts hold meeting with Kellogg School of Management.

On March 16, 2006, analysts of Finam Investment Bank held a meeting with representatives of one of the leading business-schools in the world - Kellogg School of Management. Students and professors of Executive MBA course visited Moscow as part of their course devoted to management in developing countries, including Russia. One of objectives of their visit was to gather data for a research report devoted to Russian beer market trends.

A student of Executive MBA course of Kellogg School of Management Ashlee Hartman said after the meeting that they previously studied all materials on this issue, statistic data and surveys of sell-side analysts. Hartman noted that they were impressed by Finam's research materials posted on www.finamrus.com and contacted the company's representatives to organize a meeting. The student said that this meeting was very informative, and their research report will include forecasts of analysts who have a clear understanding of the market situation and trends.

Finam is recognized as one of Russia’s most steadily developing companies.

The Economic News Agency (ENA) has compiled a rating of the most actively and steadily developing companies and banks in 9M05. Finam Investment Company was ranked among leaders in the category "Financial, Investment and Venture Companies".

Experts of ENA, the Russian Chamber of Industry and Commerce, the Russian Banks Association, the All-Russian Insurance Association (ARIA), the National Association of 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, ENA experts noted.

Finam recaps February asset management.

Finam Investment Holding has tallied the performance of its asset management in February 2006. Both individual trust management accounts and collective investment accounts generated positive returns. The best results were achieved by Finam First mutual fund (17.75%) in terms of equity accretion.

Two other mutual funds run by Finam Management reported more than 10% returns, namely, Finam Low Liquidity Stocks (11.95%) and Finam MICEX Index (13.2%). Finam Bonds gained just 0.19% in terms of equity accretion.

At the same time, all mutual funds of Finam increased their net asset value (NAV). The best showing in NAV was reported by Finam MICEX Index (+69.48%) and Finam First (+47.79%). In February the trend towards increasing number of shareholders investing in Finam's mutual funds continued, Finam's adviser for the Collective Investments Department Kirichenko Pavel said. He noted that stable growth in the number of shareholders has been observed for the last several months. Kirichenko pointed out that strong performance in February could propel this trend forward in March.

Moreover, Finam Management Company, owned by Finam Investment Holding, announced that it has completed the formation of a closed mutual fund for venture investments Finam-Information Technologies (Finam-IT). The fund's asset value amounts to Rub 175 mln ($6.22 mln). At present these assets are allocated for acquisition of interests and stakes in charter capitals of domestic hi-tech companies. Moreover, at present Finam Management is in the process of forming another closed mutual fund Finam Land. The main investment objects of this mutual fund are expected to be farmlands in southern areas of Russia.

As for Finam's individual asset management, average returns for a month totaled 2.2% for the conservative strategy, 5% for the balanced strategy and 8.6% for the aggressive strategy.

PR and Media Department, Finam Investment Holding

Finam ranked second for MICEX turnover in February.

Today MICEX published a list of the most active stock market operators in February 2006. Finam's trading volumes totaled Rub 109.004 bln ($3.88 bln). The company has retained its position in the TOP-3 of Russia's leading investment companies operating on the stock market for the last 4 months.

Finam completes formation of closed mutual fund Finam IT.

Finam Management Company, owned by Finam Investment Holding, announced that it has completed the formation of a closed mutual fund for venture investments Finam-Information Technologies (Finam-IT). The fund's asset value amounts to Rub 175 mln ($6.22 mln). In the near future these assets will be allocated for acquisition of interests and stakes in charter capitals of domestic hi-tech companies.

For the record, the formation of Finam-IT mutual fund was launched on December 27, 2005. The fund was established prior to the scheduled date (March 22, 2006), which was specified in the rules for its trust management. Finam's Head of the Collective Investments Department Pavel Kirichenko attributes this development to strong interest in this fund on the part of investors, including individuals and legal entities, as well as many established clients of the company. All of them are interested in investing in IT-assets, many of which hold strong upside potential, as our experience shows.

At present, Finam-IT mutual fund consists solely of cash funds. In the near future these funds will be invested in stakes of Internet companies, software programming companies, developers of innovation projects and other players in the IT-sector. At present, the company is in talks with the holders of these assets, some of which have already passed legal and financial expert appraisal.

After Finam-IT is formed the common shares of this closed mutual fund will be listed on the stock exchange. For the record, earlier the MICEX stock exchange committee adopted a decision to list the common shares of four mutual funds run by Finam Management, i.e. Finam First, Finam Bonds, Finam MICEX Index and Finam Low Liquidity Stocks.

Moreover, at present Finam Management is in the process of forming another closed mutual fund Finam Land, which should be established on May 5, 2006, or earlier, when its asset value amounts to Rub 15 mln ($0.53 mln).

PR and Media Department of Finam Investment Holding

The MICEX stock exchange committee adopted a decision to list common shares of four mutual funds run by Finam Management, part of Finam Investment Holding. Investors will now have the opportunity to redeem and swap their equity in the management company, execute OTC transactions with their equity holdings and perform transactions on the organized stock market.

Four mutual funds run by Finam Management obtained listing on MICEX, i.e. Finam First, Finam Bonds, Finam MICEX Index and Finam Low Liquidity Stocks, an interval fund. To get started, investors should sign a brokerage and depository agreement with the company, which is duly licensed by Russia’s FSS and listed on MICEX.

Equity in Finam First mutual fund is available for purchase and sale as of February 13, 2006. Trading in other mutual funds will also get under way in the near future. Later this year Finam intends to obtain listings for its two closed mutual funds, Finam Land and Finam IT, on the stock exchange. These funds are currently in the formation process.

Finam’s adviser for the Collective Investments Department Kirichenko Pavel said that having mutual funds listed on the stock exchange will offer a number of benefits to their shareholders, especially those who invest in the company’s interval fund. Shareholders of open mutual funds will also enjoy some additional benefits since earlier receipt of money required a shareholder to come to the management company’s office, draw up all the required documents and wait for the equity position to pay out returns. The stock exchange performs all these operations on a real-time basis. Moreover, Kirichenko noted that at present a resident of any region of Russia is eligible become a shareholder in Finam’s mutual funds.

Finam tallies its performance in January 2006.

Finam Investment Holding has tallied the performance of its asset management business in January 2006. In the segment of collective investments, the strongest returns were delivered by Finam MICEX Index mutual fund (13.02%) run by Finam Management. As for performance of the company's individual trust management, the best returns were achieved by the aggressive strategy (21.7% per month).

Today MICEX published a list of the most active stock market operators in January 2006. Finam’s trading volumes totaled Rub 67 bln ($2.38 bln). This figure allowed the investment company to take second place on the list of the most active professional participants on the stock exchange.

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.

Finam ranked among Russia's top 5 investment companies in H1 2005

This information was disclosed in the rating of leading Russian investment companies released by RBC. Finam’s aggregate trading volume in January-June totaled $4,994 mln. Thus, the investment company got a one-notch upgrade compared to the same period in 2004.

Finam Investment Company and Norum, EBRD Venture Fund focused on Russia’s North-West and West, have announced investments in the development of Buka, one of the largest players on the Russian computer games market. Investment has been made in the form of an acquisition of a stake in the charter capital of the established holding, Buka’s shareholder. The joint stake of investors in the holding will be 52.9%. Ernst&Young acted as Buka’s financial consultant. The value of the transaction is estimated at several millions of dollars.

The proceeds raised will be allocated to the company’s development, in particular, to publishing a larger number of PC game projects and increasing its share on the domestic market by expanding its distribution network.

Buka Board Chairman Igor Ustinov said, “On the one hand, our roll-out strategy focuses on improving the quality of in-house computer game projects and releasing only the best international games in Russia. On the other hand, the most important task facing us now is to expand the number of “in-house territories” that is areas where we engage in the entire publishing cycle (production, marketing and sales). Buka opened a representative office in China in 2004 and we have already made impressive inroads on the Chinese market. In the long term, we plan to launch operations on other emerging markets as well. Our Chinese business expects to capture at least 2.5% of that market in 2-3 years, while total turnover of the Chinese market is estimated at $150-200 mln”.

Investment Manager of Norum Alexander Vlasov said that either a sale of the holding’s shares to a financial or strategic investor or an IPO could be a way to sell a stake in the company. He went on to say that “in line with our estimates, Buka’s market cap could top $40 mln”.

Buka is one of the largest and oldest Russian manufacturers of computer games. The company’s product line features leading Russian software developers and foreign sales outlets. The company’s partners include the best Russian software developers and major foreign publishers. Buka’s games are marketed and sold in 70 countries around the world and have been translated into 15 languages, including Japanese and Chinese.

The company accounted for a hefty 12% of Russia’s publishing market in 2003-2004 and its dealer network numbers over 250 towns and cities across Russia. According to expert estimates, the turnover of Russia’s licensed computer game market will amount to $150-200 mln in retail prices. The country’s licensed market is growing at 30% a year.

Kommersant Money magazine (Issue 24, June 20-26, 2005) released a rating of Growth Leaders among Mutual Funds. Mixed mutual fund Finam First (Asset Management Regulations were registered as entry #0097-59837006 with the Federal Securities Service on April 1, 2003, with amendments and additions registered as entry #0097-59837006 with the Federal Securities Service on January 27, 2005 ) was named as the winner of this rating in the 3-month (up 18.07%) and 6-month (31.3%) categories. In addition, according to certain data from the business magazine, over the past two years Finam First stock portfolio has gained 52%, which is one of the best results achieved by Russian mutual funds.

On June 21, 2005 the Federal Securities Service adopted a decision to grant a 5-year license for the provision of custody services to investment, mutual and non-state pension funds to Finam. This will enable the investment company to enlarge the range of its services. In addition, Finam has taken another step towards establishing an integrated investment holding.

This license will enable the depositary department of Finam Investment Company to significantly broaden the scope of its opportunities, in particular, keep records and store assets, as well as rights to securities of joint stock investment funds, mutual funds and non-state pension funds. In addition, the license provides for the company’s control over the compliance of management companies of investment funds (both joint stock and mutual) with requirements of federal laws, other statutory acts, the charter and investment declaration of the joint stock investment fund, terms of agreements signed with the joint stock company and asset management rules for mutual investment funds.

Unless otherwise provided for by the contract, the specialized depositary is also entitled to maintain registers of stakeholders of mutual investment funds, keep accounting records of joint stock investment funds or the mutual investment funds, render advisory and information services to joint stock investment funds, management companies for mutual investment funds or the non-state pension funds and (or) its management company based on operations as a specialized depositary.

Initially, Finam’s specialized depositary will focus on rendering services to Finam Management. So far, four mutual investment funds have been formed. The depositary will obviously not only meet the needs of Finam, but also offer services to a number of outside clients. For this reason, obtaining the license of a specialized depositary is another step in Finam’s