Updated April 10, 2008

   KIT Finance Investment Bank introduces to the market

the "basket trade" index-based deposit, which return is tied to the price change on commodity markets. Futures contract to Brent crude, nickel, sugar and wheat act as assets.

Experts mark the potential attraction of such product on a background of price rise on raw material markets.

However, its specificity will narrow the circle of potential customers.

   New deposit is the continuation of the range

of the bank index-based holdings.

Previous year KIT Finance has introduced to the market the deposits tied to the growth of RTS index and to the oil price rise. The bank new products demonstrated the rather high return.

So, a deposit rate tied to the oil price change for a half-year term totaled 30,5% per annum.

   Minimum investments sum private investors should have for a commodity deposit totals RUR 100 000. Deposit term is 90, 180, 360 and 720 days.

Experts suppose that th is product is very attractive in the current market conditions.

The prices on the commodity floors have lately increased considerably on the background of collapses on the financial markets. For the last half-year the assets costs, included in the basket, have upped by 21% on the whole, and the value increment was 66% for a ye ar.

   At assets growth an investor would receive the return depending on their cost change plus 0,1% per annum. In case of the basket cost decline an investor would receive the invested funds back plus the guaranteed 0,1% per annum. "Basket trade" deposit does not have return limitations.

According to a deposit terms the participation stake in the aggregate basket growth is set for investors for the period of investing and makes 50%. Thus, the stake of asset participation that demonstrated the best change within the deposit validity would total 25%, the asset with the second return result – 15%, with the third and the fourth – by 5% respectively.

    Moreover, experts suppose that this bank product would be in demand among the limited investors.

As Uralsib Financial Company analyst Leonid Slipchenko forecasts, "only qualified investors foremost would be interested in this deposit". However, according to his opinion, sophisticated investors can prefer the raw material futures or stocks of metallurgical or oil companies.

However, Antanta PioGlobal analyst Maxim Osadchy supposes that the guarantee to return

the invested funds and the opportunity to earn at the raw material price rise increases this deposit attraction as compared to investments, for example, into stocks and futures.

   In addition, Leonid Slipchenko warns that "in the nearest future prices on commodity markets could edge down, and this can reduce the potential return of the index-based deposits tied to the "basket trade".