Actuality January 31, 2008

Deutsche Boerse letter to Sergey Prikhodko, the Russian President aid, is an attempt to lobby creation of stock exchange at the political level

One of the largest world trading floors – German Deutsche Boerse (DB) tries to initiate creation of the European platform for securities’ trading of the Russian companies. DB offers the Russian officials to create the incorporated exchange in Germany together with the MICEX (Moscow Interbank Currency Exchange). Suggestion of the German exchange can be accepted under the influence of political factors, experts consider. Creation of such floor can diminish positions of the London stock exchange, where the basic foreign trade in the securities of the Russian companies is concentrated.

Suggestions of Deutsche Boerse are formed in the letter to Reiner Riss, Managing Director of exchange, and Frank Gerstenschlege, chairman of its executive committee. It is addressed to Sergey Prikhodko, the Russian President aid. In their letter the top-managers of the German exchange mark that they are ready to render help in strengthening of Moscow as a financial center, and suggest to change correlation of trades’ volumes in Russian assets in Russia and abroad, creating the European multinational trading system. Deutsche Boerse suggests passing control over this structure to the Russian MICEX. "Functioning in EU, such platform would render foreign investors (especially from the USA and Europe) more easy admission to the Russian securities", it is said in the letter.

Text of the document is already passed on approval to the Ministry of Economic Development and Trade, Federal Financial Markets Service, the Ministry of Foreign Affairs of Russia and the Ministry of Finance.

Deutsche Boerse AG occupies the second place on capitalization in the world rating of exchanges after the NYSE Euronext. Stock exchange capitalization exceeds $23,5 bln. According to the World Federation of Exchanges’ data on the end of November, 2007 capitalization of companies, traded on the exchange, totals $1,42 trln, volume of trades for 11 months totals over $4,06 trln. Securities of 56 Russian companies are already traded on DB, including Aeroflot, AvtoVAZ, Bashneft and Gazprom.

Deutsche Boerse, known for the aggressive policy, shows interest in the Russian market for a long time. Now the main part of the Russian securities, presented on foreign floors, circulates on LSE. So, 75,87% of average daily turnover of the Russian securities abroad fell on LSE, on the American exchanges -18,3%, on DB – 5,83%. In the previous 2007 the German exchange opened its representative office in Moscow. According to the information, in December of the previous year top-managers of the German exchange met the MICEX management. In the course of negotiations the DB representatives suggested to create in Germany the new incorporated exchange platform on trading in the Russian assets, which would belong to the MICEX. Technical and marketing opportunities of DB would be used at creation of a new trading floor. "It is an interesting idea, but we considered it untimely", explained in the MICEX. "It is necessary to treat such kind of projects carefully, first of all from the viewpoint of possible liquidity reduction of the Russian market".