Actuality July 2007

From July, 18, 2007 shares of Saving Bank of Russia stopped being engaged in traffic of the Russian exchange stocks.

It only is the temporary measure related to splitting of papers.

But the date of renewal of auctions is still unknown, and, taking into account that Saving Bank is one of «blue chips» at the Russian market, for many investors such halt appeared to be quite an unpleasant event.

For those, who trades at the FORTS market, the problem is easily decided – it is possible to accomplish operations with the futures contracts for saving Bank.

The Saving Bank has already had time to trade at the urgent market.

The Futures for usual shares of Saving Bank is on trade in FORTS from October, 2005.

In the first half-year 2007 average day turns on it attained imposing volumes: about 500 million RUB ($20 million), and the number of transactions fluctuated from 400 to 500 a day.

One of the main advantages of instruments of urgent market is possibility to trade with leverage. In case with usual shares of the Saving Bank it appeared to be especially actual, because up to date the cost of one paper was very high – about 100,000 RUB ($4000). Therefore the futures became a comfortable instrument for speculators who could fully use high potential and volatility of securities, not paying for the overall cost of shares, and paying in only 15% of the cost of the futures contract as the cover funds (it corresponds to the leverage 1:6,5). Other important players of this market there were arbitrageurs, who earned on the difference in the cost of the futures and its base asset.

A futures as an alternative for a share

Nowadays because of impossibility of making bargains at the market of shares the fact of circulation of the futures on the Saving Bank opens the real possibilities to manage the risks for everyone, who h

as the shares of the biggest bank of the country in their portfolios, and there are dozens or even hundreds of thousands of them.

For the period of trading halt all of them have the great risks of market breakdown without the possibility to sell off the shares.

At the same time opening of short positions on futures contracts for the shares of the Saving Bank (simply speaking, “the sale” of futures) for the period till renewal of auctions on the spot-market gives the possibility to preclude the risks of loss during that period of time, when the stock market is paralyzed, and the investors have their hands tied. In addition, the salespeople of futures get rates, as with the course of time the cost of the futures goes down and gradually approaches the cost of base asset. And it means that the money sent to

the cover funds will find no market, but will really work.

The situation with the Saving Bank will help to see the futures from one side more – as the instrument of pricing.

The urgent contract is foremost an agreement between participants about the future cost of base asset, and only

then the instrument for speculations and arbitration. And now in absence of shares of the Saving Bank on the spot-market the futures remain to be the only course reference point for investors (there are no depositary receipts on securities of this issuer on western exchanges). Therefore everybody, who wants to know how the Saving Bank, current events, and decisions taken by its managers are estimated by the market, is able to keep up with the futures prices.