Listing in London
November 2005
Agenda
 The London markets and Russia
 Why consider accessing the international capital markets?
 Why London’s Main Market?
–
–
–
–
Range of markets
Flexible regulation
Access to capital
Access to liquidity
 AIM – the benefits of accessing the world’s most successful growth
companies market
 Case studies
 Questions?
November 2005
2
London Stock Exchange - key statistics
Admitted companies (inc AIM)
2,494 domestic companies
519 international companies
1,311 AIM
Market capitalisation
UK listed: US$3,020bn
International listed: US$3,786bn
AIM: US$88bn
Equity turnover (Jan-Dec 2004)
Main Market:
US$4,447bn domestic
US$4,614bn international
GDRs: US$109bn
AIM: US$34.8bn
Source: London Stock Exchange – September 2005
November 2005
3
Companies on the London Stock Exchange: Russian focus
November 2005

18 Companies traded on the LSE Main Market

In 2004, the total trade volume in Russian DR’s was over US$63.96bn

Privatisation expertise in London

Balanced approach to corporate governance

Gateway to European consumers and investors
Source: London Stock Exchange trade statistics
4
Companies listed in London, Main Market
AO TATNEFT
GAZPROM
LUKOIL
OMZ
EFES Breweries International
SISTEMA
PYATEROCHKA
EVRAZ Group
NOVATEK
Companies traded in London, Main Market
MMC NORILSK NICKEL
AO MOSENERGO
SURGUTNEFTEGAZ
ROSTELEKOM
WIMM BILL DANN FOODS
SIBNEFT
MOBILE TELESYSTEMS OJSC
UNIFIED ENERGY SYSTEMS OF RUSSIA
YUKOS
November 2005
Source: London Stock Exchange trade statistics
5
Companies on AIM with CIS focus -22 companies
ARICOM
ORIEL RESOURCES
AVOCET MINING
PALLADEX
CARDINAL RESOURCES
PETER HAMBRO
CELTIC RESOURCES
EUREKA MINING
FRONTIER MINING
RAMBLER MEDIA
RAVEN RUSSIA
REGAL PETROLEUM
HAMBLEDON MINING
SIBIR ENERGY
HIGHLAND GOLD
TRANS SIBERIAN
KRYSO RESOURCES
UKRPRODUCT
NELSON RESOURCES
URALS ENERGY
OXUS GOLD
VICTORIA OIL
November 2005
Source: London Stock Exchange trade statistics
6
Case Study: London – a leader in international trading
Trading Value on Russian DRs
70,000
Value (million USD)
60,000
50,000
40,000
30,000
20,000
10,000
2001
2002
2003
2004
2005YTD
Date
The Exchange’s member firms traded around US$64bn of Russian securities in 2004,
representing around 59% of the total trading volume on the IOB for 2004.
November 2005
Source: London Stock Exchange trade statistics
7
Company growth
Liquidity
Increasing and
maintaining
liquidity
Capital
Raising it efficiently
& effectively when
required
Profile
Growth
Maximising
marketing/PR
opportunities
Independent Market Expertise
Recommendations on how to maximise the value of joining a
London market
The LSE supports customers in maximising shareholder value through
supporting capital raising and generating liquidity whilst maximising
opportunities from their increased profile
November 2005
8
Sistema
CAPITAL: Case study - Main Market GDRs
Sistema is the largest Russian IPO ever and
the biggest international IPO on the London Stock
Exchange since Orange in 2001.
Core business activities
Sistema is the largest private sector consumer
services company in Russia and the CIS, with over
35 million customers. Founded in 1993, the
company reported revenues of US$ 4.1 billion for
the first nine months of 2004 and total assets of
US$ 7.7 billion.
Transaction Synopsis
Date of Admission :
Market:
Transaction:
Money raised:
Turnover (first 11 days):
FTSE Classification:
14 February 2005
Main Market
Placing
$1.56 billion
$2.54 billion
Diversified Industrials
“London is a major capital markets center and the
choice of the London Stock Exchange reflects our
desire to attract a broad institutional shareholder
base, as well our strategic partnerships with leading
global companies based in Europe”.
Vladimir Evtushenkov,
President of Sistema
November 2005
9
Lukoil OAO
LIQUIDITY: Case study – Main Market ADR’s
4,000
Transaction Synopsis
Monthly traded values of LUKOIL's shares
3,500
Date of Admission :
Market:
Transaction:
Market Capitalisation:
FTSE Classification:
3,000
$ Millions
2,500
2,000
1,500
1,000
7 August 2002
Main Market
Placing
US$34 billion
Oil integrated
500
Jan-03
Jul-03
Jan-04
Date
Jul-04
Jan-05
Jul-05
“We listed ADR’s on the London Stock Exchange in
August 2002 and are delighted with the recent ADR
listing and the volume of trading.”
Mr Alekperov, President
The increased level of information transparency and corporate governance
has fuelled the liquidity of Lukoil securities.
Lukoil DR’s are one of the most liquid securities on the London’s IOB.
November 2005
10
PROFILE: Case study – Main Market ADR’s
Core business activities
OMZ (Uralmash - Izhora Group) is one of the
largest Russian heavy industry enterprises.
The Company has manufacturing and engineering
operations in Russia and the Czech Republic and
representative offices in India and China.
OMZ
Transaction Synopsis
Date of Admission :
Market:
FTSE Sector:
30 September 2003
Main Market
Engineering - General
“The listing of our DRs on the Official List of the
UK Listing Authority is a significant step in our
efforts to increase the transparency of our
company for our investors, customers, employees
and partners.”
Kakha Bendookidze,
Chief Executive Officer
November 2005
11
London attracts companies raising capital
Breakdown of the Western European IPO Market 2004
Other
1%
Euronext
7%
Madrid
1%
Deutsche Borse
2%
Borsa Italia
2%
LSE
79%
Main Market
18%
AIM
82%
Scandinavian Exchanges
8%
London dominated the European IPO market in the year 2004
with 79% of all IPOs
November 2005
Source: London Stock Exchange trade statistics and individual exchange websites
12
London Stock Exchange: the choice for international
companies
Total number of IPOs on the LSE, Nasdaq and NYSE
2000 to 2004
400
London Stock Exchange
350
Nasdaq
NYSE
Total No of IPOs
300
250
200
150
100
50
0
2000
2001
2002
2003
2004
•
London Stock Exchange - 423 new companies joined in 2004, 293 of which were IPOs, 49 of which were
international
• NYSE – 131 IPOs in 2004, 11 companies of which were international
• Nasdaq – 166 IPOs in 2004, 18 of which were international
November 2005
Source: London Stock Exchange and individual exchange websites
13
London Stock Exchange – 16 Intl Companies on the MM in 2005
Company Name
Country of
Origin
Admission Date
FRUTAROM INDUSTRIES
Israel
08/02/2005
55
KUMHO TIRE CO INC
South Korea
16/02/2005
367
SISTEMA JSFC
Russia
14/02/2005
1,560
UTI BANK
India
22/03/2005
240
NEWS CORP
USA
18/04/2005
0
SREI INFRASTRUCTURE FINANCE
India
21/04/2005
34
PYATEROCHKA HLDG N.V.
Netherlands
11/05/2005
562
AGCERT INTERNATIONAL
Eire
08/06/2005
109
EVRAZ GROUP SA
Luxembourg
08/06/2005
417
PARTYGAMING
Gibraltar
30/06/2005
1,632
BANCO SANTANDER CENTRAL HISPANO
Spain
01/07/2005
0
OAO NOVATEK
Russia
27/07/2005
966
888.com
Gibraltar
04/10/2005
270
BANKMUSCAT
Oman
05/10/2005
163
INVESTCOM
UAE
11/10/05
700
KHAZAKHMYS
Kazakhstan
12/10/05
1,124
November 2005
Source: London Stock Exchange - 2005
Money Raised
US$m
14
London has the widest choice of proven markets globally
A choice of globally respected markets supported by
a wide range of institutional & retail investors
Main Market
Supports the capital raising
activities of earlier stage companies
in their initial growth period.
1,311 issuers
Supports the capital raising
activities of more established
companies seeking further growth.
1,702 issuers
No other Exchange globally can offer the same choice of
markets with the same breadth and depth of investors
November 2005
Source: London Stock Exchange – September 2005
15
Key differences between our markets

Regulation by the LSE
No trading record required
No minimum amount of shares to be in public hands
In most cases, no prior shareholder approval required for
transactions
Normally, admission documents not pre-vetted by Exchange
or UKLA but by nominated adviser
Nominated adviser required at all times






Pre-vetting of admission documents by the UKLA
Compliance required with the rules of the UKLA
Normally a three-year trading record required
Minimum of 25% shares in public hands
Prior shareholders approval for certain transactions
Sponsors needed for certain transactions





Main Market
AIM and Main Market are structured differently to assist different
types of companies
November 2005
16
AIM: the international market for smaller and growing companies
AIM
Key statistics
November 2005
•
AIM companies: 1,311
•
Overseas AIM companies: 185
•
New companies on AIM in 2004: 355
- 294 UK
- 61 overseas
•
Capital raised since 1995: US$35bn
•
Capital raised in 2004: US$8.8bn
- US$ 7.8bn UK companies
- US$ 1.02bn overseas companies
Source: London Stock Exchange trade statistics – September 2005
17
AIM – since launch
YTD 2005, there were 389 admissions to AIM, the largest number since launch.
Number of AIM Admissions 1995 to September 2005
450
389
400
355
ADMISSIONS
350
277
300
250
177
200
150
123
145
107
100
160
162
2002
2003
102
75
50
0
1995
1996
1997
1998
1999
2000
2001
2004
2005
YEAR
November 2005
Source: London Stock Exchange trade statistics – September 2005
18
AIM – Admission Process
All companies must appoint a Nomad at all times
Advisers such as accountants and lawyers are
brought on board to assist with the floatation
AIM companies normally work alongside an
Investor Relations Company. The Nomad will
advise on this.
The Nomad will draft and prepare the AIM
admission documentation and carryout the due
diligence required.
A 10 day announcement is required by all AIM
applicants giving notification of your intention to
join the market
November 2005
19
AIM - Continuing Obligations
AIM companies are subject to the AIM Rules which outline the continuing obligations of being on a
public market. Some of the key continuing obligations are:
AIM companies must have a Nomad at all times, otherwise they will be suspended
from the market
AIM companies must disclose all price sensitive information in a timely manner
including substantial transactions, related party transaction, reverse takeovers and
other miscellaneous transactions
Half Yearly and Annual Report and accounts required in adherence with deadlines
All directors accept full responsibility, collectively and individually for the AIM Rules
Restrictions on deals for directors and applicable employees on AIM securities during
close periods
November 2005
20
AIM companies by market capitalisation
Distribution of AIM Companies by market value
September 2005
300
275
Number of companies
250
203
214
199
200
145
150
129
87
100
50
27
0
less than
$3.5m
$3.5m to
$8.8m
$8.8m to
$17.6m
$17.6m to
$44m
$44m to
$88m
$88m to
$176m
$176m to
$440m
more than
$440m
Market Value Range ($m)
79% of companies on AIM have a market capitalisation under $50million.
27 companies on AIM are capitalised above $440million.
November 2005
Source: London Stock Exchange trade statistics – September 2005
21
AIM: a diverse market
18,000
Market Capitalisation ($m)
16,000
No. of Companies
250
12,000
150
10,000
8,000
100
6,000
4,000
50
General
Retailers
Real Estate
Pharmaceuticals
& Biotechnology
Media &
Entertainment
Leisure & Hotels
0
Software &
Computer
Services
Speciality &
Other Finance
Mining
0
Support
Services
2,000
AIM – a diverse market, with 33 sectors represented.
November 2005
Source: London Stock Exchange trade statistics – September 2005
22
No of companies
200
14,000
Oil & Gas
Market capitalization ($m)
Top 10 AIM sectors by market capitalization and no of companies
for September 2005
Secondary markets

Average daily turnover = £72million

6,600 average bargains per day during 2004

Market is price driven – prices quoted and liquidity provided
by 33 market makers

One AIM Index at present – FTSE AIM Index - which
comprises all AIM companies

Liquidity varies across the market
November 2005
Source: Teather & Greenwood, Institutional Investors in AIM
23
Investment in AIM

All but one of the main UK institutions invests in AIM

Value of Institutional holdings = £10billion

Top 3 by value: CDS & Co, Fidelity, Artemis, Chase, Foreign
& Colonial

Top 5 by number of investments: Foreign & Colonial,
Artemis, Fidelity, Framlington, Gartmore

80% of secondary market bargains are retail
November 2005
Source: Teather & Greenwood, Institutional Investors in AIM
24
Case study – Russian AIM Company, Celtic Resources Hldgs
Celtic Resources
Transaction Synopsis
Date of Admission :
14 October 2002
Market:
AIM
Transaction:
Placing
Market Cap. at admission: US$68m
Capital raised:
US$9.4m
Mkt. Cap. as of 06 Sept 2005:US$244m
FTSE Classification:
Gold Mining
Core business activities
The ownership and operation of gold mines in Russia
and Kazakhstan, two of which are already in
production. The Group is also exploring and
developing other base metal and hydrocarbon
prospects in the Former Soviet Union, and holds minor
oil and gas interests in the UK.
Celtic Resources Hldgs Turnover
TOTAL M nthly Value US$
Total Shares
25
Total no. of shares (m)
250
20
150
15
100
10
50
5
Total Monthly Value
$m
200
0
0
Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul04 04 04 04 04 04 05 05 05 05 05 05 05
Date
November 2005
25
Case study – Russian AIM Company, Peter Hambro Mining Plc
Peter Hambro Mining Plc has 10 gold sites, two of
which, Pokrovskiy and Pioneer are in production.
Pokrovskiy is where Peter Hambro Mining Plc started
mining and produced its first gold in 1999. It is
approximately 320 km north-northwest of the regional
capital, Blagoveschensk, and 50 km north of the
border with China. Pioneer entered production this
year and is located approximately 40 km from
Pokrovskiy.
Peter Hambro Mining Plc is involved in the mining of
gold ore and the production of dor bars which are sent
for refining into London Good Delivery bars of gold
and silver at a refinery in Krasnoyarsk. Most of the
gold is currently sold to Sberbank in Moscow and the
silver is sold to other banks in Russia. Under Russian
law, the group has the right to export its product,
once refined, to be sold for hard currencies.
November 2005
29 April 2002
AIM
Placing
US$67m
US$20.3m
US$1.09bn
Gold Mining
Peter Hambro Mining Plc Turnover
350
30
TOTAL M nthly Value US$
300
25
Total Shares
250
20
200
15
150
10
100
Total no. of shares (m)
Core business activities
Transaction Synopsis
Date of Admission :
Market:
Transaction:
Market Cap. at admission:
Capital raised initially:
Mkt. Cap. as of 6 Sept.2005:
FTSE Classification:
Total Monthly Value $m
PETER HAMBRO
MINING
5
50
0
0
Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul04
04 04 04
04 04
05
05 05
05
05 05 05
Date
26
Case study –Ukrproduct (UPG)- First Ukrainian group on AIM
Ukrproduct Group Ltd
Core business activities
Ukrproduct Group (UPG) is one of Ukraine's
leading producers of branded foods, the
company's main business focuses on the
production and distribution of branded food
products, namely packaged butter and
processed cheese, to wholesale and retail
outlets in Ukraine through its own distribution
network. UPG also produces dried-milk powder
for export to countries across Europe as well
as the Far East.
Transaction Synopsis
Date of Admission :
11 February 2005
Market:
AIM
Transaction:
Placing
Market Cap. at admission: US$41m
Capital raised initially:
US$11m
Mkt. Cap. as of 06 Sept.2005: US$45
FTSE Classification:
Food Processors
The funds raised will be utilised to invest in:
•New plant & equipment in core sectors
•Expansion of distribution network
•Provide additional working capital for the group
November 2005
27
Case study – Nelson Resources – Among the largest placings on AIM
NELSON
RESOURCES
Core business activities
Nelson Resources is a fast-expanding
Bermuda-registered, Toronto-listed
independent, which over the past two years
has picked up several oil production projects
in Kazakhstan and which recently made its
debut on the London Stock Exchange's AIM
market
Transaction Synopsis
Date of Admission :
Market:
Transaction:
Market Cap. at admission:
Capital raised:
FTSE Classification:
Nominated Advisor:
Broker:
19 July 2004
AIM
Placing
US$886m
US$120m
Oil & Gas
Canaccord Capital Limited
Hoare Govett Limited
Top 6 Individual money raisings
Company
NORTHUMBRIAN WATER GROUP PLC
November 2005
Date of
issue
Money
raised (£m)
Issue type
23-May-03
389.0 New Issue
CENTER PARCS(UK)GROUP
11-Dec-03
245.0 New Issue
MELROSE
26-May-05
202.0 New Issue
TRADING EMISSIONS
21-Apr-05
135.0 New Issue
CENTAUR HOLDINGS
10-Mar-04
134.2 New Issue
PRI GROUP
26-Jun-02
130.8 New Issue
28
Case study – Russian AIM Company, Urals Energy Public Company Limited
URALS ENERGY
Core business activities
Urals Energy is an independent exploration and
production company with its principal assets
and operations in Sakhalin Island, Timan
Pechora and the Republic of Udmurtia, Russia.
Transaction Synopsis
Date of Admission :
Market:
Transaction:
Market Cap. at admission:
Capital raised initially:
FTSE Classification:
09 August 2005
AIM
Placing
US$389m
US$138m
Oil & Gas – Exploration &
Production
“We are delighted that our IPO has been so
positively received by investors. The offering
will allow us to continue with our
exploration and development program in
Russia and provide flexibility to our capital
structure. Becoming a public company has
been an important milestone for us.”
William Thomas, Chief Executive Officer of
Urals Energy
November 2005
29
Case study – Russian AIM Company, Rambler Media Ltd
RAMBLER MEDIA
Core business activities
Rambler Media is an integrated and diversified
Russian language media, entertainment, services
and content delivery company with three main
segments: internet services, mobile value added
services and television broadcasting. Rambler.ru,
Rambler media’s portal, is one of the most popular
portals and search engines with the global Russian
speaking community.
Transaction Synopsis
Date of Admission :
Market:
Transaction:
Market Cap. at admission:
Capital raised initially:
FTSE Classification:
15 June 2005
AIM
Placing
US$m158
US$m46
Publishing & Printing
“We are very pleased to be admitted to
trading on AIM and would like to thank
investors for their strong support and
interest in our business.”
Irina Gofman, CEO of Rambler Media
November 2005
30
AIM: Top 10 IPOs by money raised in 2005
Company
Admission
date
Country of Origin
MELROSE
26/05/2005
UK
201.99
Other Financial
RAVEN RUSSIA
29/07/2005
UK (CIS focused)
153.00
Real Estate Holding &
Development
DAWNAY DAY CARPATHIAN
26/07/2005
UK (CEE focused)
140.00
Real Estate Holding &
Development
TRADING EMISSIONS
21/04/2005
UK
135.00
Other Financial
EMPIRE ONLINE
15/06/2005
British Virgin Island
123.47
Media Agencies
BILLING SERVICES GROUP
15/06/2005
Bermuda
84.13
Transaction and Payroll
Services
URALS ENERGY
09/08/2005
Cyprus (CIS focused)
74.00
Oil & Gas- Exploration &
Production
IBS OPENSYSTEMS
23/03/2005
UK
56.00
Software
UTILICO EMERGING MARKETS
UTILITIES
20/07/2005
Bermuda
52.50
Investment Companies
BLACK SEA PROPERTY FUND
(THE)
14/03/2005
UK (CEE focused)
50.14
Real Estate Holding &
Development
November 2005
Source: London Stock Exchange trade statistics – 2005
Money
raised at
admission
£m
Sub sector
31
Russian/CIS website
November 2005
www.londonstockexchange.com/ru
www.londonstockexchange.com/ru/AIM
32