DEVELOPMENTS ON THE BOURSE

The Moscow Inter-bank Currency Exchange (MICE) considers buying equity in regional currency exchanges, in particular, Asia Pacific Inter-bank Currency Exchange (APICE), at the same time maintaining the existing structure of regional trading floors.

As MICE's press release says, this decision was made by the bourse's council "due to significant revenue reductions at regional exchanges and their growing integration into the national trading system."

"ZR" FILE: U.S. dollar turnover at APICE reduced by 56% in 2003 and amounted to $541 million, with euro turnover growing by 71% (to 14 million). At the same time, APICE's yearly turnover in securities grew by 26.5% and reached 2,968 million rubles. In particular, corporate stock turnover increased by 17% (up to 2,193 million rubles) and that of governmental papers grew by 60% (775 million rubles).

APICE director general Victor Ruban believes that participation in equity of such a powerful financial structure as MICE will add a new impulse to development. By "ZR" data, MICE intends to buy 51% in APICE from major shareholders. Published below is an interview with Victor Ruban Igor Kholodkevich, APICE securities department manager.

- On what instruments do you place emphasis?

Victor Ruban: We give much attention to operations with all instruments, but regional market participants prefer traditional financial instruments - dollar, euro, RF governmental papers, shares of stock and corporate bonds. Demand remains low for short-term instruments, REPO operations and Central Bank's deposit auctions.

- Does the bourse management have some perspective projects?

Igor Kholodkevich: Our main role is to make new trading technologies continuously developed at MICE accessible to regional market participants. However, high costs of such technologies for our dealers is often a barrier to their swift introduction. We try to make their use somewhat cheaper where appropriate. In particular, this is achieved by using APICE's Internet-trading system.

Another aspect is participation in developing investment activities in the Far East. In this respect, we promote a project for more effective use of the stock market both by investors and stock issuers. We conduct field seminars in Far Eastern regions, organize special course on the base of higher learning institutions in Vladivostok. This activity is rather successful. In particular, we observe that percentage of stock operations transacted in Far Eastern regions other than Primorsky Krai grows annually.

Highest activities are registered in Khabarovsky Krai, where a bond loan was successfully floated recently. Sakhalin also shows more activity in this year: Sakhalin-West bank from Yuzhno-Sakhalinsk appeared in the stock market and builds up volume of operations. Investors from other regions - Kamchatka and Amur Oblast - also have growing interest in stock market operations.

- What were effects on the bourse after foreign-currency market turnover declined and your profits decreased?

V.R.: It is general knowledge that before 2003 the bulk of revenues to the bourse was coming from foreign-currency operations. Change in foreign-currency regulations and reduction of commission fees put the bourse in a difficult position, but we have kept afloat.

- Will your shareholders receive dividend for 2003?

V.R.: This is to be decided by the Bourse Committee and shareholders meeting. One thing can be stated with surety: our shareholders made investments in APICE not to gross profits but to establish a financial institution in the region. On the other hand, APICE capitalized profits and increased charter capital 2.5 times, with price of shares growing respectively.

- MICE's committee examined developing its regional structure and, in particular, participation in equity of regional exchanges. How the situation will develop further?

V.R.: For several years, APICE has been coordinating with MICE its operations in financial markets, organizing seminars on activating investment process in the region, promotion of new stock issuers in the market. In fact, participation in equity is confirmation of common interests of our shareholders, of APICE and MICE, and a move to strengthen the financial market infrastructure.

- Bond loans are a serious stimulus for investment process, but Far Eastern companies don't use this practice. Why?

I.Kh.: As we see, large corporations such as OAO Dalsvyaz don't have any specific problems in floating bonds. Problems arise for smaller companies, for who issuing corporate bonds was unprofitable due to high costs. Only in last year, rules for issuing bonds changed as did the general economic situation in the country. Therefore, we expect that the next year will be more favourable for regional bond issuers to reach out to the Russian market. APICE, in particular, has several schemes for bond offerings. - Kirill ARIADOV.

FAR EASTERN CUSTOMS HOUSES CLEARED RECORD HIGH

Far Eastern Customs Authority director Viktor Vuglyar summed up results for 2003.

The customs houses reporting to FECA cleared 30.5 million tons of cargoes valued at a total of $7.2 billion (for reference, $6.1 billion in 2002). The bulk of this amount was exported - 27.6 million tons, with only 2.9 million being brought into Russia.

137,524 passenger cars and other motor vehicles were imported through FECA customs houses in 2003 with import taxes totaling 9.08 billion rubles (18,858 units at a total of 9.03 billion in 2002). Corporate entities imported 4,202 vehilces in 2002 and 8,934 in 2003.

Viktor Vuglyar informed that customs staff learn to work with the new Customs Code. It was translated into Chinese and published in China with a large press run. Term for cargo declaration clearance is 3 days now. - Yury ROGOV.

PRIMORSKY KRAI LAWMAKERS TO INQUIRE INTO SITUATION AT "BOR"

This year's first session of Primorsky Krai legislative assembly held on 28 January decided to inquire into the situation at OAO Bor. The commission will be led by Alexander Mamoshin.

This action has been initiated by legislators protesting against bankruptcies at a number of major companies in Primorsky Krai. Adam Imadayev who continues a hunger strike suggested his colleagues to sign an appeal to the president, prime minister, chairman of the Supreme Judge Qualification Collegium and chairman of the Supreme Arbitration Court, but lawmakers refused to support him.

They said they cannot interfere in business conflicts and influence on arbitration court but have the right to require all relevant information from all parties concerned. In their opinion, situation with Bor's bankruptcy indeed looks strange, because this company has orders for its produce, but management practices raise many questions.

In this connection, Imadayev intends to carry on hunger strike after 13 days on diet. He believes only federal authorities can bring clarity to the situation around OAO Bor. - Yury ROGOV.

JAO PARLIAMENTARIES SEEK FOR REDUCTION IN ENERGY TARIFFS

The first session of the legislative assembly of Jewish Autonomous Republic considered 39 issues.

Upon passing some local laws, legislators prepared an appeal to premier Kasyanov seeking for reduction of electric energy tariffs due to commissioning of Bureiskaya hydropower plant. A second generator was launched at Bureiskaya in November 2003, but tariffs grew on 1 January instead of reduction. For instance, tariffs for households went up by 0.17 rubles per kilowatt-hour. - Yulia PROKHOROVA.