Financial results of Tallinn Stock Exchange and Estonian Central Securities Depository in 2006

10.05.2007 TLN

The operating income of the Tallinn Stock Exchange as a parent company increased in 2006 to MEEK 18.3 (2005: MEEK 17.6). The net profit of the Tallinn Stock Exchange was MEEK 5 (2005: MEEK 7.6). The decline in profit in 2006, compared to the previous year, is related to the extraordinary income in 2005 from the denotation of Hansapank.

The operating income of the Estonian Central Securities Depository (Estonian CSD), a subsidiary of the Tallinn Stock Exchange, increased by 11% up to MEEK 37.4 (2005: MEEK 33.8). The net profit of the Estonian CSD dropped from MEEK 10.1 in 2005 to MEEK 7.8 in 2006 in connection with the income tax liability arising from the dividend payment.

As of the end of 2006, the Tallinn Stock Exchange Group (inclusive of Estonian CSD) had 38 employees. The number of the Group’s employees has increased by four compared to the previous period. The income per employee in 2006 was MEEK 1.45 (2005: MEEK 1.49), the profit per employee was EEK 337 000 (2005: EEK 519 000).

In connection with active development activities, the cost basis of the Tallinn Stock Exchange and the Estonian CSD increased significantly in 2006 and consequently the achieved net profit declined as well. Several new local and pan-Baltic projects were launched, systems improved, and supervision and control were enhanced. The cost-effectiveness of majority of the launched projects is already reflected in the financial results of coming years.

The market value of shares listed on the Tallinn Stock Exchange increased over the year from BEEK 47 to BEEK 70. A successful debut on the stock exchange was made by Eesti Ehitus (May 2006) and Olympic Entertainment Group (October 2006). Rakvere Lihakombinaaat left the stock exchange. The total turnover of stock exchange transactions dropped from BEEK 30 to BEEK 12.5, but without taking account of the transactions concluded with the shares of Hansapank, the total turnover of stock exchange transactions increased from BEEK 8.4 in 2005 to BEEK 12.5 in 2006. The total number of stock exchange transactions increased from 41 000 to 63 000.

“The last year was very successful for us and showed that the demand for different products of securities markets is increasing. The Tallinn Stock Exchange will open the alternative market First North this year to provide developing small companies with a possibility to involve additional capital. The investor education programme has also been commenced, and cooperation with partners is continued to achieve the income tax exemption of securities investments and the introduction of state companies to the stock exchange,” said Andrus Alber, Chairman of the Management Board of the Tallinn Stock Exchange.

As of the end of 2006, 6337 companies were registered in the Estonian CSD. The number of registered public limited companies remains stable (5175 registered companies), but the registration of private limited companies indicates a strong growth (1162 registered companies).

The number of securities accounts registered in the Estonian CSD increased over the year up to 103 302 (an annual growth of 18%). At the beginning of 2006 the nominee accounts totalled 743, reaching 1020 at the end of the year. The turnover of transactions with securities registered in Estonian CSD was BEEK 66. The number of transactions was 116 408, compared to 113 082 transactions in 2005.

The number of persons that had joined the mandatory funded pension system (second pillar) increased by the end of 2006 to 519 726, compared to 481 271 at the end of 2005. The total volume of mandatory funded pension funds increased over the last year from BEEK 4.8 to BEEK 7.4. In 2006, the volume of additional funded pension (third pillar) funds increased by a record of MEEK 311 (the total volume being MEEK 763 as of 31 December 2006).

As of the end of 2006, the volume of investment funds registered in the Estonian CSD was BEEK 9.5, of which BEEK 2.6 accounts for the investments of individuals. The individuals who had invested in the funds numbered 14 827 at the end of 2006, which is 30% more than a year ago.

“From 2007, the Estonian CSD is offering real-time settlement of transactions carried out on an OTC basis against payment, which creates a basis for conclusion of any securities transactions between states at the level of Baltic countries. Estonian CSD will also launch a system which allows to more effectively organise the issue and withdrawal of investment fund units, exchange and succession of such units,” Alber added.

The financial results of OMX Group, parent company of Tallinn Stock Exchange and Estonian CSD, in 2006 are available on the website www.omxgroup.com