The Russian CSD, the National Depository Center (NDC), today published its 2006 results. They show growth of 85.5% in the value of securities in accounts at the depository, from RUR 1.77 trillion to RUR 3.3 trillion (USD 124.9 billion).
NDC says most of the rise in assets on deposit was among shares of joint-stock companies and corporate bonds. Shares on deposit rose from 15% to 35% of all assets, exceeding the value of bonds (corporate, municipal and federal), which represented 31% of assets. The value of shares on deposit rose 343.7% to a total RUR 1.14 trillion. The value of Unit Investment Trusts on deposit with NDC rose nearly eight-fold.
“In 2006, NDC proved its status as the leading Russian settlement depository,” says Nikolai Egorov, Director, NDC. “We regard the impressive growth dynamics of assets deposited with NDC, especially shares, to have resulted from a successful realization of our strategy of diversification of NDC services and improved quality services. The inflow of shares into nominal NDC custody was caused also by the growth of liquidity in the MICEX group and decreased inventory charges. The number of the transactions processed by NDC also rose considerably (1.7-fold). Thus about 80% of our operations are exchange and over-the-counter transactions involving shares.”
NDC says that in the past year it has undertaken the necessary preparatory work to become licensed as a central depository. It has considerably increased its own capital (RUR 870.41 million as of 1 October, up 39.2 % since the beginning of the year); secured an A+ rating from the international agency Thomas Murray; and paid what it calls “close attention to improvements in its corporate governance, technological base and interaction with participants of the market, systems of risk control, and service quality.”
NDC has implemented projects contributing to the market for OJSC Gazprom shares and providing for OJSC Rosneft’s IPO on the MICEX exchange. Other successful projects included implementation of the first stage of NDC’s new CSD technological platform and the launch of a new technology for the collection of depositor lists.
NDC says its stronger position in the market is confirmed by operational records. It says the number of inventory operations for 2006 exceeded 1.9 million, or an average of 159,000 operations per month, which is 71 % up on 2005. The number of ruble transactions achiebing true DvP through NDC rose 14.4 % to 2,925 in 2006 (compared with 2,557 in 2005), while the total value of ruble transactions in comparison with 2005 rose by 15.1 %, from RUR 143.72 billion to RUR 165.42 billion (USD 60.9 billion). The market value of securities moved during inventory depository operations for 2006 exceeded RUR 30.7 billion, up 108% compared with 2005 (RUR 14.7 billion).
The number of accounts opened by domestic entities increased from the beginning of the year to 1,556 (up 8.7 %), and the number of securities issues accepted for servicing rose to 1,736 (up 22.4 % from 10 January 2006). The number of securities held on account at NDC for 2006 has risen 5.4-fold, from 50.3 billion individual items to 259.3 billion. This arises not only from the acceptance from new customers of the securities of existing issuers, but also from acceptance for servicing of the securities of new issuers. Thus, the total number of issuers whose securities are serviced by NDC has increased since the beginning of 2006 by 18.6 % to 816.
In 2006 NDC made 221 coupon payments on bonds (up 62.5%) and also paid RUR 34.7 billion against principal (up 177.6%). As of 31 December 2006, the number of bond issues with a subsequent retirement term reached 179 (issued by 139 entities). As the nominal holder of registered securities NDC in 2006 received to its account and paid out to its depositors RUR4.1 billion (up 78.26%) in dividend and share income as well as US$61.98 million for foreign currency bonds (up 10.54%). Through the year, NDC expanded its list of services and strengthened its interactions with registrars. By 29 December 2006, the number of nominal holder accounts opened by NDC with registrars reached 496. Of these, 130 accounts were opened with registrars for unit investment trust investors, and 366 with registrars for holders of shares.