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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2008FEDERATION OF EURO-ASIAN STOCK EXCHANGESThe FEAS, as a globally recognized regionalinstitution, is growing and maturing togetherwith its members towards its goals.Huseyin ErkanPresident of FEAS & Chairman andCEO of the Istanbul Stock ExchangeThroughout 2007 and the first half of 2008, theFEAS region has persevered with a strongdesire for continued growth in worldeconomies as seen in 2006. The performanceof the securities markets in the first half of2008 is displayed in the consolidated regionalstatistics on the adjoining pages. Theindividual statistics of each of our membersare available in the member profile section.The Federation, as a globally recognizedregional institution, is growing and maturingtogether with its members towards its goals.Founded 13 years ago by 12 regionalexchanges, FEAS now has a total number of32 stock exchange members from 29 differentcountries and 8 affiliate members.In today’s economic conditions, where theincreasing oil prices led to quickly expandingsavings and sovereign wealth funds’countered the great losses felt from themortgage crisis; the long expected meltdownand fluctuations in the global markets were notrealized in full locally, due to the strength inregional markets. For this reason regional cooperationwill continue to play an importantrole in the on-going development of ourmarkets. When we look at the mid year resultsfor 2008 we see that market capitalization inthe region has decreased slightly by -1.1%over 2007. Stock trading volume in dollarterms should increase as they have exceededthe volumes seen in 2007 during the sameperiod, average daily trading volume is up21.2% from 2007. However, bonds showedslight weakness during the first half of 2008 indollar trading volume. ‘Other’ category showedstability with limited growth over 2007 whereas average daily trading volumes increased by14.1% over 2007. To put this into perspectivein the last 5 years the FEAS region has seen a179.2% increase in market cap, 14.4% in stocktrading volumes, 722.3% in bonds tradingvolume and 118% in ‘other’ average dailytrading volume.As we are now on the verge of completing ourfourteenth year of operation, most of you arewell aware of our accomplishments to date.Those that were particularly noteworthy are;the planned upgrade and the implementationof the FEAS Data Center (FDC) to standardizeand promote cross market statistics and theinitiation and upcoming implementation (2008)of the FEAS Index. This will provide for bettervisibility and for moving toward cross bordertrading as well as greater M&A, activity whichwill also make it simpler to observe and trackthe FEAS Region. There were special activitiesthat promoted the growth of stock exchangeoperations such as Bilateral Visits, establishingthe FEAS Training Center; the joint ISE/FEASprojects with international associations andorganizations such as the World Bank, WorldFederation of Exchanges (WFE) and theOrganization for Economic Cooperation andDevelopment (OECD).During 2008, FEAS has jointly hosted with itsmembers 3 meetings and conferences. Thesewere; the Working Committee Meeting held inBaku, Azerbaijan, 2nd Annual Conference ofthe Montenegro SE: ‘A Step Forward’, inBudva, the Media Workshop: How to Interactwith the Media During times of Crisis, inIstanbul, Turkey .In November 2008, the 14thGeneral Assembly Meeting will be held in AbuDhabi, UAE together with the third AffiliateMember Meeting, in addition to a WorkingCommittee Meeting and Executive CommitteeMeeting and Annual Conference ofContributors.Our continued commitment to our 5-yearstrategic plan is designed to achieve theobjectives specified within the mission of theFederation and to attain greater importance inthe competitive global market environment.Our focus during the previous five years hasbeen on the areas of promoting corporategovernance, achieving effective disseminationof information, facilitating timely disclosure andattaining regional convergence in listingrequirements, settlement; trading rules andsoftware creating greater awareness andvisibility for the region’s stocks and investmentopportunities, promoting the listing of‘investment grade’ companies in the region’smarkets and creating linkages among theregion’s intermediaries, data providers,settlement and custody institutions and stockexchanges, while encouraging cooperationamong Securities Commissions. Our majortarget is to attract the global investors who willbenefit from FEAS services and continuouslyinvest in the Region.FEAS focus during the next five years will bediscussed at the upcoming Presidents’Meeting. Some of the issues under discussionwill be products, such as ETFs based on jointindexes.Looking at the future outlook of our individualmarkets, as covered in the member profilepages, one can see that there continues to bework toward the challenges of membermarkets in providing competitive and viablefinancing options to both the government andprivate sectors, while enhancing operationsthrough technology and expanding services tomarket participants. The effort continues tofocus on the areas of increased transparencythrough investment in infrastructure anddeveloping regulations to promote strongercorporate governance.FEAS is soon to be celebrating its 14thanniversary. Since its beginning in publishingfour years ago, FEAS SAR has been publishedas two semi annual reports, in April andOctober annually.As you will remember, the initial and continuedaim of transitioning from an annual to semiannual publication is two-fold. First, throughproviding two publications rather than just one,the market performances of FEAS membersare reflected in an updated fashion. Second,the environments (both political andeconomic), within which those marketsoperate, are brought to the attention of thereaders more timely and concisely. Furtherwith new format changes to the Octoberedition, readers will receive a sort of referenceguide to our members markets and theirtrading practices and procedures.We intend this publication to be utilized as asummary reference to the Region and weattach great value to FEAS Semi AnnualReport as a marketing instrument for raisinginterest in the Region. I would like to take thisopportunity to extend my heartfelt thanks fortheir contributions to: Finans AssetManagement, Is Investment, Garanti AssetManagement, OMX, Quartal F life, TayburnKurumsal, Deutsche Boerse and Bloombergfor making this publication possible. We hopethat you will take a moment to visit ourcontributor section in the FEAS website atwww.feas.org and read their articles in thefollowing pages.In closing, I want to commend the efforts of allour Task Force members in achieving ourregional objectives through their commitmentand the Secretariat for its success inmaintaining our cohesive organization. As weclose our 13th year anniversary, I am happy tosay that our formula for achievement will beapplied toward our development for the future.PAGE 3