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SECURITIES MARKETAGENCYREPORT ON THE STATE AND SITUATION ON THEMARKET OF FINANCIAL INSTRUMENTS IN 2008LJUBLJANA, JUNE 2009

SECURITIES MARKETAGENCYCONTENTSINTRODUCTION ..................................................................................................................................................... 3BASIC FIGURES .................................................................................................................................................... 31 PRIMARY FINANCIAL INSTRUMENTS MARKET AND TAKEOVERS ............................................... 41.1 IPOS OF SECURITIES (PUBLIC PRIMARY MARKET) ..................................................................................... 41.2 ADMISSION OF SECURITIES TO TRADING ON A REGULATED MARKET ........................................................ 71.2.1 Takeover bids ..................................................................................................................................... 91.2.2 Issue of confirmations of collection of proxies ................................................................................. 111.3 EXEMPTIONS FROM THE OBLIGATION TO PUBLISH A PROSPECTUS (NON-PUBLIC PRIMARY MARKET) .... 111.4 ADMINISTRATION OF REGISTERS AND OTHER PUBLIC INFORMATION, AND MANDATORYANNOUNCEMENTS BY PUBLIC COMPANIES ........................................................................................................... 131.4.1 Public registers ................................................................................................................................ 131.4.2 Disclosure of information on the operations of public companies ................................................... 132 SECONDARY MARKET OF FINANCIAL INSTRUMENTS ................................................................... 142.1 TRADING IN FINANCIAL INSTRUMENTS ON REGULATED MARKETS ........................................................... 142.1.1 Admissions of financial instruments to the regulated market ........................................................... 142.1.2 Volume and breakdown of trading in financial instruments on the regulated market ..................... 152.1.3 Non-residents’ activity on the regulated market .............................................................................. 182.1.4 Block trades ...................................................................................................................................... 202.1.5 Stock exchange indices ..................................................................................................................... 202.1.6 Market capitalisation of financial instruments on the regulated market .......................................... 212.1.7 Most-heavily traded financial instruments on the regulated market ................................................ 222.2 CAPITAL ADEQUACY OF BROKERAGE COMPANIES ................................................................................... 232.3 CAPITAL EXPOSURE OF BROKERAGE COMPANIES ................................................................................... 242.4 LIQUIDITY OF BROKERAGE COMPANIES ................................................................................................... 243 INVESTMENT FUNDS ................................................................................................................................. 253.1 MUTUAL FUNDS ........................................................................................................................................ 253.2 INVESTMENT COMPANIES ......................................................................................................................... 313.3 INVESTMENT FUNDS FROM EU MEMBER STATES MEETING THE CONDITIONS FOR MARKETING AND SALEIN SLOVENIA 33 .................................................................................................................................................... 344 MUTUAL PENSION FUNDS ....................................................................................................................... 34REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 20082

SECURITIES MARKETAGENCYTable 3: Issued authorisations – approval of a simplified prospectus for sellingsecurities to the public in 2008TargetIssuer Type of security Value of issuecompany1. ZAVAROVALNICA TILIA, d.d., Novo no-par value sharesMestoEUR 1,500,022.55Total EUR 1,500,022.55Source: AgencyTable 4: Issued authorisations – approval of a prospectus for selling and resellingsecurities to the public in 2008TargetIssuer Type of security Value of issuecompany1. POZAVAROVALNICA SAVA, d.d.,Ljubljanano-par value sharesSLOVENSKA ODŠKODNINSKAEUR 6,255,000DRUŢBA, d.d., LjubljanaTotal EUR 6,255,000Source: AgencyTable 5: Public primary market, 1994 to 2008 (nominal value in EUR million)Bank securitiesSecurities of other issuersShare issues Debt securityissuesShare issues Debt securityissuesYear Number Nominal Number Nominal Number Nominal Number Nominal Totalvaluevaluevaluevalue1994 6 23.37 5 14.52 0 0 1 16.69 54.581995 5 2.64 7 18.82 3 1.55 2 2.93 25.941996 2 3.61 8 32.58 1 1.31 1 3.02 40.521997 0 0 5 34.06 2 1.35 1 4.17 39.581998 0 0 3 12.85 1 0.28 1 8.34 21.471999 0 0 3 13.84 1 3.25 3 11.29 28.382000 0 0 4 38.86 1 1.88 1 8.34 49.082001 0 0 1 8.99 0 0 0 0 8.992002 0 0 1 12.67 0 0 0 0 12.672003 0 0 1 16.81 0 0 0 0 16.812004 0 0 0 0 1 6.26 0 0 6.262005 0 0 0 0 0 0 0 0 02006 0 0 0 0 4 19.97 0 0 19.972007* 3 0 0 0 6 0 0 0 02008* 4 0 0 0 4 0 1 2 2Total 20 29.62 38 204.00 24 35.85 11 56.78 326.25Notes:*There are no data on the nominal value of share issues in 2007 and 2008, since shares were issued as no-parvalue shares.**Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.Source: AgencyREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 20085

SECURITIES MARKETAGENCYTable 6: Public primary market, 1994 to 2008 (issue value in EUR million)Bank securitiesSecurities of other issuersShare issues Debt securityissuesShare issues Debt securityissuesYear Number Issue Number Issue Number Issue Number Issue Totalvaluevaluevaluevalue1994 6 35.85 5 14.56 0 0 1 16.90 67.301995 5 4.87 7 17.98 3 3.73 2 2.95 29.531996 2 3.71 8 35.05 1 1.31 1 3.02 43.091997 0 0 5 34.08 2 1.85 1 4.17 40.101998 0 0 3 12.86 1 0.56 1 8.35 21.771999 0 0 3 13.85 1 4.24 3 11.38 29.472000 0 0 4 38.89 1 1.97 1 8.35 49.212001 0 0 1 8.99 0 0 0 0 8.992002 0 0 1 12.68 0 0 0 0 12.682003 0 0 1 16.81 0 0 0 0 16.812004 0 0 0 0 1 6.26 0 0 6.262005 0 0 0 0 0 0 0 0 02006 0 0 0 0 4 19.98 0 0 19.982007 3 438.73 0 0 6 114.56 0 0.00 553.292008 4 548.15 0 0 4 16.98 1 2 567.13Total 20 1,031.30 38 205.74 24 171.45 11 57.11 1,465.60Notes:*Issue values of primary issues are calculated on the basis of sale prices, which do not include discounts forquantity or interest (indexation or real).**Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 39.640.Source: AgencyIn addition to those issuers that require an authorisation from the Agency for a public offeringof securities, other public offerings have been made by the Slovenian state. The state does notrequire the Agency’s authorisation for a public offering.In 2008, the state held one public offering of bonds, no auctions for one-month treasury bills,nine auctions for three-month treasury bills, no auctions for six-month treasury bills, and noauctions for 12-month treasury bills.Table 7: Public offerings of government securities in 2008SecurityIssueno.Tendered value ofissue (in EUR)Subscribed valueof issue (in EUR)*Date of issueShort-term securities3-month TZ113 50,000,000 24.1.2008treasury bills˝ TZ114 50,000,000 20.3.2008˝ TZ115 50,000,000 24.4.2008˝ TZ116 50,000,000 19.6.2008˝ ZT117 50,000,000 24.7.2008˝ TZ118 50,000,000 18.9.2008˝ TZ119 30,000,000 23.10.2008˝ TZ120 30,000,000 20.11.2008˝ TZ121 30,000,000 18.12.2008Total short-term securities 390,000,00011-yearRS63Long-term securitiesREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 20086

SECURITIES MARKETAGENCYSecuritybondsIssueno.Tendered value ofissue (in EUR)Subscribed valueof issue (in EUR)*Date of issue1 st issue 1,000,000,000 6.2.2008Total long-term securities 1,000,000,000TOTAL SHORT-TERM AND LONG-TERM1,390,000,000GOVERNMENT SECURITIESNote:* The figures for total nominal value of securities issued are those entered in the depository at the CentralSecurities Clearing CorporationSource: AgencyTable 8: Public primary market of securities issues by the Bank of Slovenia and thegovernment, 1997 to 2008 (nominal value in EUR million)Securitiesof the Republic of SloveniaSecuritiesof the Bank of SloveniaShort-term Long-term Short-term Long-termYear Number Nominal Number Nominal Number Nominal Number Nominal Totalvaluevaluevaluevalue1997 0 0 2 41.73 4 146.05 0 0 187.781998 8 81.38 4 80.36 4 333.83 0 0 495.581999 12 134.92 1 26.31 5 170.06 0 0 331.292000 24 269.51 12 155.53 0 0 0 0 425.042001 53 790.54 12 218.20 0 0 0 0 1,008.732002 76 1,648.39 27 1,575.51 0 0 0 0 3,223.902003 76 1,580.91 10 663.27 0 0 0 0 2,244.192004 77 2,211.69 15 751.13 0 0 0 0 2,962.822005 72 2,092.18 22 1,724.80 0 0 0 0 3,816.982006 24 701.05 12 1,034.89 0 0 0 0 1,735.942007 11 550.00 1 298.50 0 0 0 0 848.502008 9 390.00 1 1,000.00 0 0 0 0 1,390.00Total 442 10,450.58 119 7,570.22 13 649.95 0 0 18,670.75Note:Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.Source: Agency1.2 Admission of securities to trading on a regulated marketIf there was no need to publish a prospectus upon the first sale of securities based on publicoffering, the issuers had to compile one upon the admission of the security to a regulatedmarket, for which they had to obtain a decision from the Agency on the approval of aprospectus (or simplified prospectus) for the admission of securities to trading on the regulatedmarket.In 2008, the Agency issued 15 decisions on the approval of a prospectus for the admission ofsecurities to trading on the regulated market and one decision on the approval of a simplifiedprospectus for the admission of securities to trading on the regulated market.REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 20087

SECURITIES MARKETAGENCYTable 9: Issued authorisations – approval of a prospectus for the admission of securitiesto trading on a regulated market in 2008No. Issuer Type of security Value of issue1. FINETOL, finančna druţba, d.d., no-par value sharesCelje2. FACTOR BANKA, d.d., Ljubljana registered bonds3. FACTOR BANKA, d.d., Ljubljana registered bonds4. PROBANKA d.d., Maribor registered bonds5. FACTOR BANKA, d.d., Ljubljana registered bondsEUR 4,250,025.04EUR 5,000,000.00EUR 12,155,000.00EUR 25,000,000.00EUR 13,090,000.006. DROGA KOLINSKA, Ţivilska registered bondsEUR 30,000,000.00industrija, d.d., Ljubljana7. DATALAB Tehnologije, d.d., Ljubljana no-par value shares EUR 444,493.318. BANKA CELJE, d.d., Celje registered bondsEUR 50,000,000.009. ZAVAROVALNICA TRIGLAV, d.d., no-par value sharesLjubljana10. FACTOR BANKA, d.d., Ljubljana registered bonds11. NOVA LJUBLJANSKA BANKA, d.d.,Ljubljanaregistered bonds12. NOVA LJUBLJANSKA BANKA, d.d., registered bondsLjubljana13. ABANKA VIPA, d.d., Ljubljana no-par value sharesEUR 23,701,391.79EUR 7,338,000.00EUR 125,000,000.00EUR 100,000,000.00EUR 102,000,000.0014. POTEZA SKUPINA, holding podjetje, bondsEUR 15,415,000.00d.d., Ljubljana15. PROBANKA d.d., Maribor registered bonds EUR 30,000,000.00Source: AgencyTable 10: Issued authorisations – approval of a simplified prospectus for the admissionof securities to trading on a regulated market in 2008No. Issuer Type of security Value of issue1. ALPETOUR, Potovalna agencija,d.d., KranjSource: Agencyno-par value shares EUR 934,868.97Table 11: Admission of securities to trading on a regulated market, 1994 to 2008(nominal value in EUR million)Bank securitiesSecurities of other issuersShare issues Debt securityissuesShare issues Debt securityissuesYear Number Nominal Number Nominal Number Nominal Number Nominal Totalvaluevaluevaluevalue1994 0 0 0 0.00 2 19.16 0 0 19.161995 0 0 0 0.00 0 0.00 0 0 01996 0 0 1 2.26 0 0.00 1 12.92 15.181997 0 0 2 7.63 4 31.94 1 8.68 48.251998 0 0 2 3.76 6 55.24 0 0 59.001999 0 0 2 23.55 5 23.77 1 9.06 56.382000 1 2.22 2 16.69 3 30.98 1 4.31 54.20REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 20088

SECURITIES MARKETAGENCYBank securitiesSecurities of other issuersShare issues Debt securityissuesShare issues Debt securityissuesYear Number Nominal Number Nominal Number Nominal Number Nominal Totalvaluevaluevaluevalue2001 0 0 4 41.22 0 0.00 0 0.00 41.222002 0 0 5 74.54 4 22.65 1 3.98 101.162003 0 0 6 224.43 4 18.59 1 38.87 281.892004 0 0 10 173.72 3 30.17 3 95.90 299.792005 0 0 12 334.62 9 178.76 6 169.12 682.502006 0 0 7 142.22 7 305.39 2 82.56 530.172007* 0 0 7 151.66 10 72.49 1 10.00 234.152008* 1 102.00 9 367.58 4 29.33 2 45.42 544.33Total 2 104.22 62 1,563.88 51 818.46 19 480.83 2,967.39Notes:*Data on the value of shares admitted to trading on a regulated market in 2007 and 2008 cannot be compared todata from previous years in terms of nominal value, since most of them were issued as no-par value shares withoutnominal value. Neither can they be evaluated at market value, since the market share of prices is determined afterthe shares have actually been traded on a regulated market. Therefore, the value of share issues from the years2007 and 2008, which were admitted to trading on a regulated market, is shown for the purpose of comparison inthe amount that reflects the value of share capital for which the shares admitted to trading on a regulated marketwere issued or in the amount which reflects the value of share capital by which the issuer's capital had beenincreased and later the listing expanded by shares (in cases the shares of previous issues of an individual issuerhave already been admitted to trading on a regulated market prior to capital increase).**Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.Source: Agency1.2.1 Takeover bidsIn 2008, the Agency issued 20 authorisations for takeover bids according to the Takeovers Act(Official Gazette of the Republic of Slovenia nos. 79/06, 67/07 – ZTFI and 1/08; hereinafter theZPre-1).Table 12: Authorisations for takeover bids in 2008No. Acquirer Target company Date ofpayment1. HAT, finančna in poslovnadruţba, d.o.o., Ljubljana,MEDALJON, upravljanjedrugih druţb, d.d., Maribor,PROBANKA, d.d., Maribor,SGP-KONGRAD-IGEMDravograd, proizvodnja,trgovina in storitve, d.d.,Šentjanţ pri Dravogradu2. AVTOTEHNA, zastopanje,trgovina, izvoz-uvoz, servis inproizvodnja, d.d., LjubljanaMEDALJON, upravljanjedrugih druţb, d.d., Maribor3. INFOND HOLDING, finančnadruţba, d.d., Maribor,CESTNO PODJETJEMARIBOR, druţba za gradnjoin vzdrţevanje cest, d.d.,Maribor, FIDINA, finančna innepremičninska storitev, d.d.,Ljubljana, KOTO, proizvodnoin trgovsko podjetje, d.d.,AVTOTEHNA, zastopanje,trgovina, izvoz-uvoz, servis inproizvodnja, d.d., LjubljanaZLATA MONETA II finančnadruţba, d.d., MariborPIVOVARNA LAŠKO, d.d.,LaškocashcashcashSuccessfulness/dateof decision onsuccessfulnesssuccessful, 22 February2008successful, 22 February2008successful, 14 March2008REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 20089

SECURITIES MARKETAGENCYNo. Acquirer Target company Date ofpaymentd.o.o., Ljubljana20. RETAIL CLIENTS TEKSTIL proizvodno in trgovskopodjetje, d.d., LjubljanaSource: AgencycashSuccessfulness/dateof decision onsuccessfulnesssuccessful, 12 January2009Table 13: Takeovers, 1998 to 2008 (in EUR million)Year Successful takeovers Failed takeoversYear Nominalvalue oftakeoversMarket valueof takeoversYear Nominal valueof takeoversMarket valueof takeovers1998 0 0 0 2 10.45 25.691999 8 35.52 58.12 1 6.05 14.532000 10 45.45 131.75 0 0 02001 14 101.66 500.55 0 0 02002 18 142.13 1,214.13 0 0 02003 7 26.11 71.35 0 0 02004 29 231.28 290.97 1 4.12 6.182005 20 125.24 261.31 2 28.15 34.812006 21 166.32 347.87 2 19.94 32.702007 33 8.52* 1,237.83 2 0 28.472008 20 0*** 237.95 0 0 0Total 180 882.24 4,351.81 10 68.72 142.40Notes:*In 2007, the nominal value of a takeover can only be determined in four cases, while in the rest of the cases thisinformation cannot be provided since shares were issued as no-par value shares without nominal value.**Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.***No data is available on the nominal value of takeovers in 2008 since shares were issued as no-par value sharesSource: Agency1.2.2 Issue of confirmations of collection of proxiesIn 2008, the Agency issued 29 confirmations of the collection of proxies for voting at thegeneral meeting of a plc.ZPre-1 also applies to those public limited companies whose shares with voting rights aretraded on the regulated market and those public limited companies whose shares are nottraded on the regulated market, if on the last day of the year preceding the year that is relevantfor the purpose of the assessment of the application of this Act the company has at least 250shareholders or an equity capital of at least EUR 4 million. The Agency issues theconfirmations of collection of proxies for voting at the general meeting to these companies.The ZPre-1 narrowed the scope of confirmations of the collection of proxies to the statedcompanies. In such cases, the Agency issues adequate confirmations to the persons whoannounce such an organised collection of proxies, while in the case of other public limitedcompanies, such authorisations are no longer issued since the institute of organised collectionof proxies is covered by the law regulating companies.1.3 Exemptions from the obligation to publish a prospectus (non-public primarymarket)The ZTFI offers a broad definition of the offer of securities to the public, stipulating that itmeans any communication in any form and by any means, presenting sufficient information onthe terms of the offer and the securities to be offered, so as to enable an investor to decide toREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200811

SECURITIES MARKETAGENCYpurchase or subscribe to these securities. Nevertheless, the examples described under thisitem substantially mean “non-public primary market.” In the financial sector, this term oftenapplies to those issuers of securities offered to a narrow or very specific group of investors andnot to the broad investment public.Article 36 of the ZTFI stipulates that no person is allowed to offer securities to the public in theRepublic of Slovenia without first publishing the appropriate prospectus in line with this act,unless otherwise specified by law in individual cases. Exemptions from the above provisionare stipulated by Article 49 of the ZTFI (e.g. issue of securities in a closed circle of up to 100persons who are not qualified investors etc.) and Article 50 of the ZTFI (e.g. issue of shares inthe process of merger, issue of substitute securities in the takeover procedure etc.). Whenexemptions from Articles 49 and 50 of the ZTFI are applied, the issuer must inform the Agencyof the application of such exemption.In 2008, the Agency received 35 notifications on the application of the exemption from thepublication of prospectus.Pursuant to Article 52 of the ZTFI, an issuer, offeror or the person demanding admission ofsecurities to trading on a regulated market must inform the Agency of the application ofexemption three business days before the beginning of the public offer or the admission ofsecurities to trading on a regulated market. This means that the Agency will not necessarilyreceive the notification of the issue value of securities to be sold and of the actual number ofoffered (issued) securities, which is why it has no data on the final value of issued securities.In 2008, there were 26 non-public issues of shares (four issues of bank shares and 22 issuesof corporate shares). Shares were issued in the form of no-par value shares without nominalvalue. The most frequent reasons for share issue were the following: increases in share capitalfrom a non-cash contribution, increases in share capital from the company’s own assets, debtto-equityconversions, mergers, and investment in new development programmes.There were also nine private placements of bonds, of which six were bank bond issues andthree were corporate bond issues. The total nominal value of the six private placements ofbank bonds was EUR 1,550.43 million, while that of the three private placements of corporatebonds was EUR 72.42 million. The most common reasons for bond issues were securing longtermsources of finance, replacing long-term sources of finance, and acquiring resources forthe purposes of investment strategy.REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200812

SECURITIES MARKETAGENCYTable 14: Non-public offerings of securities, 1997 to 2008(nominal value in millions of EUR)Bank securitiesSecurities of other issuersShare issues Debt securityissuesShare issues Debt securityissuesYear Number Nominal Number Nominal Number Nominal Number Nominal Totalvaluevaluevaluevalue1997 2 2.33 2 5.51 19 33.09 5 3.42 44.341998 0 0.00 2 4.91 3 2.46 3 0.58 7.961999 1 1.74 5 31.66 20 23.61 7 11.06 68.082000 0 0.00 5 28.57 26 123.48 7 15.45 167.502001 6 26.14 6 53.93 18 62.98 16 48.08 191.122002 4 6.90 7 74.60 31 69.85 8 27.99 179.342003 4 4.70 11 259.13 23 35.75 12 64.71 364.282004 3 7.21 16 435.52 17 51.08 11 131.64 625.462005 6 10.84 13 425.19 15 231.78 10 208.06 875.862006 4 18.05 8 126.47 16 39.21 9 28.49 212.222007* 8 0 8 220.59 19 0 3 30.58 251.172008* 4 0 6 1,550.43 22 0 3 72.42 1,622.85Total 42 77.91 89 3,216.51 229 673.29 94 642.48 4,610.18Notes:*There are no data on the nominal value of share issues in 2007, since shares were issued as no-par value shares.**Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.Source: Agency1.4 Administration of registers and other public information, and mandatoryannouncements by public companies1.4.1 Public registersThe Agency keeps a register of public companies, a register of issued authorisations for theapproval of prospectuses for the public offering of securities and prospectuses for theadmission of securities to trading on a regulated market, a register of issued authorisations fortakeover bids, a register of audited annual reports, semi-annual reports, summaries of thesereports, and reports of important business events or regulated information.1.4.2 Disclosure of information on the operations of public companiesThe number of public companies is constantly changing. At the end of 2008, there were 101companies that had the status of public companies that issued securities.In 2008, the Agency received 109 audited annual reports, and 109 summaries of auditedannual reports from public companies for the period from 1 January 2006 to 31 December2006.It also received 23 half-yearly reports and summaries of half-yearly reports from publiccompanies for the period from 1 January 2008 to 30 June 2008. All 23 public companieswhose shares are listed on the Ljubljana Stock Exchange also announced half-yearly interimresults.In 2008, public companies made 1,904 announcements of important business events orregulated information.REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200813

SECURITIES MARKETAGENCYIn 2008, the Agency received 461 notifications on reaching, exceeding and terminatedexceeding of 5-, 10-, 15-, 20-, 25–percent, 1/3, 50- and 75-percent shares of voting rights andnotifications on every acquisition or disposal of a share of voting rights by a member of thecompany’s management or supervisory body.The Agency received 81 annual documents to be produced by the issuers whose securitieswere admitted to trading on a regulated market at least once a year. An annual documentcontains or refers to all information published in the last 12 months in accordance with theprovisions regulating the area of securities in the Republic of Slovenia, other Member Statesand at the level of the EU or disclosed to the public in the Republic of Slovenia, other MemberStates and non-Member States.2 SECONDARY MARKET OF FINANCIAL INSTRUMENTS2.1 Trading in financial instruments on regulated marketsAt the end of 2008, there were 12 were brokerage companies on the market of financialinstruments (of which 11 were members of the Ljubljana Stock Exchange) that held anauthorisation from the Agency to provide investment services and 12 banks (of which 12 weremembers of the Ljubljana Stock Exchange) that held an authorisation from the Bank ofSlovenia to provide investment services and transactions. The list of subjects to which theAgency issued the authorisation to provide investment services and activities is shown in Table18.At the end of 2008, a total of 1,130 companies from the EU Member States provided directinvestment services and transactions related to financial instruments in the Republic ofSlovenia (on the basis of notification).2.1.1 Admissions of financial instruments to the regulated marketIn 2008, the shares of the following issuers were admitted to the share market segment –standard listing: Pozavarovalnica Sava, d.d., Ljubljana (symbol POSR); Zavarovalnica Triglav,d.d., Ljubljana (symbol ZVTG) and Abanka Vipa, d.d., Ljubljana (symbol ABKN). The shares ofthe following issuers were admitted to the share market segment – entry market: Sivent, d.d.,Ljubljana (symbol SING); Finetol, d.d., Celje (symbol FINR); D Naloţbe, d.d., Ljubljana(symbol DFNR) and Datalab, d.d., Ljubljana (symbol DATR).The bonds of the following issuers were admitted to the bond market segment: Republic ofSlovenia with the symbol RS63; Factor banka, d.d., Ljubljana with the symbols FB16, FB19,FB20 and FB21; Probanka, d.d., Maribor with the symbols PRB9 and PRB10; Droga Kolinska,d.d., Ljubljana with the symbol DRK1; Banka Celje, d.d., Celje with the symbol BCE11; DeloProdaja, d.d., Ljubljana with the symbol DPR1; Nova Ljubljanska banka, d.d., Ljubljana withthe symbols BDM1 and NLB24; Poteza Skupina, d.d., Ljubljana with the symbol PSN1 andSlovenska izvozna in razvojna banka, d.d., Ljubljana with the symbol SI01.The following mutual fund investment coupons were admitted to the investment couponsmarket: PB Biotech Index with the symbol PBDBI (issuer Probanka upravljanje, d.o.o.,Maribor); PB Uranium Index with the symbol PBDUI (issuer Probanka upravljanje, d.o.o.,Maribor); Infond Global with the symbol INDGL (issuer KBM Infond, druţba za upravljanje,d.o.o., Maribor) and Infond Dynamic with the symbol INDDY (issuer KBM Infond, druţba zaupravljanje, d.o.o., Maribor).REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200814

SECURITIES MARKETAGENCYThe shares of the issuer Merkur d.d. Naklo with the symbol MER were removed from theshare market segment – first listing. The shares of the following issuers were removed fromthe share market segment – standard listing: Geodetski zavod Slovenije, d.d., Trzin with thesymbol GZRG and the shares of the company ACH, d.d., Ljubljana with the symbol ACLG.The shares of the following issuers were removed from the share market segment – entrymarket: DZS, d.d., Ljubljana (symbol DZS); Tovarna sladkorja Ormoţ, d.d., Ormoţ (symbolTSOG); Hidrotehnik, d.d., Ljubljana (symbol VHLG); Etra 33, d.d., Ljubljana (symbol ETRG);Liz - inţeniring, d.d., Ljubljana (symbol LIZG); Krona holding, d.d., Ljubljana (symbol KRHR)and Jadran, d.d., Seţana (symbol JASG).The shares of the following investment companies were removed from the share market ofinvestment companies: Maksima ID with the symbol MAIR (issuer Maksima, delniška ID, d.d.,Ljubljana); Infond ID with the symbol IFIR (issuer Infond ID, d.d., Maribor) and Infond ID 1 withthe symbol IFDR (issuer Infond ID 1, d.d., Maribor).The bonds of the following issuers matured: Republika Slovenija with the symbols RS52,RS58 and RS39; Banka Celje, d.d., Celje with the symbol BCE6A; Factor banka, d d.,Ljubljana with the symbols FB13 and FB08; Nova Ljubljanska banka, d.d., Ljubljana with thesymbols NLB12 and NLB14; Stanovanjski sklad RS, javni sklad, Ljubljana with the symbolSSR2; Probanka, d.d., Maribor with the symbol PRB6; Abanka Vipa, d.d., Ljubljana with thesymbols AB13 and VIP5 and Poštna banka Slovenije from the banking group of Nova Kreditnabanka Maribor, d. d, Maribor with the symbol PBS5.Table 15: Number of financial instruments on the regulated marketShares Bonds IF TotalSituation as of 31 December 2007 89 89 10 188New FI in 2008 7 14 4 25Removed FI in 2008 10 13 3 26Changed FI in 2008 -3 1 1 -1Situation as of 31 December 2008 86 90 11 187Source: Ljubljana stock exchange2.1.2 Volume and breakdown of trading in financial instruments on the regulatedmarketThe volume of trading in shares of public companies was up 68.6% in 2008 compared to 2007,while the volume of trading in bonds was up 52.9%.REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200815

SECURITIES MARKETAGENCYTable 16: Turnover of financial instruments traded on the regulated marketYearShares Bonds IFVolume of turnover (in EUR billion)PensioncouponsLong-termfinancialinstrumentsShort-termfinancialinstruments1995 0.19 0.09 0.00 0.00 0.28 0.08 0.361996 0.28 0.06 0.00 0.00 0.34 0.03 0.371997 0.37 0.05 0.00 0.00 0.42 0.04 0.461998 0.56 0.09 0.04 0.00 0.69 0.03 0.721999 0.70 0.15 0.22 0.01 1.08 0.03 1.112000 0.61 0.24 0.26 0.01 1.12 0.01 1.132001 0.99 0.22 0.23 0.01 1.45 0.01 1.462002 1.16 0.46 0.36 0.02 2.00 0.00 2.002003 0.62 0.54 0.25 0.00 1.41 0.00 1.412004 0.93 0.47 0.25 0.00 1.65 0.00 1.652005 0.94 0.75 0.15 0.00 1.84 0.00 1.842006 1.45 0.19 0.17 0.00 1.81 0.00 1.812007 3.03 0.17 0.18 0.00 3.38 0.00 3.382008 0.95 0.26 0.08 0.00 1.29 0.00 1.29Note:Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.Source: Ljubljana Stock ExchangeIn the turnover structure for 2008 compared to 2007, bonds gained 14.9 percentage pointswhile the percentage of share turnover dropped by 15.5 percentage points.Table 17: Structure of turnover of financial instruments traded on the regulated marketYear Proportion of total volume (%)PensionShares Bonds IFcouponsShort-term FI Total1995 51.4 25.8 0.0 0.0 22.8 100.01996 77.1 15.2 0.0 0.0 7.7 100.01997 80.9 10.6 0.0 0.0 8.5 100.01998 77.2 12.7 5.8 0.0 4.3 100.01999 63.4 13.3 20.3 0.6 2.4 100.02000 53.9 20.9 23.3 0.7 1.2 100.02001 68.0 14.8 15.9 0.5 0.8 100.02002 58.0 23.0 17.8 1.1 0.1 100.02003 43.9 38.1 17.9 0.0 0.1 100.02004 56.3 28.6 15.1 0.0 0.0 100.02005 51.1 40.8 8.1 0.0 0.0 100.02006 80.2 10.4 9.4 0.0 0.0 100.02007 89.6 5.1 5.3 0.0 0.0 100.02008 74.1 20.0 5.9 0.0 0.0 100.0Source: Ljubljana Stock ExchangeA total of 249,679 transactions were concluded in 2008, which means an average of 998transactions per trading day, while the number of transactions in 2007 was 282,939. Thenumber of transactions in 2008 dropped by 13.2 % compared to 2007. The average dailyvolume was EUR 5.13 million in 2008, which is 43.3% less than in 2007. The average value ofTotalREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200816

Turnover (in EUR million)SECURITIES MARKETAGENCYa transaction (trade) was EUR 4,907 in 2008, which is EUR 2,964 less than in 2007. Themajority of trades in 2008 were in shares (84.71%), followed by IF shares (13.13%), andbonds (2.16%).Figure 1: Breakdown of trading volume on the regulated market in 2008200Shares Bonds IF150100500jan feb mar apr may jun jul aug sept oct nov decSource: Ljubljana Stock ExchangeTable 18: Turnover of the members of the Ljubljana Stock Exchange by type of financialinstrument in 2008Exchange memberShares(in EUR)Bonds(in EUR)Invest. funds(in EUR)Total turnover(in EUR)Share oftotalvolumeABANKA VIPA d.d. 172,507,970 68,444,947 11,453,742 252,406,659 9.82 %UNICREDIT BANKA SLOVENIJA d.d. 216,020,509 23,587,914 721,600 240,330,023 9.35 %GBD Gorenjska borzno posredniška druţba d.d. 147,174,679 14,553,234 29,642,404 191,370,318 7.44 %NOVA LJUBLJANSKA BANKA d.d. 93,832,867 83,564,319 4,962,474 182,359,660 7.09 %ILIRIKA BPH d.d. 123,277,027 29,210,672 9,412,307 161,900,005 6.30 %POTEZA, borzno posredniška druţba, d.d. 120,320,233 9,638,958 13,989,280 143,948,471 5.60 %CERTIUS BPH d.o.o. 114,707,118 9,808,564 13,656,989 138,172,672 5.37 %SKB BANKA d.d. 94,045,358 33,601,828 379,189 128,026,376 4.98 %ARGONOS borzno posredniška hiša d.o.o. 115,696,997 1,359,118 8,269,541 125,325,656 4.87 %RAIFFEISEN BANKA d.d. 72,295,611 39,724,747 5,939,254 117,959,612 4.59 %PERSPEKTIVA BPD d.d. 39,194,770 71,657,922 2,293,074 113,145,766 4.40 %NOVA KREDITNA BANKA MARIBOR d.d. 68,072,578 25,095,453 9,368,045 102,536,075 3.99 %MEDVEŠEK PUŠNIK BPH d.d. 88,404,033 4,989,357 5,581,862 98,975,253 3.85 %HYPO ALPE-ADRIA-BANK d.d. 79,682,880 1,738,628 1,096,225 82,517,733 3.21 %REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200817

SECURITIES MARKETAGENCYExchange memberShares(in EUR)Bonds(in EUR)Invest. funds(in EUR)Total turnover(in EUR)Share oftotalvolumeKD BPD d.o.o. 66,297,458 12,725,659 900,807 79,923,924 3.11 %PROBANKA d.d. 51,647,865 13,228,444 13,298,693 78,175,003 3.04 %FACTOR BANKA d.d. 51,049,098 21,663,082 3,225,538 75,937,718 2.95 %PUBLIKUM investicijske storitve d.d. 65,402,855 1,385,329 637,134 67,425,317 2.62 %DEŢELNA BANKA SLOVENIJE d.d. 50,303,900 4,554,766 4,649,197 59,507,863 2.31 %PRIMORSKI FINANČNI CENTER INTERFIN d.o.o. 34,814,122 1,261,693 10,277,302 46,353,117 1.80 %GORENJSKA BANKA d.d. 2,239,914 34,980,090 155,781 37,375,785 1.45 %VERITAS B.H. borzno posredniška hiša, d.o.o.* 11,912,813 5,877,564 1,337,441 19,127,818 0.74 %BANKA KOPER d.d. 13,405,620 1,089,115 491,300 14,986,036 0.58 %MOJA DELNICA BPH d.d. 12,849,850 257,838 686,452 13,794,139 0.54 %Total 1,905,156,124 513,999,239 152,425,633 2,571,580,996 100.00 %Note:*Veritas BH discontinued its operations in 2008.Source: Ljubljana Stock Exchange, Securities Market Agency2.1.3 Non-residents’ activity on the regulated marketTable 19: Volume (EUR million) and breakdown of trading in shares on the regulatedmarket by non-residentsTotal turnover in Non-residents’ Non-residents’ share Net purchases byYearsharesvolume(%)non-residents2003 877.0 49.7 5.7 2.22004 1,181.2 78.5 6.6 -1.62005 1,090.0 90.6 8.3 41.42006 1,616.9 262.1 16.2 54.62007 3,158.3 870.3 27.6 -40.02008 1,013.7 419.3 41.4 -91.7Note:Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.Source: Bank of SloveniaThe share of non-residents in the ownership of Slovene companies at the end of December2008 reached 7.06%, which is 1.19 percentage points more than at the end of 2007.REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200818

Share (in %)SBI20 (in points)Change SBI20 (inv %)Net turnover (in million EUR)SECURITIES MARKETAGENCYFigure 2: Net purchases by non-residents on the regulated market and change in theSBI 20 share index in 2007 and 2008201510Net purchases of non-residents and change in SBI20change SBI20net purchases of non-res. on reg. market4020500-5jan.07 mar.07 maj.07 jul.07 sep.07 nov.07 jan.08 mar.08 maj.08 jul.08 sep.08 nov.08-10 feb.07 apr.07 jun.07 avg.07 okt.07 dec.07 feb.08 apr.08 jun.08 avg.08 okt.08 dec.08-20-40-15-20-60-25-80Source: Bank of Slovenia, Ljubljana Stock ExchangeFigure 3: Proportion of total share capitalisation held by non-residents on the regulatedmarket, and movement of the SBI 20 in 2007 and 20087,57,37,16,96,76,56,36,15,95,75,55,35,14,94,74,5Share of non-residents in market capitalization of shares and value of the SBI20 share indexShare (in %)SBI20jan.07 mar.07 maj.07 jul.07feb.07 apr.07 jun.07 avg.07 sep.07 nov.07 jan.08 mar.08 maj.08okt.07 dec.07 feb.08 apr.08 jun.08jul.08 sep.08 nov.08avg.08 okt.08 dec.0812.50011.50010.5009.5008.5007.5006.5005.5004.5003.500Source: Ljubljana Stock ExchangeREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200819

SECURITIES MARKETAGENCY2.1.4 Block tradesIn 2008, there were 217 block trades, which is 79.3% less than in 2007, and 83.0% less than in2006. The block trade volume totalled EUR 219 million in 2008: 81.8 % less than in 2007, and73.1 % less than in 2006.Block trades accounted for 17.0 % of the total volume on the Ljubljana Stock Exchange,compared with 35.6 % in 2008, and 45.0 % in 2007. The average value of a block trade in2008 was EUR 1.01 million, 11.8 % less than in 2007, and 57.8 % more than in 2006.Table 20: Block trades, 2006 to 2008 (broken down by trade value)2006 2007 2008No. ofNo. ofNo. ofNo. of tradesShareShareSharetradestradestradesup to EUR 0.125 million 4 0.31% 5 0.48% 0 0.00%from EUR 0.125 million to EUR 0.167 million 272 21.35% 214 20.36% 29 13.36%from EUR 0.167 million to EUR 0.209 million 157 12.32% 117 11.13% 27 12.44%from EUR 0.209 million to EUR 0.250 million 134 10.52% 86 8.18% 21 9.68%from EUR 0.250 million to EUR 0.334 million 157 12.32% 126 11.99% 13 5.99%from EUR 0.334 million to EUR 0.417 million 100 7.85% 84 7.99% 11 5.07%from EUR 0.417 million to EUR 0.835 million 246 19.31% 217 20.65% 47 21.66%from EUR 0.835 million to EUR 2.086 million 136 10.68% 123 11.70% 47 21.66%from EUR 2.086 million to EUR 4.173 million 37 2.90% 28 2.66% 14 6.45%above EUR 4.173 million 31 2.43% 51 4.85% 8 3.69%Total 1,274 100.00% 1,051 100.00% 217 100.00%Note:Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.Source: Agency2.1.5 Stock exchange indicesThe value of the SBI 20 stock exchange index point stood at 3,695.72 at 31 December 2008,down 67.49 % or 7,673.86 points from a year earlier (when the value of the SBI 20 index was11,369.58). It peaked at 11,408.00 on 4 January 2008. The lowest values of the index wererecorded in October (-18.69%) and September (-16.15%).REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200820

Turnover (in EUR million)SBI 20 (in points)SECURITIES MARKETAGENCYFigure 4: The Slovene stock exchange index SBI 20 in 2008Share turnover on stock market (excluding blocks) and SBI 20 index20012.000180share turnoverSBI201601401201008060402011.00010.0009.0008.0007.0006.0005.0004.00003.000jan.08 feb.08 mar.08 apr.08 may.08 jun.08 jul.08 aug.08 sep.08 oct.08 nov.08 dec.08Source: Ljubljana Stock ExchangeThe SBI 20 is regularly revised twice a year, on 1 March and 1 September. Since 3 February1997, the value of the SBI 20 has been calculated as a series of market prices for a selectedbasket of shares. It consists of the capitalisations of individual shares, adjusted by a factor thatensures comparability between periods despite the inclusion and omission of individual sharesthat make up the index. To be included in the SBI 20 ordinary shares must meet certain criteriarelating to the market capitalisation of the shares in free circulation, the average absolute dailyvolume and the average number of daily trades. A single issuer may not account for more than15% of the capitalisation of the basket of shares making up the SBI 20.The shares of 15 issuers were included in the SBI 20 as of 31 December 2008: Krka, d.d.,Novo mesto; Petrol, d.d., Ljubljana; Telekom Slovenije, d.d., Ljubljana; Sava, d.d., Kranj;Mercator, d.d., Ljubljana; Nova KBM, d.d., Maribor; Gorenje, d.d., Velenje; ZavarovalnicaTriglav, d.d., Ljubljana; Luka Koper, d.d., Koper; Pivovarna Laško, d.d., Laško;Pozavarovalnica Sava, d.d., Ljubljana; Helios, d.d., Domţale; Intereuropa, d.d., Koper;Istrabenz, d.d., Koper and Aerodrom Ljubljana, d.d., Ljubljana.On 18 July 2008, the Ljubljana Stock Exchange stopped calculating the share index of(authorised) investment companies (PIX) and on 1 October 2008 also the stock exchangeindex of bonds (BIO).The value of most of the major global indices dropped in 2008; the largest fall of 42.1% beingrecorded by the NIKKEI 225. The next-largest decrease of 40.4% was recorded by the DAX30. The NYSE’s US 100 dropped by 36.3%, while the FTSE 100 finished the year down 31,3%.2.1.6 Market capitalisation of financial instruments on the regulated marketThe total market capitalisation of financial instruments on the Ljubljana Stock Exchange,calculated as the price of financial instrument multiplied by the number of listed financialinstruments) amounted to EUR 15.26 billion at the end of 2008 (IF not included), which is adecrease of 40.6% on a year earlier. Total market capitalisation of all shares on the stockexchange (IF not included) stood at EUR 8.47 billion at the end of December 2008, which is57.1% less than at the end of December 2007. This fall in the market capitalisation of shareswas the result of a fall in share prices on the Ljubljana Stock Exchange. Total marketREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200821

SECURITIES MARKETAGENCYcapitalisation of bonds stood at EUR 6.79 billion at the end of December 2008, up 14.4% froma year earlier, when it amounted to EUR 5.94 billion, primarily because of new issues ofbonds.Table 21: Market capitalisation of financial instruments on the Ljubljana StockExchange (EUR million)31. 12. 2006ShareShareShare31. 12. 200731. 12. 2008(in %)(in %)(in %)Share Market 11,513.08 60.75 19,740.12 73.48 8,468.42 54.22First listing 5,999.37 31.66 12,312.43 45.83 4,151.22 26.58Standard listing 3,796.56 20.03 4,569.26 17.01 2,589.28 16.58Entry market 1,717.15 9.06 2,858.43 10.64 1,727.92 11.06Bond Market 6,631.58 34.99 5,940.80 22.11 6,795.36 43.51Investment Fund Market 806.85 4.26 1,183.49 4.41 353.70 2.26Investment Coupon Market 113.43 0.60 161.92 0.60 129.75 0.83IC Share Market 693.42 3.66 1,021.57 3.80 223.95 1.43Total 18,951.51 100.00 26,864.41 100.00 15,617.48 100.00Source: Ljubljana Stock Exchange2.1.7 Most-heavily traded financial instruments on the regulated marketThe ten most-heavily traded shares in 2008 accounted for 86.00% of the total volume oftrading in shares, compared with 83.93 % in 2007. This represents an increase in theconcentration of trading in the ten most-heavily traded shares. The largest turnover, includingblocks, was recorded in the shares of Krka, Telekom Slovenije and Nova KBM. IF shares wereexcluded.Table 22: Ten most-heavily traded shares on the regulated market in 2008No. Share Turnover (in EUR)Proportion of total volumeof shares* (%)Turnover ratio**1. Krka 394,239,113 41.39 0.232. Telekom Slovenije 78,879,595 8.28 0.103. Nova KBM 74,250,148 7.79 0.304. Petrol 55,476,883 5.82 0.105. Mercator 53,502,016 5.62 0.096. Gorenje 46,021,588 4.83 0.317. Pivovarna Laško 37,941,282 3.98 0.098. Luka Koper 35,745,816 3.75 0.129. Sava 25,356,771 2.66 0.0510. Aerodrom Ljubljana 17,787,892 1.87 0.37Total 819,201,104 86.00 0.15Other shares 133,376,958 14.00 0.04ALL SHARES 952,578,062 100.00 0.11Notes:* Excluding IF shares.** Turnover is calculated as the ratio of the annual volume of trading in a financial instrument to its marketcapitalisation on the last day of the period.Source: Ljubljana Stock Exchange, Securities Market AgencyThe ten most-heavily traded bonds accounted for 82.72% of the total volume of trading inbonds in 2008, compared with 81.17% in 2007. The most-heavily traded was the second-issuebond of the Slovenian Indemnity Fund.REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200822

SECURITIES MARKETAGENCYTable 23: Ten most-heavily traded bonds on the regulated market in 2008No.BondTurnover(in EUR)Proportion of totalvolume (%)Turnoverratio*1. Slovenian Indemnity Fund 2 nd issue 81,368,172 31.66 0.122. Republic of Slovenia 56 th issue 32,775,918 12.75 0.163. Republic of Slovenia 59 th issue 21,236,813 8.26 0.024. Republic of Slovenia 60 th issue 18,171,579 7.07 0.055. Republic of Slovenia 57 th issue 13,734,006 5.34 0.056. NLB 16 th issue 11,358,592 4.42 0.367. Republic of Slovenia 53 rd issue 10,851,961 4.22 0.148. Republic of Slovenia 63 rd issue 9,830,213 3.82 0.019. Republic of Slovenia 21 st issue 7,835,906 3.05 0.2310. Nova KBM 7 th issue 5,416,424 2.11 0.19Total 212,579,584 82.72 0.06Other bonds 44,420,035 17.28 0.01ALL BONDS 256,999,619 100.00 0.04Note:* Turnover is calculated as the ratio of the annual volume of trading in a financial instrument to its marketcapitalisation on the last day of the period.Source: Ljubljana Stock Exchange, Securities Market AgencyIn 2008, there were seven ICs and seven MFs traded on the regulated market. Of totalturnover in IF, 40.3% was generated by the most heavily traded ID NFD 1 (including blocktrading).Table 24: Turnover in shares/IF investment coupons on the regulated market in 2008No. IF Turnover in EURProportion of totalvolume of IF shares(in %)Turnoverratio*1. NFD 1 share investment fund 30,733,671 40.31 0.222. KD IC 9,796,540 12.85 0.293. Probanka Global investment fund (MF) 9,784,712 12.83 0.214. Infond IC 9,232,030 12.11 0.105. Krona Senior IC 3,868,393 5.07 0.106. Maksima IC 3,373,793 4.43 0.047. MP-BALKAN.SI (MF) 3,355,895 4.40 0.378. Zvon Ena IC 2,284,317 3.00 0.159. Infond IC 1 1,847,651 2.42 0.0610. Infond Global (MF) 982,568 1.29 0.02Total 75,259,570 98.71 0.14Other shares/IF inv. coupons 982,568 1.29 0.04ALL SHARES/IF INV. COUPONS 76,242,138 100.00 0.13Note:* Turnover is calculated as the ratio of the annual volume of trading in a financial instrument to its marketcapitalisation on the last day of the period.Source: Ljubljana Stock Exchange, Securities Market Agency2.2 Capital adequacy of brokerage companiesA brokerage company must ensure that at any point of time it maintains sufficient capital withregard to both the volume and type of investment and financial instrument services that itREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200823

SECURITIES MARKETAGENCYprovides, and to the risks to which it is exposed in providing these services. The share capitalof a brokerage company may never fall below EUR 730,000, with the exception of the casestipulated by Article 153 of the ZTFI.At the end of 2008, the sum of capital requirements of brokerage companies averaged EUR0.71 million, which is 42.7% less than at the end of 2007. Average capital of brokeragecompanies grew to 8.3% in the same period.Table 25: Capital adequacy of brokerage companies (average)Average capital adequacy of brokerage companies31. 12. 2005 31. 12. 2006 31. 12. 2007 31. 12. 2008EUR 0.73 EUR 0.68 EUR 1.24TOTAL CAPITAL REQUIREMENTEUR 0.71 millionmillionmillionmillionEUR 2.18 EUR 1.96 EUR 2.88CAPITALEUR 3.12 millionmillionmillionmillionTOTAL CAPITAL REQ./CAPITAL 0.34 0.35 0.43 0.23Note:Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.Source: Agency2.3 Capital exposure of brokerage companiesA brokerage company’s exposure to an individual entity is the sum of all its receivables andcontingent receivables from that entity, the value of its investments in financial instruments ofthat entity, and the value of its other equity holdings in that entity. A brokerage company’sexposure to an individual entity and parties related to that entity may not exceed 25% of thebrokerage company’s capital.Any exposure of a brokerage company to an individual entity and its related parties thatexceeds 10% of the brokerage company’s capital is classed as a large exposure. The sum ofall large exposures of a brokerage company may not exceed 800% of the amount of thecompany’s capital.At the end of 2008 the average total large exposures/capital ratio amounted to EUR 36.5 or37% less than at the end of 2007.Table 26: Ratio of total of large exposures to capital (average)31. 12. 2005 31. 12. 2006 31. 12. 2007 31. 12. 2008TOTAL OF LARGE EXPOSURES / CAPITAL 77.6 63.2 57.9 36.5Source: Agency2.4 Liquidity of brokerage companiesBrokerage companies must manage their assets and liabilities so as to be able, at any point intime, to settle all their due debts. The minimum liquidity ratio allowed is 1.0. At the end of2008, the average liquidity ratio of brokerage companies was 13.18, which was 71.4% morethan at the end of 2007.Table 27: Liquidity ratio of brokerage companies (average)31. 12. 2005 31. 12. 2006 31. 12. 2007 31. 12. 2008REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200824

SECURITIES MARKETAGENCYLIQUIDITY RATIO 6.44 7.58 7.69 13.18Source: Agency3 INVESTMENT FUNDSIn 2008, the global financial crisis caused a fall in the prices on global stock exchanges andconsequently an extreme plunge in the value of investment fund assets. In Europe as well asin Slovenia, the downward trend in the value of investment fund assets started showing asearly as in January 2008 and continued throughout 2008. The assets of European investmentfunds thus dropped by 22% in 2008, compared to the previous year, to EUR 6,142 billion. Inthe same period, the assets of the Slovene investment funds fell further, specifically by 54% toEUR 1,912 million.As of 31 December 2008, there were 4 ICs and 14 MCs active in Slovenia, which managed127 MF, of which 17 were newly-founded in 2008. There were also 137 investment funds orsub-funds registered from other European Union Member States.Table 28: General data on investment funds at the end of the years 2007 and 200831. 12. 2007 31. 12. 2008MC MF ICIFs from EUMemberStatesMC MF ICIFs from EUMemberStatesNumber of entities 14 110 7 128 14 127 4 137Number of investors - 321,628 226,845 n.a. - 397,472 114,991 n.a.Value of assets (in- 2,924 1,235 n.a. - 1,513 398 n.a.millions of EUR)Source: Agency3.1 Mutual fundsAt the end of 2008, the net value of assets of Slovene MFs totalled EUR 1,505.3 million or48% less than at the end of 2007. The reason for this is in the fall of the prices of securities oncapital markets, the movement of exchange rates and net outflows from MFs.Table 29: Net asset value of MFs by year (in million EUR)31. 12. 2003 31. 12. 2004 31. 12. 2005 31. 12. 2006 31. 12. 2007 31. 12. 2008Total 387.2 867.2 1,376.6 1,920.8 2,908.2 1,505.3Note:Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.Source: AgencySlovene investors still show great willingness to assume risk related to investments in MFs, asevident from the comparison of the structure of MF types between Slovenia and Europe (Table30). In Slovenia, share MFs accounted for almost 63% of total funds, while bond MFs reachedmerely 2% and the shares of money market MFs only 1%. Also at the European level, shareMFs represented the largest share in total managed assets, specifically 31% in 2008.Nevertheless, the share of individual types of European MFs was far more equally spread,since the share of bond MFs and money market MFs together accounted for 49% and theshare of mixed MFs for 16%.REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200825

SECURITIES MARKETAGENCYWe must explain that according to the Bank of Slovenia, household assets in Slovenia placedin investment funds only accounted for 6% in the structure of household financial property atthe end of the third quarter of 2008, while the share of bank deposits and cash of householdsaccounted 49% in the structure of household financial property. At the end of the third quarterof 2008, 8% of assets in the structure of household financial property were placed ininvestment funds and 35% in bank deposits and cash.Table 30: Share of individual types of MFs in total assets of MFs at the end of 2007 and200831. 12. 2007 31. 12. 2008Slovenia Europe Slovenia EuropeNumber of share MFs 68 % 47 % 63 % 31 %Number of bond MFs 1 % 16 % 2 % 23 %Number of mixed MFs 31 % 10 % 34 % 16 %Number of money-market MFs 0 % 19 % 1 % 26 %Number of MFs – other funds 0 % 8 % 0 % 5%Source: Agency, EFAMA, Bank of SloveniaTable 31 shows the net values of MF assets managed by MCs at the end of 2008, The largemajority of assets was managed by Triglav DZU, i.e. EUR 338 million or 25%, followed by KDSkladi, which managed 18% of total assets and NLB skladi with 16% of total assets. It mustalso be pointed out that a significant portion of the increase in the share of net value ofmanaged assets by KBM Infond and NLB Skladi is due to the transformation of ICs into MFs in2008. Maksima ID was transformed into NLB Skladi – Globalni delniški sklad, Infond ID intoDelniški VS Infond Dynamic and Infond ID 1 into Delniški VS Infond Global.Table 31: Market shares of individual MSc in MF management as of 31 December 2008,measured with the net value of managed assetsMCNet value of managedassets (NAV) (in EUR)Share (in %)Number of MFs undermanagementTriglav DZU, d.o.o. 337,973,202 22.45 10KD Skladi, d.o.o. 267,611,282 17.78 17NLB Skladi, d.o.o. 236,015,152 15.68 14KBM Infond, d.o.o. 168,672,809 11.20 10Probanka upravljanje, d.o.o. 112,886,945 7.50 9Publikum PDU, d.d. 77,523,657 5.15 11Abančna DZU, d.o.o. 69,196,525 4.60 11Medvešek Pušnik DZU, d.d. 55,087,331 3.66 11Ilirika DZU, d.o.o. 53,055,560 3.52 10Primorski skladi, d.d. 51,533,098 3.42 4Perspektiva DZU, d.o.o. 49,147,807 3.26 7Krekova DZU, d.o.o. 18,925,463 1.26 5NFD DZU, d.o.o. 7,710,471 0.51 8Total 1,505,339,303 100.00 127Source: AgencyAs evident from Table 32, mutual funds invest predominantly in equity securities traded onregulated securities markets. These investments amounted to slightly above EUR 1 billion atthe end of 2008, or 68% of the total. EUR 703 million or 46% of all MF assets were invested inREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200826

SECURITIES MARKETAGENCYequity securities from foreign issuers. Their share continues to increase on an annual basisand accounted for 58% of total MF investments at the end of 2008.Table 32: Aggregate structure of investments in MF as of 31 December 2008in EUR in %1. Cash 93,900,147 6.202. Deposits and loans 67,193,823 4.443. Securities and money market instruments traded on the regulated market ofsecurities1,212,105,118 80.093.1 Securities issued by domestic issuers 420,240,315 27.773.1.1 Equity securities issued by domestic issuers 319,636,780 21.123.1.2 Debt securities issued by domestic issuers 100,603,536 6.653.1.3 Other securities issued by domestic issuers 0 0.003.2. Securities issued by foreign issuers 789,941,385 52.203.2.1 Equity securities issued by foreign issuers 702,987,086 46.453.2.2 Debt securities issued by foreign issuers 86,954,299 5.753.2.3 Other securities issued by foreign issuers 0 0.003.3. Money market instruments traded on a regulated securities market 1,923,417 0.133.3.1 Money market instruments of domestic issuers 874,015 0.063.3.2 Money market instruments of domestic issuers 1,049,403 0.074. Money market instruments of prime issuers 0 0.005. Investment coupons and shares of open investment funds 74,766,666 4.946. Combined and derived financial instruments 2,340 0.007. Other transferable securities and other money market instruments 60,004,392 3.968. Receivables 5,266,695 0.359. Prepayments and accrued income 141,236 0.0110. Total 1,513,380,416 100.00Source: AgencyFigure 5: Aggregate structure of MF investments at the end of 2008 (in %)IK in delnice odprtih IS4.94%Securities and moneymarket instrumentsof domestic issuers27.83%Other transferable securitiesand other money market instr.3.96%Receivables anddeferred/accrued items0.36%Cash assets6.20%Deposits and loans4.44%Securities and money market instrumentsof foreign issuers52.27%Source: AgencyThe number of investors in MFs is increasing every year and amounted to 397,472 at the endof 2008, which is a 24% increase over a year earlier; nevertheless, it must be said that theREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200827

Number of investorsSECURITIES MARKETAGENCYincrease in the number of investors in MFs is merely the result of the transformation of threeICs into MFs. The concentration of investors was reduced compared to 2007, since there were22% of all investors in three MFs in 2008, in terms of NAV (33% in 2007). The average valueof assets in Slovene MFs per capita stood at around EUR 750; in Europe, the average percapita is somewhat under EUR 10,000.Figure 6: Number of investors in MFs, December 2003 to December 2008450.000400.000350.000300.000250.000200.000150.000100.00050.0000dec.03 jun.04 dec.04 jun.05 dec.05 jun.06mar.04mar.05 sep.05 sep.06 dec.06 jun.07 dec.07 jun.08 dec.08sep.04mar.06 mar.07 sep.07 mar.08 sep.08Source: AgencyAs shown in Figure 7, the inflows in Slovene MFs in 2008 amounted to EUR 307 million andthe outflows amounted to EUR 611 million. Thus, in 2008, net outflows totalled EUR 304million, which represents 10% of the value of assets in Slovene MFs at the end of 2007.In European MFs, a total of EUR 335 billion of net outflows were recorded, i.e. 5% of the valueof assets in European MFs at the end of 2007.REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200828

Value (in million of EUR)Value (in million of EUR)SECURITIES MARKETAGENCYFigure 7: Annual purchases and redemptions of MFs, 2003 to 2008 (in million of EUR)1.000800600purchasesredemptionsnet purchases4002000-2002003 2004 2005 2006 2007 2008-400Note:Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.Source: AgencyThe largest net outflow of assets from Slovene MFs was recorded in October 2008; that was24% of total net outflows in 2008 (Figure 8). Also in October, 40% of total net outflows fromEuropean MFs in 2008 was recorded.Figure 8: Monthly purchases and redemptions of MFs, January 2008 to December 2008(in million of EUR)120100806040purchasesredemptionsnet purchases200-20jan.08 feb.08 mar.08 apr.08 may.08 jun.08 jul.08 aug.08 sep.08 oct.08 nov.08 dec.08-40-60-80Source: AgencyThe annual returns on MFs, measured with the change in unit price (UP), ranged from -70% to5%. The weighting used to calculate the weighted average annual return is the ratio of aparticular fund’s assets to the total assets of mutual funds. The average decrease in UP,compared to the change in the index of SBI 20 shares, in 2008 was by 25 percentage pointslower, as a result of the placement of assets to certain foreign markets. Only six MFs recordedREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200829

SECURITIES MARKETAGENCYunit price growth in 2008. All of those were bond MFs or money market MFs. When comparingthe nominal weighted return on MFs with the movement of the SBI 20, it should be noted thatthe SBI 20 ignores the dividends on the shares and that shares included in the index; onlysome of the securities that mutual funds hold are shares included in the SBI 20. Of course,neither the SBI 20 nor the unit price calculation takes account of the costs to the individualinvestor. Increasing specialisation of Slovene MFs both regionally and by industrial branchesimpacts the growing differences in the returns of individual MFs.Figure 9: Movement in the weighted average of annual changes in UP and changes inSBI 20 and SBI TOP indices in 2008100,0080,0060,0040,0020,000,00-20,00-40,00-60,00-80,00-100,00UP SBI TOP SBI 2003.01.2008 03.03.2008 03.05.2008 03.07.2008 03.09.2008 03.11.200803.02.2008 03.04.2008 03.06.2008 03.08.2008 03.10.2008 03.12.2008Source: Ljubljana Stock Exchange, Securities Market AgencyFigure 10 shows the comparison of average returns or changes in UP in 2008, with the weightapplied being the share of the value of assets of an individual fund in the value of assets of anindividual group of funds (share, mixed, bond and money market). Among individual groups ofMFs, money market MFs are the only group that shows a positive weighted average return(4%). As shown in Figure 9, the weighted average of such measured nominal returns of shareMFs stood at -47%, that of mixed MFs -39% and that of bond MFs -10%.REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200830

SECURITIES MARKETAGENCYFigure 10: Movement of weighted average of annual changes in UP by individual groupsof MFs in 200820,00Share MF Mixed MF Bond MF Money market MF0,00-20,00-40,00-60,0003.02.2008 03.04.2008 03.06.2008 03.08.2008 03.10.2008 03.12.200803.01.2008 03.03.2008 03.05.2008 03.07.2008 03.09.2008 03.11.2008Source: Ljubljana Stock Exchange, Securities Market Agency3.2 Investment companiesAt the end of 2008, there were four ICs operating, all formed in the process of transformationof authorised investment companies. As of 31 December 2008, they managed assets in theamount of EUR 398 million.Table 33 shows the net value of assets of the IC at the end of each individual year. At the endof 2008, the net value of assets of ICs thus totalled EUR 367 million or 70% less than at theend of 2007. This reduction in the net value of ICs is the result of reduced value of assets andtransformation of three ICs into MFs.Table 33: Net asset value of ICs by year (in million EUR)31. 12. 2003 31. 12. 2004 31. 12. 2005 31. 12. 2006 31.12.2007 31.12.2008Total 889.4 1,205.6 822.8 906.9 1,228.1 367.0Note:Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.Source: AgencyAs evident from Table 34, MFs invest predominantly in equity securities traded on regulatedsecurities markets. These investments amounted to slightly above EUR 258 million at the endof 2008, or 65% of the total. Of the total, EUR 231 million or 58% of all MF assets wereinvested in equity securities of domestic issuers.Table 34: Aggregate structure of investments in IC as of 31 December 2008Total (in EUR) in %1. Cash 15,467,731 3.882. Deposits and loans 12,069,210 3.033. Securities and money market instruments traded on the regulated market of securities 289,175,822 72.573.1 Securities issued by domestic issuers 262,265,212 65.823.1.1 Equity securities issued by domestic issuers 231,294,566 58.043.1.2 Debt securities issued by domestic issuers 30,970,646 7.77REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200831

SECURITIES MARKETAGENCYTotal (in EUR) in %3.1.3 Other securities issued by domestic issuers 0 0.003.2. Securities issued by foreign issuers 26,910,609 6.753.2.1 Equity securities issued by foreign issuers 26,910,609 6.753.2.2 Debt securities issued by foreign issuers 0 0.003.2.3 Other securities issued by foreign issuers 0 0.003.3. Money market instruments traded on a regulated securities market 0 0.003.3.1 Money market instruments of domestic issuers 0 0.003.3.2 Money market instruments of domestic issuers 0 0.004. Money market instruments of prime issuers 0 0.005. Investment coupons and shares of open investment funds 9,509,156 2.396. Combined and derived financial instruments 0 0.007. Other transferable securities and other money market instruments 71,625,329 17.978. Receivables 629,722 0.169. Prepayments and accrued income 6,048 0.0010. Total 398,483,017 100.00Source: AgencyFigure 11: Aggregate structure of IC investments at the end of 2008 (in %)Other transfer. securities andother MM instruments17.97%Receivables and deferrals0.16%Cash3.88%Deposits and loans3.03%IC and shares of open IFs2.39%Securities and MM instrumentsof foreign issuers6.75%Securities and MM instrumentsof domestic issuers65.82%Source: AgencyMarket shares of individual MCs in terms of net value of IC’s managed assets changed in2008 in comparison to the previous year, the reasons for this being, above all, in thetransformation of three ICs into MFs. Thus, only four MCs managed ICs at the end of 2008,with NFD DZU still holding the largest market share.REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200832

SECURITIES MARKETAGENCYTable 35: Market shares of individual management companies in terms of net value ofIC’s managed assets as of 31 December 2008Net value of managed assets (NAV) (inMCEUR)Share (in %)NFD DZU, d.o.o. 231,775,340 63.16DUS Krona, d.o.o. 56,390,489 15.37KD Investments DZU, d.o.o. 54,077,517 14.74Krekova druţba DZU, d.o.o. 24,730,951 6.74Total 366,974,297 100.00Source: AgencyFigure 12 shows a great fall in the average book value of IC shares in 2008, by 50%. Theaverage market price fell by 64% in 2008.Figure 12: Average market price for shares in ICs (average price) and average bookvalue of ICs, December 2007 to December 200825value in €19,822018,35 18,0916,5416,60 16,9015,7214,8914,81 14,701514,33 13,67 13,9713,8912,8312,03 11,86 12,24 11,8311,1910,539,359,83107,937,006,0350dec.07 jan.08 feb.08 mar.08 apr.08 maj.08 jun.08 jul.08 avg.08 sep.08 okt.08 nov.08 dec.08price ( uniform ) book value of shares without certificatesNote:Calculation of average book and market value of IC shares is adapted to the number of all issued shares.Source: AgencyAt the end of 2007, the discount of the average market value in terms of the average bookvalue was 17% and at the end of 2008 it was 39% (Figure 13). The deteriorated ratio betweenthe average book value and the average market value of IC shares was, among others, alsothe consequence of the increased volume of offered shares due to the shareholder’s need forliquidity.REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200833

Discount (v %)SECURITIES MARKETAGENCYFigure 13: Movement in the discount of the average market price of IC shares to theaverage book value, December 2007 to December 200840373431discounted market price in terms of book value of IC shares282522191613dec.07 jan.08 feb.08 mar.08 apr.08 may.08 jun.08 jul.08 aug.08 sep.08 oct.08 nov.08 dec.08Note:Calculation of the discount between the average book and market value of IC shares is adapted to the number of allissued shares.Source: Agency3.3 Investment funds from EU Member States meeting the conditions for marketingand sale in Slovenia 33In 2008, the Agency received and processed 36 notifications for the marketing and sellingunits of investment funds of EU Member States in Slovenia. Of those, only 15 investmentfunds met the conditions for direct marketing and sales in the Republic of Slovenia at the endof 2008, while the remaining 21 were transferred to processing in 2009. These notificationswere filed by four MCs from the European Union, two of whom applied for registration for thefirst time. Based on the above notifications, 13 MFs and two umbrella funds started marketingand selling the units of assets of MF on the territory of the Republic of Slovenia in 2008, with12 sub-funds. Furthermore, six investment funds from Member States were discontinued in2008. Thus, the number of investment (sub)funds of Member States which directly market andsell their units of assets on the territory of the Republic of Slovenia increased from 128 at theend of 2007 to 137 at the end of 2008.4 MUTUAL PENSION FUNDSPursuant to the Pension and Disability Insurance Act, since 2000, the Agency has beenresponsible for issuing authorisations to establish mutual pension funds (hereinafter: MPF)and for overseeing their operations. As of 31 December 2008, there were six mutual pensionfunds that held the authorisation to operate, with 238,811 members. Of those 236,323 werecovered by collective insurance (via employers) and 3,110 held individual insurance and paidthe premiums by themselves. The ZPIZ-1 allows for each insured to subscribe to onecollective and one individual pension plan.As of the last day of 2008, all MPFs together managed assets in the amount of EUR 483million, which is 10% more than at the end of 2007. The increase in the assets is the result ofregular payments into the MPF. In 2008, the number of members did not change significantly.REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200834

SECURITIES MARKETAGENCYThe movement of people covered by voluntary supplementary pension insurance and thecollected premium between 2004 and 2008 is shown in Table 36.Table 36: General data on MPF from 2004 to 200831. 12. 2004 31. 12. 2005 31. 12. 2006 31.12.2007 31.12.2008No. of funds 6 6 6 6 6No. of managers 5 5 5 5 5No. of members 205,322 210,775 220,518 230,912 238,811Net collected premium/y (in EUR) 92,258,662 84,461,676 89,828,895 95,067,972 102,058,252NAV (in EUR) 150,394,111 239,775,826 335,850,615 437,166,906 482,045,486Market concentrationshare of largest fund 45.82% 52.96% 56.15% 57.30% 58.49%share of three largest funds 92.59% 93.31% 93.74% 93.51% 92.03%Note:Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.Source: AgencyBecause the managers of MPFs are obliged each month to secure the guaranteed return onthe net collected premium, which depends on the yield of Government bonds, the MPFs focusprimarily on fixed-return investments, i.e. bonds (61%) and bank deposits (24%). In this way,managers expect to guarantee positive returns on collected premiums and avoid any risk offailing to achieve the minimum guaranteed return. In the last quarter of 2008, not all MPFsmanaged to maintain the actual net asset value above the guaranteed, in spite of the fact thatMPFs slightly reduced the share of high-risk investments, i.e. investments in shares andinvestment coupons or IF shares. A more detailed presentation of the aggregate structure ofMPF investments is shown in Table 37.Table 37: Aggregate structure of investments in MPF from 2006 to 200831.12.2006 31.12.2007 31.12.2008EUR % EUR % EUR %Cash 1,166,989 0.35 6,159,467 1.40 5,507,349 1.14Short-term securities 20,539,222 6.10 19,253,909 4.38 9,890,676 2.05- Government securities 12,853,956 3.82 16,233,737 3.70 9,525,520 1.97- other securities 7,685,266 2.28 3,020,172 0.69 365,157 0.08Bonds 226,560,180 67.30 268,537,900 61.16 294,185,091 60.87- Government bonds 141,069,907 41.91 104,484,052 23.80 140,120,872 28.99Shares 9,357,944 2.78 34,054,782 7.76 25,560,549 5.29Other securities 5,563,449 1.65 3,049,286 0.69 3,273,061 0.68MF investment coupons and IC shares 18,453,398 5.48 40,941,571 9.32 29,952,984 6.20Bank deposits 54,659,696 16.24 66,793,130 15.21 114,056,516 23.60Loans 0 0 0 0 0 0Real estate 0 0 0 0 0 0Other receivables 337,916 0.10 295,772 0.07 898,446 0.19Total Assets 336,638,793 100.00 439,085,816 100.00 483,324,672 100.00Note:Data until 31 December 2006 calculated on the basis of the exchange rate EUR 1 = SIT 239.640.Source: AgencyThe structure of MPFs investments varies over years, but the share of fixed-returninvestments, i.e. bank deposits and bonds remains stable. Compared to the previous year, theshare of short-term securities was reduced from 4% in 2007 to 2% in 2008. As mentionedREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200835

SECURITIES MARKETAGENCYabove, the share of placements in investment coupons and IF shares also dropped in 2008:from 9% to 6%. With the aim of providing guaranteed return, placements in bonds still prevail.Figure 14: Aggregate structure of MPF investments at the end of 2008 (in %)Bonds; 60.87%Shares; 5.29%Short-termsecurities; 2 . 05 %Other securities; 0.68%Deposits; 23.60%Cash; 1.14%Receivables anddeferred items ;0.19%Invest. coupons andshares of invest . companies ;6.20%Source: AgencyIn 2004, when the Closed Mutual Pension Fund was formed, the situation on the market ofsupplementary pension insurance changed considerably and Kapitalska druţba finally took theleading position on the market of supplementary pension insurance. Such concentration onthis market is not good and additionally impedes the voluntary transition of members betweenthe providers of voluntary supplementary pension insurance. This option that enables theinsured to switch among the providers is supposedly the leverage that will ensure the truecompetition of different providers of pension products and thus more efficient operation ofMPF. Figure 15 clearly shows that, following a significant increase in the number of membersin May 2004, when the Closed Mutual Pension Fund for Civil Servants started operating, thegrowth in the number of MPF slowed down. Members included in collective savings schemesstill prevail. The share of members included in individual pension insurance remainsinsignificant, especially due to low tax relief and the fact that collective pension savingsschemes can use the tax relief more efficiently. As a rule, employees with higher incomeparticipate in individual insurance programmes more frequently.REPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200836

Number of members in MPFSECURITIES MARKETAGENCYFigure 15: Number of MPF members, December 2003 to December 2008300.000250.000200.000150.000100.00050.0000mar.04 sep.04 mar.05 sep.05 mar.06 sep.06 mar.07 sep.07 mar.08 sep.08dec.03 jun.04 dec.04 jun.05 dec.05 jun.06 dec.06 jun.07 dec.07 jun.08 dec.08Source: AgencyConsidering the deteriorating demographic trends, the Government should adopt adequatemeasures to stimulate employees to join this form of pension saving, regardless of the fact thatthe number of persons saving for old age in MPF, pension companies and insurancecompanies is gradually increasing.Figure 15: Share of individual managers in the management of MPF assets in terms ofnet asset value as of 31 December 2008ProbankaAbankaGenerali Zav.Banka KoperKAD0,00 10,00 20,00 30,00 40,00 50,00 60,00 70,00 80,00 90,00 100,00Source: AgencyData on collected assets or net asset value also show the prevailing role of Kapitalska druţbad.d. in the area of MPF operations, taking into account the important fact that Kapitalskadruţba d.d. manages two MPFs, of which the closed mutual pension fund for civil servantsalone accounts for 46% of the market share and the capital mutual pension fund for 30% ofthe market share.In line with the ZPIZ-1, voluntary supplementary pension insurance is provided by MPFs,insurers and pension companies. In terms of the volume of collected assets by the providers ofREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200837

SECURITIES MARKETAGENCYvoluntary supplementary pension insurance, MPFs achieved a 42% market share in 2008(Figure 17).Figure 17: Volume of operations of pension companies, MPFs and insurancecompanies measured by the volume of assets as of 31 December 200821.43%41.83%36.74%Mutual pension fundsPension companiesInsurance companiesSource: AgencySupplementary pension insurance is a form of insurance in which the policyholder assumesthe investment risk with a guaranteed return on the net premium paid. The guaranteed return,which is expressed as an annual return that the manager of the MPF guarantees, may not belower than 40% of the average annual interest rate on government securities with a maturity ofmore than one year. A fall in the value of the unit price is shown by Figure 18 and themovement of return at the annual level per MPF in 2008 is shown in Table 38. The lowestreturns in 2008 were achieved by the MPFs managed by Kapitalska druţba, d.d.Figure 18: Change in the unit price of MPFs in the period from 31 December 2007 to 31December 2008Source: AgencyREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200838

SECURITIES MARKETAGENCYTable 38: Return of MPF at the annual level and minimum annual guaranteed return in2008 (in %)KVPS LEON 2OVPSBankaKoperA III DELTA ZVSJUMinimumguaranteedreturn at theannual leveljan.08 -0.07 3.54 6.28 6.44 6.56 1.93 1.72feb.08 0.07 4.03 6.71 6.80 8.07 1.13 1.72mar.08 -1.65 2.19 4.20 5.09 4.72 0.44 1.72apr.08 -1.18 1.09 2.64 4.73 3.27 -0.21 1.72may.08 -1.21 0.44 1.85 4.00 2.70 0.89 1.72jun.08 -3.35 -1.75 -0.20 2.36 0.96 -0.51 1.72jul.08 -3.36 -1.78 -1.03 1.91 0.55 -2.11 1.77aug.08 -3.29 -2.10 -2.29 1.63 0.27 -0.78 1.77sep.08 -6.84 -2.91 -3.59 -0.19 -0.84 -3.10 1.77oct.08 -10.65 -3.95 -5.26 -3.38 -2.80 -7.83 1.77nov.08 -10.80 -2.95 -5.80 -2.73 -1.83 -8.04 1.77dec.08 -12.18 -3.17 -6.37 -5.29 -6.25 -9.05 1.77Source: AgencyREPORT ON THE STATE AND SITUATION ON THE MARKET OF FINANCIAL INSTRUMENTS IN 200839