Freedom Holding Corp (FRHC)

[Quintessence]

More than a broker: how to make money on the stock exchange.

Good writeup on Freedom Finance and interview with Dmitry Makeev, head of the Kaliningrad branch.

https://www.newkaliningrad.ru/news/business/18522980.html

The company "Freedom Finance" this spring opened a regional branch in Kaliningrad. Dmitry Makeev, the head of the branch of Freedom Finance in Kaliningrad, described the opportunities that the city's residents received thanks to this, the more interesting the investments in the American markets and how to make money on the exchange.

- Tell us more about the company "Freedom Finance" - how long has it been in the market? What is the main direction of its business, what is the key specialization?

- "Freedom Finance" has been operating on the market since 2008. Over the years, Freedom Finance has grown into an international corporation with assets of $ 250 million. It has 25 branches in the largest cities of Russia, 15 branches in Kazakhstan, and there are representations in Uzbekistan and Kyrgyzstan. The shares of our holding Freedom Holdings are traded on the US stock exchange and regulated by the US Securities Commission, in total the company held two private placements, collecting a total of about $ 40 million from customers and partners in Russia and Kazakhstan, and management. We are big, and we are transparent.

Unlike most brokers in Russia, we are not concentrated only in the Russian market. We built an investment factory inside our company that helps people to earn money, including on American stock exchanges. If where billions of dollars are circulating, it's there.

- Why do you consider the direction of foreign investment interesting?

- American stock exchanges are the largest global companies, such as Apple, Google, Facebook. On US stock exchanges, companies such as Dropbox, Twitter, Ferrari hold an IPO to attract capital. We are one of the rare players who provide access to operations on the US stock exchange and analytical support in Russian. We are looking for really interesting investment opportunities, we evaluate them from the point of view of fundamental analysis, we calculate the growth potential of the shares.

On our analytics, such a service as "consulting management" is based. Its essence is to give the client recommendations and help to form an effective portfolio.

An interesting direction for our clients is participation in IPO in foreign markets. Access to primary placements is provided by the group of companies "Freedom Finance", since 2012 our clients have been able to participate in 47 placements and receive impressive yields (by the way, 78% of IPOs are successful). So, for example, on May 14, Dropbox shares since the placement on March 22, 2018 have already risen in price by 38.7%, Zuora shares since placement on March 12 by 39.6%, and Zscaler securities since the placement on March 15 rose 78%.

Thanks to our package of services, customers have the opportunity to receive impressive revenues, while alternative sources of profit lose their appeal. So, in recent years, the average yield on deposits has been steadily declining. Against this background, Russians are actively looking for reliable ways to save and multiply their savings. The real estate market is also falling, investments in business are associated with high risks, in addition, our economy is going through bad times. Fortunately, there is a convenient and profitable option - securities. They give you the opportunity to participate in the business of the flagships of the world economy - the same Apple and Facebook, Coca-Cola and Disney.

- Expanding the presence in the regions, the company "Freedom Finance" recently opened an office in Kaliningrad. How do you assess the region in terms of investment?

- For us, this is part of a great strategy. IC "Freedom Finance" consistently expands the geography of its presence and client base throughout Russia. By the present moment, branches in Ufa, Novosibirsk, Yekaterinburg, Vladivostok, Tyumen, Rostov-on-Don, Volgograd, Chelyabinsk, Sochi, Omsk, Perm, Voronezh have been officially opened. We want to give access to world markets in every city where they are interested. Kaliningrad is one of our priorities.

- What about financial literacy in the region and in the country as a whole? Is there any positive dynamics?

- So far, the number of people across Russia, who regularly invest in the stock market, is less than one percent. And this despite the fact that investment in securities is an effective tool, due to which you can increase your current income or put it off for your old age. Low involvement of our fellow citizens in the stock market is due to low financial literacy and, as a result, distrust of exchange instruments.

At the same time, 75% of Americans with an income of more than $ 100 thousand will necessarily come to the stock exchange: they understand that there are no alternatives on profitability. Does this mean that they are professionals in the stock market? No. They turn to financial advisors who give recommendations on how to competently form a suitable portfolio and minimize risks. Of course, the situation in Russia can not be changed quickly. But we do our part to support our customers, including potential customers - we have the Exchange University, and we conduct free seminars on investments in foreign markets. Such seminars will be held in the office in Kaliningrad, the nearest one will be held on May 24, and later they will be held every Wednesday at 7 pm.

- Who are your customers?

- Anyone who has certain savings and is interested in their multiplying can become our client.

- Freedom Finance has its own bank. What are its features? Does he have any advantages over other banks?

- Our bank of the same name has a unique banking product - an indexed deposit, which gives an opportunity to receive income from the growth of shares with a guarantee of return of the invested funds. We are not building a mass bank, but a bank with premium service, which is very comfortable for all our clients. As the customers themselves say, a great advantage of our bank is a careful and unobtrusive approach - with a high level of professionalism of the bank's employees. For the premium segment, this is especially valuable.

- You mentioned that the company is also actively working in Kazakhstan and Uzbekistan. Tell us about your development strategy in the CIS. Are there specific features in the markets of these countries? What is it?

- Indeed, we are the broker who is present throughout the post-Soviet space. In total, about 260 million people live in this region. We have a common history, relatively similar legislation, a common language for doing business. The population's income is growing, while the level of penetration of exchange-traded instruments is low, and the potential for economic growth and the increase in the value of undervalued assets is colossal.

Now we have a very large business in Kazakhstan: here we are the broker number 1, according to the Kazakhstan Stock Exchange. There is business in Kyrgyzstan. Our office in Uzbekistan has recently started operating - this country is opening up its economy and plans to privatize through the stock market mechanism. In addition, Ukraine is an important area for us.

- In addition to the traditional retail brokerage business, are there any directions that the company is going to develop?

- The key value of "Freedom Finance" - quality analytics and trustworthy relations with the client. It's more than just brokerage. Thanks to this, we managed to build such a system of communication with customers, which allows them to sell good and proven investment ideas. This is the basis for investment banking.

- Today, most brokerage companies rely on online services. How does "Freedom Finance" deal with the development of this direction?

- The company "Freedom Finance" was the first in Russia to launch an online store for shares of freedom24.ru. This store allows Russians to remotely open a brokerage account and buy securities on it with the help of a plastic card without leaving home. The advantages of our online store are remote identification, maximum convenience and efficiency. We want to make the stock market as accessible as possible.

In conclusion, we can add that we ourselves prefer Fidom Finance shares to the rest - it's no secret that the company's employees receive the shares of Walt Disney, Facebook or Tesla as a result of the year.

* LLC Investment Company "Freedom Finance", LLC "FFIN Bank"
** LLC "First Stock Store": Moscow, st. Karetny ryad, 5