M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) OVERVIEW OF CAPITAL MARKETS IN ARGENTINA Jacqueline Donaldson

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Structure Regulations Authorization to make public offer Public offer vs. private offer Overview of securities traded in Argentina

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Structure Comisión Nacional de Valores (CNV) Buenos Aires Stock Exchange or stock exchanges in other provinces Mercado Abierto Eléctrónico S.A. (MAE) Caja de Valores S.A. Mercado de Valores

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Structure (cont.) (i) Comisión Nacional de Valores Created in 1968 by the Argentine Securities Law No. 17,811. Its mission is to regulate and control the capital markets participants, verifying that the transactions comply with the principles and objectives of the Argentine Securities Law and other regulations. 160 staff members. Departments: Issuers (Gerencia de Emisoras). Products of Collective Investment (Gerencia de productos de Inversión Colectiva). Intermediaries Stock Exchanges and Markets (Gerencia de Intermediarios, Bolsas y Mercados). Investigation and Anti-Money Laundering (Gerencia de Investigación y Prev. del Lavado de Dinero).

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) The CNV is empowered to: Authorize the public offer of securities and set forth the requirements issuers must comply with to keep such authorization in force. Advice the National Government on the requests of authorization to become stock exchanges. Update the list of agents and broker dealers registered with the securities markets. Keep the record of the persons authorized to make public offer of securities and set forth the regulations to which they have to comply. Approve the stock exchanges and security markets by-laws related to the public offer of securities.

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Supervise and control the compliance of legislation and regulations regarding the public offer of securities; Supervise and control corporations that make public offering of their shares from a corporations law point of view; Authorize the constitution of mutual funds; Control clearing agencies and approve their by- laws; Authorize the constitution of futures and options markets and supervise their functioning; Authorize and supervise the functioning of rating agencies. Adopt the administrative and disciplinary measures considered necessary to insure the correct application of its missions and functions.

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Structure (cont.) (ii) Buenos Aires Stock Exchange There are 15 stock exchanges in Argentina, of which the Buenos Aires Stock Exchange is the most important. It also has four different trading sections: the general section, the special section, the new projects section, and a recently created section for companies involved in e-commerce, telecommunications, internet, electronics, biotechnology and science.

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Stock exchanges are empowered to: Authorize, suspend and cancel the listing of securities according to the regulations issued by each stock exchange. Set forth the requirements to be met in order to list securities. Supervise and control compliance of laws and regulations by corporations that have securities listed. Release information on listed companies. Issue regulations and measures necessary to insure the accuracy of financial statements and other documents that have to be published. Carry out registry of operations. Issue regulations to insure the accuracy of the registry of listings and publish the same and the current prices.

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) (iii) Caja de Valores S.A. The clearing of transactions on the Buenos Aires Stock Exchange is carried out through Caja de Valores S.A., which is the Argentine clearing agency that provides central depository facilities for securities and may act as a transfer and paying agent. Over-the-counter transactions are cleared and settled by their respective parties, and the participants (known as depositors) may deposit traded securities with the Caja de Valores S.A., which then holds them on behalf of their principals ("comitentes"). Caja de Valores S.A. does not have delivery vs. payment system but the same effect is achieved with an agreement with Merval.

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) (iv) Mercados de Valores The only persons authorized to effect transactions in securities listed on the Buenos Aires Stock Exchange are the shareholders of Mercado de Valores S.A. (the "Merval"). It is the company that oversees brokerage activities and transactions on the floor of that Stock Exchange. These are self-regulated organizations that regulate, guarantee and settle transactions. Must adhere to a stock exchange. They grant professional licenses to agents and brokerage firms, supervise their activity and carry out the broker dealers registry.

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) (v) Broker dealers Broker dealers have to be shareholders (accionistas) of the corresponding market. The Mercados de Valores have disciplinary powers over the agents, broker dealers and brokerage firms. Individuals or brokerage firms organized as sole- purpose corporations (sociedades de bolsa), including subsidiaries of commercial banks, are allowed to become shareholders of the Merval. Value of a share of the Merval: AR$ 3,200,000 (November 2007).

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) (vi) Over-the-counter-markets The MAE is an electronic market in which only over- the-counter dealers (agentes de mercado abierto) registered with the CNV may trade securities. Financial entities and banks (both Argentine or foreign owned) may also be agents of the MAE. To become an agent of the MAE: purchase one share (value at June 2007 = AR$ 50,257) minimum net worth: AR$ 2,700,000.

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Regulations Law No. 17,811 (Securities law) Decree No. 677/01 (Transparency in public offer regime) Law No. 24,083 (Mutual Funds) Law No. 24,241 (Pension Funds) Law No. 24,441 (Trusts)

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Authorization to make public offer of securities Issuers and other entities involved in the public offer must be registered with the CNV. Each public offer of securities must be authorized by CNV. CNV approval of a public offer means only that there has been compliance with the regulations applicable to the offer and does not provide any assurance with respect to the subsequent performance of the particular security as an investment. Issuers must continue to observe certain reporting requirements as long as they are authorized to publicly offer securities.

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Public offer vs. private offer Only the public offer of securities is subject to the Argentina Securities Law. Pursuant to law No , a public offer is an invitation made to the general public, or certain sectors or groups thereof, to enter into any transaction involving securities made by issuers, unipersonal organizations or by companies dedicated to their commerce, either exclusively or not, by means of personal offers, newspaper advertisements, radio or television broadcasts, films billboards, signs, programs, circulars, printed notices or by any other means. The concept of private placement may only be defined by exclusion as any placement of securities that is not deemed a public offering.

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Reasons for trends in entry/exit to the market over recent years T he macro crisis of 2001, the devaluation, the recession, and the lack of confidence in the legal framework were some of the factors that eroded the Argentine capital market as of Such trend has reverted in the recent years.

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Overview of securities traded in Argentina Listed companies at end-of-period: Number of listed companies: TOTALDOMESTICFOREIGN Source: BCBA

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Trading volume: Trading volume (equity) in BCBA AR$ million October12.898

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Trading volume of the ten most traded companies as a percent of total market capitalization: Company% of total Tenaris SA34,93 Petrobras Energ. Participaciones S.A10,87 Acindar8,27 Grupo Financiero Galicia7,79 Siderar7,42 Banco Macro6,58 Petroleo Brasileiro (Petrobras)4,82 Telecom Argentina3,73 BBVA Banco Francés2,86 Transener2,08 Trading volume January-October 2006

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Companies that offer bonds on the market: In 2006, approximately 99 corporations were offering debt securities through the public offering regime. Additionally, 10 corporations issued VCP (short term commercial papers, up to 365 days maturity).

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) US$ million , , , , , (up to sept)2.522, /2004 figures mostly due to debt restructuring Source: CNV Value of corporate bond offerings:

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Argentine Capital Markets in 2007 Financing through Argentine Capital Markets (including shares, notes and financial trusts) amounted to US$ 6,232 MM (45% increase with respect to 2006). 6 new companies entered the public offer regime (against 2 in 2006). number of public issuance of shares approved by CNV: 13 (against 7 in 2006).

M | M | B M. & M. BOMCHIL ABOGADOS Suipacha 268 piso 12 C1008AAF Buenos Aires Argentina Tel.: (54-11) Fax: (54 11) Argentine Capital Markets in 2007 Financing of the private sector by debt issuance increased 81% with respect to 2006, the highest of the last 6 years. Debt issues were mainly done by the Energetic Sector (34%), Banks (22%) and the Telecommunications sector (20%). New notes (not part of debt reestructurings) were issued for US$ 1,353 MM (81% increase with respect to 2006). The stock of notes in december 2007 was US$ 11,800 MM (27% increase between march and december). 34 issuance of notes (as part of reestructuring process or already approved programs), amounting to US$ MM (4% increase with respect to 2006). 244 financial trust emitted (against 201 in 2006), amounting to US$ MM in abx