FEAS Yearbook FEAS Yearbook 2002 | Page 48

FEDERATION OF EURO-ASIAN STOCK EXCHANGES > YEARBOOK 2002/2003 > PAGE 46 KAZAKHSTAN STOCK EXCHANGE LETTER FROM THE PRESIDENT The overall Exchange turnover reached US$ 19.7 billion during 11 months of 2002. This is 2.4 times more than during the same period in the previous year. In 2002 Kazakhstan’s financial market did not experience significant changes. Programs, which started in 1999, continued during the last year. The most important trend is the rapid growth of stock exchange turnover, resulting from: the successful functioning of an accumulative pension system; enhancement in people’s confidence in the banking system resulting in an increasing deposit base in the banks; and the National Bank’s efforts to increase the level of the money supply in the economy. The result has been a rise in the volume of available resources in the financial market and an expansion of the repo market. At the end of November 2002, the repo sector’s share in the overall KASE turnover reached 76%. Foreign exchange had a 13% share of the turnover, derivatives - 3%, state securities buy/sell operations - 7% and corporate securities – 1.5%. The overall Exchange turnover reached US$ 19.7 billion during 11 months of 2002. This is 2.4 times more than during the same period in the previous year. The absolute figure of the increase is US$ 11.5 billion, of which US$ 11.2 billion is the repo market. Another trend from the post-crisis period is the continuing rapid growth of capitalization of the corporate bonds’ market. This indicator of KASE, in 2002, has risen from US$ 575 million to US$ 1.18 billion (almost 2 times). The official list of securities of the KASE, which introduced instruments of high investing quality, has broadened significantly. At the beginning of the year only 24 bonds of 22 issuers were included in the list. At the end of the year the list contained 44 bonds of 38 issuers. All during the year the KASE modified its normative base. One of the most important events of the year was the launching of new listing rules, which took into account six years of experience in the corporate and municipal securities’ market, along with the toughening of requirements for market-makers of securities. These new strict requirements are expected to result in an increase in liquidity in the corporate bonds market. Azamat Joldasbekov President HISTORY AND DEVELOPMENT The KASE (previously, the Kazakhstan Interbank Currency and Stock Exchange) was founded on 17 November 1993 as a closed-end joint-stock company, on the basis of an earlier established Center of Interbank Currency Transactions (Currency Exchange) of the State National Bank. The main stimulus to create the KASE was the introduction of the national currency, the Kazakhstan tenge, on 15 November 1993. Starting in November 1995, the KASE began trading state T-bills. In November 1996, the KASE received its securities trading license from the National Securities Commission (NSC). As a result of a tender organized by the government in December 1996, the KASE was chosen as a model exchange to trade securities of the largest enterprises of Kazakhstan. (AFINEX), thus making the KASE the only organized market in Kazakhstan. In 2001 KASE became a shareholder of the Kyrgyz Stock Exchange. In September 1997, a closed joint-stock company, the Almaty Financial Instruments Exchange, separated from the KASE. Two exchanges resulted from the adoption, in March 1997, of the law “On Securities Market” with the provision that a stock exchange could only operate in securities. However, on 1 April 1999, a merger took place between the KASE and the Almaty Financial Instruments Exchange FUTURE OUTLOOK The KASE plans the following in 2003: launching of an Internet trading system; development of collective forms of investment; attraction of insurance companies as institutional investors; ordering document circulation, in particular, the introduction and implementation of an electronic signature feature; and expansion of the powers of the brokerage houses.