FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2009
KAZAKHSTAN STOCK EXCHANGE
Azamat Joldasbekov
President
The 2008 global financial turmoil obviously had
an affect on Kazakhstani financial market. As
many developing markets on one hand
Kazakhstan is not fully integrated to the global
markets and thus is not directly influenced by
the crisis in the global financial industry. At the
same time due to its relatively young history of
development it lacks the strength to withhold
such economic shocks even if their affects are
indirect.
The overall country’s economic growth rates
have considerably slowed down and prices of
the Kazakhstani most liquid shares dropped
below their book value. In 2008 Kazakhstan
Stock Exchange (KASE) lost 42.2 % of its
market capitalization decreasing to 31.1 billion
USD. The overall volume of trades in all sectors
of the market was USD 263.2 billion and
increased by 21.3 % in compare to 2007.
HISTORY AND DEVELOPMENT
Founded on November 17, 1993 Kazakhstan
Stock Exchange (KASE) is the only Stock
Exchange in Kazakhstan. It represents a
universal financial market with the following
major sectors: foreign currency, government
securities, corporate securities, repo and
derivatives. KASE is a member of the
International Association of Exchanges of the
Commonwealth of Independent States, the
Federation of Euro-Asian Stock Exchanges, and
in 2008 obtained an affiliate status at the World
Federation of Exchanges. It continues working
actively on establishment of bilateral and
multilateral relations with the foreign
companies, exchanges and international
financial institutions.
KASE is regulated by the the Agency for
Regulation and Supervision of Financial
Markets and Institutions, which among other
responsibilities executes the main functions of
state control and supervision of the security
market. Creation of a Regional Financial Center
of Almaty (RFCA) in 2006 opened new
opportunities for the Stock Exchange and
equity market as a whole. Kazakhstan Stock
Exchange was legally determined as an
operator of the special trade floor of the
Regional Financial Center of Almaty. During the
following year, Kazakhstan Stock Exchange
elaborated and adopted a new 2007-2010
development strategy, obtained a status of a
commercial organization, adopted the Code of
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In 2009 the KASE plans to continue moving
towards its development strategy goals,
which would require greater efforts from
the company and mobilization of
resources.
The shares trade volume collapsed to 3.8
billion with nearly 57.1 % decrease in compare
to 2007, corporate bonds - to 3.7 billion with
15.1 % decrease in compare to 2007, whereas
foreign currency market jumped up 51.9 %
totaling to 138.9 billion and repo market
turnover increased 4.6 % totaling 109 billion
USD*.
Regardless of unfavorable conditions KASE
managed to attract new issues in 2008. The
number of newly listed companies increased
by 58 % in compare to the previous year. The
Kazakhstani financial markets regulator is
initiating necessary changes to minimize the
risks of investors and improve market
conditions. Joint efforts of the government and
private sector should bring to improvement of
market conditions in the long run.
Corporate Governance and began the process
of additional capitalization.
With 2008 global financial turmoil, KASE revised
some of its previous plans and postponed the
demutualization of its shares. The stock
exchange focused on other issues described in
the company’s Development Strategy. It
completely revised the structure of its web-site
making it more convenient for the users;
introduced changes into the trading system;
revised the listing rules and categories to reflect
changes evolved from the merger of the Main
Trading Floor with the RFCA Special Trading
Floor. KASE introduced new financial
instruments and seriously considers further
diversification of the existing range of the
financial instruments and services offered by
the exchange to its clients.
FUTURE OUTLOOK
Kazakhstan Stock Exchange Inc. (KASE) will
continue further improvement of the services
provided by the exchange to the market
participants, launching new attractive markets
and developing its business infrastructure. In
2009 we will promote growth of the newly
introduced instruments in Kazakhstan, such as
currency swaps, continue further improvement
of the trading system and diversifying
information disclosure channels aimed at
supporting KASE 2007-2010 Development
Strategy.
In 2009 KASE plans to continue moving
towards its development strategy goals, which
would require greater efforts from the company
and mobilization of resources. With new
reforms, KASE hopes to further develop
Kazakhstan’s securities market reaching high
international standards, to contribute to the
overall economic development of the country,
as well as to promote development of the
financial markets in the Central Asian region.
* At the beginning of 2009 KASE changed the
methodology of the trade statistics (in repo and
currency swaps sectors) and applied these
changes in compiling the results of 2008.
Please refer to http://www.kase.kz/en/news/show/1064107
for detailed information on this methodological modification.
The development strategy represents a
comprehensive document that describes
organizational and structural reforms, lists
priority areas and phased approach, linking
identified performance factors with strategic
initiatives and projects designed to develop and
optimize organizational activities. The text of the
strategy can be found on KASE web-site
(www.kase.kz).
On the international side of its operation, KASE
will continue its work with the governmental
agencies and international organizations to
promote development and visibility of the
Kazakhstan financial market, as well as its
compliance with mutually recognized
international norms and standards. The
exchange plans to continue maintaining its
leadership role in the Central Asian region and
improve bilateral cooperation with exchanges
across the globe.
In the environment of uncertainty with which the
global financial markets are entering 2009,
KASE is planning to maintain a high degree of
flexibility to address the current conditions of
the market, its urgent needs and potential. At
the same time, the core principle of KASE to
service its market participants as stable,
transparent and efficient service provider will
remain unchanged.