FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2013
KAZAKHSTAN STOCK EXCHANGE
Azamat Joldasbekov
President
In 2013 Kazakhstan Stock Exchange celebrated
its 20th anniversary. Throughout 20 years of its
history KASE evolved into the only licensed and
regulated stock exchange in Kazakhstan with
the following markets: foreign currency market,
government securities market, market of shares
and corporate bonds, bills and derivatives
market.
Becoming a full member of the World
Federation of Exchanges (WFE) during 53rd
WFE General Assembly in Mexico City is
one of the major achievements of 2013. This
symbolizes international financial community’s
recognition of KASE as an integral part of
the global exchanges infrastructure. Gaining
WFE full membership also proves KASE’s
compliance with international standards and
global best practices. As a WFE full member
KASE will establish closer cooperation with the
leading exchanges and promote its products
and services internationally.
HISTORY AND DEVELOPMENT
KASE was established in 1993 and celebrated
its 20th anniversary in 2013.
During the 53rd World Federation of Exchanges
(WFE) General Assembly in Mexico City on
October 29, 2013 KASE became a full member
of the WFE. KASE has completed extensive
five-year long work on revising and improving
its operations and services to meet the WFE
membership criteria. In September 2013 KASE
operations were assessed by WFE’s inspection
team, which included representatives of Borsa
Istanbul, Shanghai Stock Exchange, Korea
Exchange, and WFE CEO Mr. Huseyin Erkan.
KASE actively cooperates with foreign
exchanges and international associations.
In 2013, as a member exchange KASE has
participated in the events of WFE, FEAS
and the International Association of CIS
Stock Exchanges. To study foreign markets’
experience KASE representatives attended
conference on derivatives, jointly organized
by WFE and International Options Market
Association in May,Korea Financial Investment
Association’s seminar in September in Seoul,
South Korea. KASE also took part in and
in the Organization of Islamic Conference
and International Islamic Financial Markets
seminar in September in Istanbul, Turkey, and
in the second session of the Kazakh-Austrian
Business Council in November in Vienna,
Austria.
We will relaunch the market by introducing
new development strategy that focuses on
new IPOs, attraction of new investors to
the market and increase of friendliness of
the exchange services for its customers”
Historically, the highest trading volumes on
KASE remain on the currency and repo markets
but KASE aims to relaunch its stock market.
This will be achieved through active work on
IPO acquisition and reforming of the official
list. The relaunch of the market will take a few
years and lot of effort from all market players
to complete but it is necessary and crucial for
Kazakhstan’s economy.
KASE is keen to attract more investors, and
as the investor base in Kazakhstan is highly
institutionalized, we are working on several
measures to bring more retail investors to the
market. These measures include but are not
limited to information awareness campaigns.
The government program People’s IPO has
increased investors’ confidence and provided
Kazakhstan’s population with an opportunity
to invest in sound and stable enterprises. We
hope that in 2014-2015 other companies of the
To stimulate IPOs and create favorable
conditions for companies, KASE elaborated a
proposal to the regulator to introduce changes
in its listing requirements for different listing
categories making them in compliance with the
best international practice.
In October 2013 KASE together with the
International Finance Corporation (IFC)
organized a conference on domestic listing
and IPOs to promote capital raise opportunities
on the organized stock market among local
joint-stock companies. During the conference
IFC presented new instrument for corporate
governance assessment in Kazakhstan’s
companies - corporate governance scorecards.
To attract more retail investors to the market,
KASE conducted a competition among
retail investors with the support of the major
brokerage firms in November 2013. The retail
investors competed in earning the highest yield
during trading simulation with the shares from
KASE Index representative list.
In 2013 KASE conducted targeted regulatory
and marketing activities to support its initiatives
of Direct Market Access (DMA), introduction of
new clearing and settlement schemes, remote
membership and new instruments (on currency
market). As a result, DMA is available starting
February 2014 and necessary changes to
legislation and regulation will be introduced to
improve post-trade procedures.
state-owned Sovereign Wealth Fund “Samruk-
Kazyna” will go public through this program.
KASE is working on ensuring a substantial IPO
pipeline from commercial companies as well.
Generally, KASE’s objective is to successfully
implement the government strategy aimed at
ensuring sustainable and balanced growth
of the economy through diversification and
enhancement of its competitiveness, creating
favorable investment environment, increasing
investments to the economy through the capital
market, and successful entry of “blue chips” to
the national stock market.
To ensure high standards of exchange
operations we will continue our work on the
projects aimed at improving exchange clearing
and settlement schemes, risk management
system, further development of our trading
system, and improving other exchange
services.
FUTURE OUTLOOK
With plans to stimulate IPO and trading on
KASE, KASE aims to increase the share of
equities and corporate bonds market. Today
57.4 % of the average daily trading volume on
KASE account for foreign currencies and for
37.2 % for repos. The emphasis will be placed
on development of securities trading (equities
and bonds).
The nearest future plans of KASE are reforming
of listing requirements and structure of
the official list. Particularly, plans include
introduction of the new listing category for “blue
chips” - sufficiently large and stable companies
operating in Kazakhstan that conducted IPOs.
KASE is at the final stage of introducing remote
access to foreign financial market participants
and Direct Market Access opportunity to allow
clients of KASE members to access KASE
trading system directly. In the nearest future
KASE plans to enhance its settlement system
and introduce an improved robust and reliable
risk management mechanisms.
During the course of 2014-2015 KASE is
expecting new IPOs that will take place within
the framework of the People’s IPO government
program. Implementation of this program will
enable KASE to offer new attractive instruments
for secondary market trading and enhance the
liquidity of Kazakhstan’s capital market.
PAGE 59