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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2011
KAZAKHSTAN STOCK EXCHANGE
Kadyrzhan Damitov
President
2010 was a positive year for Kazakhstan –
it brought noticeable improvements in
economic situation in the country and
positive dynamics in the domestic capital
market.
2010 was a positive year for Kazakhstan – it
brought noticeable improvements in economic
situation in the country and positive dynamics
in the domestic capital market.
Combined trade volume on KASE increased by
33.9% over the course of the last year and
reached USD 206.5 bn. Funds raised through
KASE corporate bonds primary market equaled
USD438.8 m and became the record large in
KASE history. We see it mainly as a result of
coordinated actions of government and
professional financial market participants.
Hopefully this positive process will strengthen
and continue producing positive results.
KASE has also accomplished a lot last year.
The Exchange’s Development Strategy for
2007-2010 was completed and the time has
come to set up new goals that would allow
KASE, as major infrastructure institution of
Kazakhstani financial market, to continue its
development in a post-crisis period. For the
upcoming three years KASE has already
defined top priorities including introduction of
international standards in trading and
settlement operations, as well as improving
liquidity and attractiveness of Kazakhstani
stock market.
Some of the major results of our efforts
include, but not limited to: strengthening
international cooperation and adoption of best
international standards and practices of the
exchange operation.
We appreciate that our colleagues, including
FEAS members have highly evaluated our
efforts. One of the most valuable achievements
for KASE is a membership at FEAS Executive
Committee. KASE highly appreciates the status
of the first exchange from Central Asia in FEAS
Executive Committee and the honor of
becoming a host of the 17th FEAS General
Assembly that will take place in Almaty –
Kazakhstan’s financial Center in fall 2011.
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.
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.
The stock market in 2009 also reflected global
trends. While the first half of the year was rich
with events resulting from the global financial
crisis – depreciation of local currency,
increasing number of corporate defaults on the
corporate debt market; relative stabilization of
the economy in general and the financial
market in particular showed the first positive
signs of recovery in the second half of 2009. To
respond to increased uncertainly of the market
environment, KASE introduced a number of
regulatory changes to improve market stability
and increase transparency.
In 2010, KASE has launched Capacity Building
Project aimed at the improvement of market
liquidity and quality of services provided by
KASE to its issuers and investors. This project
was funded by the European Bank for
Reconstruction and Development (EBRD) and
implemented in partnership with Wiener Boerse
AG and its counterparty consulting company
CAPMEX (The Capital Market Experts). KASE
is about to adopt a new development strategy
for the next three years, which would reflect
recommendations made by the consultants
within the framework of this project. Also, in fall
2010 KASE launched derivatives market,
introducing currency and Index futures.
As announced by the President of the Republic
of Kazakhstan KASE is expecting a number of
new IPO events of Kazakhstani “blue chip”
companies in 2011 and 2012. The government
decided to partially privatize several companies
currently owned by the Sovereign Wealth Fund
“Samruk-Kazyna”. This would create a great
opportunity for Kazakh citizens to invest into
national “blue chips”.
FUTURE OUTLOOK
2010 marked the year of productive
cooperation of Kazakhstan stock exchange
(KASE) with colleagues from Wiener Boerse AG
and its consulting partner – CAPMEX (The
Capital Market Experts) that allowed KASE to
gain a new perspective on its development path
and a new vision for the future years to come.
Entering 2011 KASE is determined to pursue a
goal of becoming an attractive stock exchange
for domestic and international investors and
issuers, professional market participants, by
continuously expanding the range and quality
of available services and ensuring compliance
with international standards.
We are aimed at improving market liquidity by
upgrading our trading system and
simultaneously enhancing the level of services.
KASE is aimed at merging its extensive
expertise with the world's best practices to
increase its productivity benchmarks, upgrade
its settlement system to T+n (n>0) and
introduce a central counterparty (CCP) function
(with liabilities limited to the reserve fund).
Moreover, KASE is determined to further
develop its derivatives market with currency and
index futures launched in early December 2010
by organizing marketing campaigns, education
programs aimed at attracting a larger number
of participants.
Upon entering the new decade of the 21st
century KASE is facing a highly competitive
world where high-frequency traders and
alternative trading platforms change the
landscape of the financial system. KASE is
valuing the change as a call for a proactive
decision making with prompt actions and
strong expertise. We are therefore will continue
to work with regulators, market participants and
international organizations to establish a
transparent, secure and reliable market.
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