JUNE 2013 - FEAS

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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013KAZAKHSTAN STOCK EXCHANGEHISTORY AND DEVELOPMENTOne of the major events last year was thefirst IPO that took place in the framework ofthe “People’s IPO”. This initiative is aimed toprivatization through IPOs on KASE of 5-15%of the first rate companies that belong to the“Sovereign Wealth Fund “Samruk-Kazyna”.Among companies considered for IPOsare national conglomerates with a proventrack record of progress and stability. Asone of the major participants of this projectimplementation KASE prioritized its mediumandlong-term plans to successfully support andimplementation of these IPOs.Thanks to the efforts of all program participants,the first People’s IPO of KazTransOil (oiltransportation and pipelines company) tookplace in November 2012. The order book wasopen on November 6, 2012 for one month.More than 34 000 individuals and 10 pensionfunds subscribed. The demand was more thantwo times higher than supply and amounted to59.4 billion Tenge (ca. 400 m US$). Individualsinvested in the amount of 22 billion Tenge (147million US$).Right after the KazTransOil IPO a private mobileconnection provider KCell had an IPO onKASE with a dual listing on LSEG. Placementof the ordinary shares of KCell on KASE viasubscription and special trades attracted 7.5billion Tenge (50 million US$) totaling to 9.44%of the total issue.Another significant event was successfulplacement of the Islamic securities on KASEimplemented in August, 2012 by KazakhstanDevelopment Bank “Sukuk Al-Mubarakha” forthe amount of 240 m Malaysian Ringgits (ca.77.7 m US$) with the annual interest rate of5.50% within 5 years of maturity period. 62%of the issue was distributed among Malaysianinvestors and 38% was offered to Kazakhstaniinvestors on KASE.Within the framework of FEAS bi-lateralexchange program KASE had an opportunity tovisit Bulgarian Stock Exchange in February 2012and thanks to the hospitality of the Bulgariancolleagues get acquainted with the stockexchange operations and the current statusof Bulgarian financial market. In addition, in2012 KASE continued its cooperation with theOrganization for Economic Cooperation andDevelopment (OECD) on corporate governanceimprovement in Eurasian capital markets.Finally, KASE signed a contract with WienerBoerse AG aimed at calculation and promotionof KASE indexes. A tradable index KTX Localwas launched on January 29, 2013 with thefollowing most liquid shares selected byconsidering the monthly trading value and thenumber of active trading days:CompanyWeightingENRC 20.18%KAZMUNAIGAS EP 19.82%KAZAKHMYS 19.52%HALYK SAVINGS BANK 14.05%KCELL 12.31%KAZTRANSOIL 6.56%KAZAKHTELECOM 6.04%KAZKOMMERTSBANK 1.52%FUTURE OUTLOOKFollowing successful implementation of someof the major projects in 2012, during 2013 KASEis planning to fulfill the remaining projects thatwere planned in the framework of 2011-2013Development Strategy of the stock exchange.One of the important projects planned for 2013is full membership at the World Federationof Exchanges. KASE has already submittedthe letter of intent, which was reviewed byWFE Board of Directors, and is preparingfor successful implementation of the WFEaccession procedure.During the course of 2013-2015 KASE isexpecting new IPOs that will take place withinthe framework of the People’s IPO program.Implementation of this program will enableKASE to offer additional attractive instrumentsfor secondary market trading by local andforeign market participants and enhance theliquidity of Kazakhstani capital market.KASE is planning to continue upgradingexisting trading and post-trading systemsaimed at creation of technical framework forintroduction of new instruments and ensuringeasy and efficient access to the market. KASEis committed to development of our market’s ITinfrastructureboth in a short-term and in a longtermprospective to ensure compliance withlocal and international investors’ requirements.CONTACT INFORMATIONContact Name Ms. Amina Turgulova E-mail amina@kase.kz Website www.kase.kzPAGE 56
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013KAZAKHSTAN STOCK EXCHANGECAPITAL MARKET DEVELOPMENTAND ECONOMIC OUTLOOKDevelopment of the Kazakhstani securitiesmarket is one of the major objectives of thegovernment of the Republic of Kazakhstan,which recognizes the importance ofdeveloped capital market and its impact onoverall economic growth of the country andon ensuring financial stability, improvingfinancial sector sustainability and encouraginginvestment inflows.As a result of changes in legislation startingfrom the January 1, 2013 the IntegratedSecurities Registrar was created. The IntegratedSecurities Registrar is mainly aimed to minimizerisks of the issuers as well as rights of securitiesholders. The Integrated Securities Registrarallows the regulator to maintain the controlfunction more effectively.Currently the idea to unite the existing pensionfunds into one integrated pension fund underthe government of the Republic of Kazakhstanis being discussed. Pension funds consolidationwill reduce operational costs associated withthe registration and storage of pension assets,administrative expenses and branch network.Establishment of the Customs Union betweenKazakhstan, Russia and Belarus three yearsago has marked a major change in the path ofregional integration with important implicationsfor Kazakhstan. The ultimate goal is the creationof a Eurasian Union preceded by establishedin July 2012 Common Economic Space forthe market of 170 million people. Kazakhstanis also pursuing accession to the World TradeOrganization (WTO) which is planned for 2013.Economic Performance2012 was a quite positive year for Kazakhstanin terms of economic performance. TheGDP growth made up 5.0% in 2012.. Theunemployment rate has decreased to 5.3%.Net international reserves amounted to US$27.7 bn. National Fund assets have increased.The inflation rate made up 6.1% in comparisonwith the previous year. Current account surplusamounts to US$ 7.8 bn.Kazakhstan is number one in terms of foreigncurrency rating among CIS countries standingclose to Thailand, Ireland and South Africa. InNovember, 2012 Fitch also increased the ratingsof the Republic of Kazakhstan: the long-termratings of obligations in foreign currency from“BBB-” to “BBB”, those in the national currency- from “BBB” to “BBB+”, the outlook on theratings is “positive”.Key Information ContactsMinistry of Finance of the Republic of Kazakhstan www.minfin.kzNational Bank of Kazakhstan www.nationalbank.kzCommittees of the National Bank of the Republic of Kazakhstan for Financial Market and Financial Organizations Regulation and Supervision www.afn.kzFinancial Institutions’ Association of Kazakhstan www.afk.kz/eng/Central Securities Depository www.csd.kzPAGE 57
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JUNE 2013 - FEAS

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