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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT MAY 2005
KAZAKHSTAN STOCK EXCHANGE
Azamat Joldasbekov
President
In the year of 2004 the organized securities
market of Kazakhstan continued to develop
in the same manner of previous years. The
development of the market was foremost
characterized by the growth of trade
volumes. The Kazakhstan Stock Exchange
(KASE) turnover reached an equivalent of
US$ 58 billion.
HISTORY AND DEVELOPMENT
KASE (previously the Kazakhstan Interbank
Currency and Stock Exchange) was founded
on 17 November 1993 as a closed-end jointstock
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 KASE was the introduction of the
national currency, the Kazakhstan tenge, on
15 November 1993.
Starting in November 1995, KASE began
trading state T-bills. In November 1996, it
received its securities trading license from
the National Securities Commission (NSC).
As a result of a proposal tendered by the
government in December 1996, KASE was
chosen as a model exchange to trade
securities of the largest enterprises of
Kazakhstan.
In September 1997, a closed joint-stock
company, the Almaty Financial Instruments
Exchange, separated from 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 KASE and the Almaty
Financial Instruments Exchange (AFINEX),
thus making KASE the only organized
market in Kazakhstan.
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The development of the market was
foremost characterized by the growth of
trade volumes. The KASE turnover reached
an equivalent of US$ 58 billion.
Significant changes have occurred during
2004:
• the advanced version of our electronic
trading system was successfully launched in
January, 2005;
• according to the Government's decision
the primary T-bill market was to be relocated
to the KASE since the beginning of 2005; as
a result, the year of 2004 was used by us to
fulfill all necessary legal and technical
preparations for such cordial change; and
• foreign securities started to be traded on
the KASE: T-bills (Russia) and corporate
securities – shares of PetroKazakhstan Inc
(Canada).
In 2001 KASE became a shareholder of the
Kyrgyz Stock Exchange.
The most important event of 2003 year was
the passage of two new laws that determine
legal infrastructure of the stock market – the
law "On joint stock companies" and the law
"On securities market" that substituted the
laws of previous years. In October, 2003
KASE with its new subsidiary company
"eTrade.kz" LLP launched the "eTrade.kz"
project. The purpose of the project was the
organization of an internet-trading system to
carry out the operations with the financial
instrument at KASE.
At the beginning of 2004 the KASE will
change organization-legal structure from a
"closed joint stock company" to a "joint stock
company" as a result of the newly
implemented changes in the
aforementioned law, “On joint stock
companies”.
In order to meet the more complicated
requirements of market regulation, we
created 2 new sub-divisions: the Supervision
department and the Monitoring subdepartment
under the Listing department.
Our main tasks for 2005 are to:
• modify the Listing rules;
• re-fresh the KASE basic legal framework;
• modernize our main information
technologies; and
• launch a completely new version of the
KASE web-site.
FUTURE OUTLOOK
By the resolution of Kazakhstan government
a program was approved on securities
market development for the years 2005-
2007. Within the framework of this program,
in 2005, the Exchange will revise listing
rules, in order to bring them into conformity
with the new legislation and include changes
concerning the dividing of the two official
categories of the exchange's trading list into
subcategories.
The plans of KASE for 2005 include:
• adding requirements for listing companies
concerning requiring the presentation of
information about using corporate
governance norms;
• organizing an initial offering of government
bonds (T-bonds) on the stock exchange;
• creating a reserve center, which could be
used as a reserve trade platform in case of
emergency. For realizing this task it's
planned to found a subsidiary company,
whose competence will comprise the
reserve copying and storing of information
of the trade organizer and central
depository;
• developing and launching new indexes of
the stock market;
• re-designing and launching an updated
version of the KASEs website with improved
navigation and some new features; and
• adding the participation of unit investment
funds on the stock exchange.