FEDERATION OF EURO-ASIAN STOCK EXCHANGES
SEMI ANNUAL REPORT OCTOBER 2006
KAZAKHSTAN STOCK EXCHANGE
In 2005, on a favorable background of
general growth of economy the Kazakhstan
securities market continued to develop.
Azamat Joldasbekov
President
Work on further development of the
Kazakhstan Stock Exchange (KASE) was
carried on in 2005. In spite of the fact that lot
of planned tasks were put into practice,
many of them should be continued to keep
on. Therefore in the year of 2006 we plan to
complete tasks started in 2005 such as
completing and launching a new version of
the KASE website.
On a favorable background of general
growth of economy in 2005 the Kazakhstan
securities market continued to develop in the
view of tendencies of former previous three
years and did not change its key features.
The KASE trade volumes were increased to
US$ 80.4 billion or 143.9% of GDP. The
HISTORY AND DEVELOPMENT
KASE (previously the Kazakhstan Interbank
Currency and Stock Exchange) was founded
on 17 November 1993 as a closed-end joint-
stock 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 the
securities of the largest enterprises of
Kazakhstan.
In September 1997, a closed joint-stock
company, the Almaty Financial Instruments
Exchange, (AFINEX) separated from KASE.
Two exchanges resulted from the adoption,
in March 1997, the law “On Securities
Market” established the provision that a
stock exchange could only operate in
securities.
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structure of KASE turnover in 2005 did not
undergo fundamental changes. And, as
before, the main growth of the KASE turnover
comes from the repo transactions 75.7%.
Turnover of securities market sector reached
US$ 2.0 billion, though it is only 3.4% of total
KASE turnover.
During 2005, jointly with the Agency of the
Republic of Kazakhstan on regulation and
the supervision of financial market and
financial organizations, the Association of the
financiers of Kazakhstan and other securities
market participants, including the KASE
played an active role in the development of
legislative base concerning the securities
market.
However, on 1 April 1999, a merger took
place between KASE and the AFINEX, thus
making KASE the only organized market in
Kazakhstan.
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
changed its 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”.
The most important events of the 2005 are:
• the transference of T-bills initial
(placement) market from the National Bank
to the KASE;
• the appearance of infrastructure bonds;
• the appearance of the first mutual
investment funds in Kazakhstan;
• the admission of first foreign (Russian)
T-bills to the circulation on the KASE; and
• the legal registration of PTPC Ltd.– KASE
subsidiary which will be used as the stand-
by trading and settlement center in case of
emergency.
FUTURE OUTLOOK
The Program on Kazakhstan Securities
Market Development for the years
2005–2007 adopted by the Kazakhstan
government at the end of 2004 determined
the main directions of further development
and established priority tasks. Part of them
directly touches the activity of KASE.
The main challenge for KASE in 2006 is to
complete the projects which were started in
2005 and earlier. So, the main targets of
KASE in 2006 are:
• to continue the optimization of listing
requirements and procedures, including
ones related to foreign securities and units
of mutual investments funds, which recently
appeared in Kazakhstan and are supposed
to become the new moving engine of the
securities market;
• to complete and to launch the new version
of the KASE website; and
• to develop the system of market indices
and indicators.