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Federation of Euro-Asian Stock Exchanges
Astana International Exchange
“AIX was created with the aim of attracting investment in a region where the capital market has historically been underdeveloped and needed rebuilding. Traded securities were few, liquidity low, foreign investment absent – caused by a combination of domestic legislation and regulation, and an economy dominated by government ownership.
As global capital markets evolve, international investors are looking for new opportunities and jurisdictions with a regulated environment that they understand. AIX operates in such an environment – with a legal and regulatory framework familiar to foreign investors, which protects the interests of both investors and issuers. We’ve built a fully operational exchange to the highest international standards in 18 months. We use a Nasdaq matching engine that is used on 60 exchanges around the world, have onboarded more than 20 local and international brokers and have a T+2 post-trade infrastructure connected to local and international custodians.
AIX is working to develop liquidity – an obvious must for investors - through a global standard model for custody; securities borrowing and short selling program for market makers; multi-currency settlement; more efficient conversion of GDRs and shares and supporting both maker makers and research providers. All these initiatives, most of which are the first of their kind in the Central Asian region, will contribute to a more active growth of the capital market for domestic and foreign investors in Kazakhstan and the Central Asian region.
AIX currently has 24 brokers from both Kazakhstan and around the world support both local and frontier market investors. Our trading members such as WOOD & Co and Renaissance Capital, bring their expertise and strong investor relationships for the benefit of the Kazakhstan’s capital market. We are also working with a number of large Chinese banks and brokers to develop interest from mainland Chinese investors.
Timothy Bennett
Chief Executive Officer
Astana International Exchange
On March 1, WOOD & Co became a trading member of AIX. AIX selected KELER CCP and KELER CSD to provide a full suite of post-trade services to AIX’s members for equity clearing and settlement. KELER CSD is a central securities depository and a financial institution, while KELER CCP is a licensed central counterparty together with more than 25 years of experience, providing harmonized services and connections to all major securities markets. AIX CSD became an Associate member of the European Central Securities Depositories Association (ECSDA). ECSDA represents 40 national and international central securities depositories (CSDs) across 36 European countries. On 17 April 2019 ordinary shares of the first foreign issuer Polymetal International Plc were listed on AIX. AIX agreed to support the Green Investment Principles (GIP) related to investments and operations in the Belt and Road region. The principles have been announced during the 2nd Belt and Road Forum in Beijing on 25 April. The GIP was developed by China Green Finance Committee and the City of London in collaboration with other reputable international organizations. The GIP aims to build an international network for improving the management of environmental and social risks for investments in the Belt and Road region. Nasdaq’s SMARTS Market Surveillance system for real-time surveillance and monitoring of market operations functions was deployed. The set of AIX’s SMARTS alerts and reports for surveillance allows AIX, to pro-actively detect abnormal trading patterns (including spoofing, layering, collusion etc.), and to deter market abuse in all types of assets (equities and fixed income). The solution is also scalable and can easily expand to cover future asset classes as required. Kazpost JSC and Renaissance Capital investment company became trading members of AIX. It allows to expand access for a large base of retail investors across many regions of Kazakhstan through Kazpost, and by institutions in the region through one of the leading independent investment companies in the frontier and emerging markets.
AIX launched mobile application for retail investors “AIX Connect”. The application provides users with convenient and quick access to the news of AIX and its listed companies, as well as real-time market data. The application is available to users of Android and iOS smartphones on Google Play and the Apple Store.
On 16 August 2019 units of ITI Funds Russia focused USD Eurobond UCITS ETF SICAV were listed.
We are off to a good start. Equity capital raised on AIX over the last year is $217mln which is several times more than in the last three years in Kazakhstan.. Over the past 12 months, the foreign investors market share increased from 0% to 45%. As of 31 December 2019 AIX has 5 actively traded equities, 28 debt instruments and 7 exchange traded notes or funds, 5 of which AIX itself listed last year.
To further develop the market, we are in the process of developing a simplified regulatory framework for smaller, mid-sized Kazakh businesses. Larger businesses can access global markets such as London, but it’s obvious that smaller businesses cannot. We want to be able to start to build both retail and small institutional demand for these businesses which are at the core of the Kazakh economy. .
There was nothing here 18 months ago. We have built a good foundation, now we have 20 or 30 different initiatives, pieces of a jigsaw puzzle that we’re gradually pulling together over the next couple of years to build a vibrant market. Clearly, private sector debt and equity issuance is part of that. It is not going to happen overnight, but we are making good progress there.”
Exchange Overview