kazakhstan stock exchange inc (kase) relevant as at july 1, 2008
TRANSCRIPT
KAZAKHSTAN STOCK EXCHANGE INC (KASE)
Relevant as at July 1, 2008
COEVAL OF TENGE …
KASE was established on November 17, 1993 under the name of Kazakh Inter-bank Currency Exchange – two days after Tenge (the new national currency of Kazakhstan) was introduced on November 15, 1993.
Nowadays, November 15 is celebrated as the official "Day of Tenge".
"New" tenge (since 2006)
"Old" tenge (1993–2006)
NOW COMMERCIAL
KASE is a commercial joint-stock company with 72 shareholders (as of July 1, 2008). The Regional Financial Center of Almaty JSC is the largest shareholder. Other shareholders include: banks, brokerage firms, asset management companies, pension funds and other professional financial institutions.
Voting method: one share – one vote.
THE SIZE MATTERS
As of July 1, 2008
own capital $9.6 m
paid up charter capital $1.4 m
issued shares 450
offered shares 450
share balance value 2.6 m tenge
SO DOES THE PROFIT
assetsnet
profitreturn
on assetsreturn
on equity
2007 $11.9 m $1.8 m 17.8% 20.2%
2006 $8.3 m $2.2 m 32.5% 34.3%
2005 $5.2 m $1.3 m 29.0% 30.4%
Total number of members – 100 of which:
WE ARE BIG IN NUMBERS
Category "A" (with the right of participation in trades in all financial instruments, circulating on the special trading floor of the Regional Financial Center of Almaty ) – 48;
Category "B" (with the right of participation in trades in foreign currency ) – 30;
Category "C" (with the right of participation in trades in fixed-term contracts ) – 4;
Category "K" (with the right of participation in government securities ) – 80;
Category "P" (with the right of participation in trades in corporate serial securities, listed on the official list of the Exchange ) – 80;
Category "H" (with the right of participation in trades in corporate serial securities, admitted to circulation (trading) in the sector "Non-listing securities" of the Trading system of the Exchange, and state blocks of shares of privatized organizations ) – 46.
WE MAKE THE HISTORY (1)
Today KASE is the single universal financial exchange in Kazakhstan with brief but bright history:
1993 – first trades with foreign currency (US dollars)
1995 – first trades with T-bills
1996 – first trades with derivatives (KZT/USD exchange rate futures)
1997 – first trades with listed shares
1997 – first trades with state blocks of shares
1997 – first trades with non-listed corporate securities
1998 – launching of "nego" deals system on KASE (instead of over-the-counter securities market )
WE MAKE THE HISTORY (2)
1998 – first trades with eurobonds of Kazakhstan
1999 – first trades with listed corporate bonds1999 – first trades with municipal bonds (since 2005 the issuance of these bonds is prohibited)
1999 – launching of the "nego" repo market
2001 – first trades with bonds of international financial organizations (IFO)2001 – launching of "automatic" repo market (the most massive and active sector of the KASE market)
2002 – first trades with promissory notes2003 – first trades with foreign T-bills (Russia 2028 & Russia 2030 )
WE MAKE THE HISTORY (3)
2006 – first trades with foreign corporate bonds (JP Morgan and Merrill Lynch)
2006 – IPO of KazMunaiGas Exploration Production shares with the use of KASE settlement system
2006 – secondary distribution of KAZAKHMYS PLC (UK) shares with the use of KASE settlement system
2007 – special trading floor of the Regional Financial Center of Almaty city was founded on the base of KASE (founded to attract foreign issuers and investors)
2007 – launch of the new index on the share market – KASE Index, which continued the number series of KASE_Shares Index
2007 – commercialization of KASE
KASE – UNIVERSAL MARKET (1)
Repo (money) market constitutes for 63.2% of the total KASE turnover
30,8%
49,4%
2,8%
3,7%10,8%
Nego repo with corporate securities, USD 5,004.4 m
Autorepo with public securities,
USD 59,291.4 m
Corporate securities,USD 2,555.4 m (2.1%)
Public securities,USD 3,073.0 m
Autorepo with corporate securities, USD 11,993.1 mDirect repo with public securities,
USD 664.2 m (0.5%)
Currencies,USD 38, 783.2 m
STF RFCA,USD 455.3 m (0.4%)
6 m 2008:121,819.9
USD m
Repo (money) market constitutes for 63.2% of the total KASE turnover
30,8%
49,4%
2,8%
3,7%10,8%
Nego repo with corporate securities, USD 5,004.4 m
Autorepo with public securities,
USD 59,291.4 m
Corporate securities,USD 2,555.4 m (2.1%)
Public securities,USD 3,073.0 m
Autorepo with corporate securities, USD 11,993.1 mDirect repo with public securities,
USD 664.2 m (0.5%)
Currencies,USD 38, 783.2 m
STF RFCA,USD 455.3 m (0.4%)
6 m 2008:121,819.9
USD m
KASE serves the markets of: "nego" and "automatic" repo with public and corporate
securities foreign currencies (US dollar, euro, Russian rouble)public securities of Kazakhstan issued by the National Bank,
municipalities and Ministry of Finance (including international bonds of Kazakhstan)
IFO bonds and foreign T-billspromissory notesequities corporate bonds …
KASE – UNIVERSAL MARKET (2)
"regular" domestic bonds (nominated in Tenge or foreign currencies, with discount or coupon, with fixed or floating coupon)
international bonds of Kazakhstani issuersagency bonds (with the tax regime equal to the tax regime of
T-bills) infrastructural bonds (secured by the government guarantee)bonds of foreign issuers (previously registered outside
Kazakhstan) soon: bonds of foreign issuers (registered in Kazakhstan)
A GREAT VARIETY OF BONDS
REPO AND FOREX MARKET DOMINANCE
KASE repo market is specially designed for domestic purposes – to satisfy the needs of local pension funds and banks in short-term money borrowing and lending.
KASE foreign currencies market – the basic trading floor for the National Bank of the Republic of Kazakhstan to regulate the exchange rate of Tenge.
KZT/USD: the KASE exchange rate today = official exchange rate tomorrow.
STRIKING DYNAMICS (1)
0
50
100
150
200
250
300
350
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 01.07.2008
Repo
Corporate securities
Public securities
Derivatives
Currencies169.3USD bn
322.5USD bn
121.8USD bn
0
50
100
150
200
250
300
350
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 01.07.2008
Repo
Corporate securities
Public securities
Derivatives
Currencies169.3USD bn
322.5USD bn
121.8USD bn
STRIKING DYNAMICS (2)
0
50
100
150
200
250
300
350
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 01.07.2008
0
50
100
150
200
250
300
350
KASE, USD bn
% to GDP
GDP, USD bn
308.6%
169.3USD bn
322.5USD bn
121.8USD bn
0
50
100
150
200
250
300
350
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 01.07.2008
0
50
100
150
200
250
300
350
KASE, USD bn
% to GDP
GDP, USD bn
308.6%
169.3USD bn
322.5USD bn
121.8USD bn
MARKET CAPITALIZATION (USD bn)
0
10
20
30
40
50
60
70
80
90
100
2001 2002 2003 2004 2005 2006 2007 2008
Shares
0
2
4
6
8
10
12
14
16
2001 2002 2003 2004 2005 2006 2007 2008
Corporate bonds
as of June 30, 2008 –USD 95.2 bn
as of June 30, 2008 –USD 12.0 bn
0
10
20
30
40
50
60
70
80
90
100
2001 2002 2003 2004 2005 2006 2007 2008
Shares
0
2
4
6
8
10
12
14
16
2001 2002 2003 2004 2005 2006 2007 2008
Corporate bonds
as of June 30, 2008 –USD 95.2 bn
as of June 30, 2008 –USD 12.0 bn
LISTED COMPANIES (total)
17 2332
4968
7994
114126 134
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
TOTAL
17 1721
54
62
7669
25
40
6897
89
1
78564545
36
1122
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Shares
Corporate bonds as ofJuly 1
as ofJuly 1
17 2332
4968
7994
114126 134
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
TOTAL
17 1721
54
62
7669
25
40
6897
89
1
78564545
36
1122
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Shares
Corporate bonds
17 2332
4968
7994
114126 134
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
TOTAL
17 1721
54
62
7669
25
40
6897
89
1
78564545
36
1122
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Shares
Corporate bonds as ofJuly 1
as ofJuly 1
LISTED COMPANIES (by category)
14 189 8 8 12
2027 30
38
3941
7 9 1313
20
2732
31
3133
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Category "A"Category "B"Category "C"
Shares
21 236 11 6 7
17
29 29
3034 39
49
61
62 63
21
20
102
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Category "A"Category "B"Category "C"
Corporate bondsas of
July 1
as ofJuly 1
14 189 8 8 12
2027 30
38
3941
7 9 1313
20
2732
31
3133
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Category "A"Category "B"Category "C"
Shares
21 236 11 6 7
17
29 29
3034 39
49
61
62 63
21
20
102
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Category "A"Category "B"Category "C"
Corporate bonds
14 189 8 8 12
2027 30
38
3941
7 9 1313
20
2732
31
3133
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Category "A"Category "B"Category "C"
Shares
21 236 11 6 7
17
29 29
3034 39
49
61
62 63
21
20
102
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Category "A"Category "B"Category "C"
Corporate bondsas of
July 1
as ofJuly 1
LISTING COMPANIES (by industry)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000
2001
2002
2003
2004
2005
2006
2007
01.0
7.08
Energy/powerengineeringFinance
TelecommunicationservicesRaw materials sector
Industry
Main consumer sector
Public sector
Information technology
Health protection
Discretionary consumersector
Shares
2000
2001
2002
2003
2004
2005
2006
2007
01.0
7.08
Corporate bonds
Global Industry Classification Standard (GICS) of S&P has been used
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000
2001
2002
2003
2004
2005
2006
2007
01.0
7.08
Energy/powerengineeringFinance
TelecommunicationservicesRaw materials sector
Industry
Main consumer sector
Public sector
Information technology
Health protection
Discretionary consumersector
Shares
2000
2001
2002
2003
2004
2005
2006
2007
01.0
7.08
Corporate bonds
Global Industry Classification Standard (GICS) of S&P has been used
CS MARKET LIQUIDITY (1)
Total KASE turnover for 6 months of 2008 in shares – USD 1,784.2 m,in corporate bonds – USD 1,205.5 m
4,1
2,9
8,9
2,5
0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
10,0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 June
2008
Corporate bonds
Shares
Turn
over
, USD
bn
Total KASE turnover for 6 months of 2008 in shares – USD 1,784.2 m,in corporate bonds – USD 1,205.5 m
4,1
2,9
8,9
2,5
0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
10,0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 June
2008
Corporate bonds
Shares
Turn
over
, USD
bn
CS MARKET LIQUIDITY (2)
Average daily KASE turnover for 6 months of 2008 in shares – USD 13.0 m,in corporate bonds – USD 9.7 m
0
20
40
60
80
100
120
140
160
2004 2005 2006 2007 2008
SharesCorporate bonds
Daily
turn
over
, USD
m
Average daily KASE turnover for 6 months of 2008 in shares – USD 13.0 m,in corporate bonds – USD 9.7 m
0
20
40
60
80
100
120
140
160
2004 2005 2006 2007 2008
SharesCorporate bonds
Daily
turn
over
, USD
m
MAIN PROBLEMS OF THE MARKET
The main problems are:• lack of free-float equities (the heritage of case-by-case
privatization)• conservative policy of the main domestic investors ("buy
bonds and hold till maturity")
OUR INDEX
2 609
(30.06.08)
2 856
(19.07.07)
2 387
(20.08.07)
1 589
(05.06.06)
2 808
(12.02.07)2 394
(19.04.06)
2 858
(21.02.08)
0
700
1400
2100
2800
3500
4200
01
.01
.05
01
.04
.05
01
.07
.05
01
.10
.05
01
.01
.06
01
.04
.06
01
.07
.06
01
.10
.06
01
.01
.07
01
.04
.07
01
.07
.07
01
.10
.07
01
.01
.08
01
.04
.08
01
.07
.08
0
50
100
150
200
250
300
KASE Index
Market share deals volume, USD m.
682.0
216
(05.01.05)
689.3
503.3 391.6
KASE uses its own trading platform:
on-screen based electronic "Server – Client" system
remote access
electronic signature and electronic documents circulation
traffic encryption
on-line data saving
ON OUR TECHNOLOGIES
CONTACT US …
Internet: www.kase.kz
e-mail: [email protected]
phone: (+7 727) 237 53 00, 272 98 98, 237 53 11, 272 06 00
fax: (+7 727) 296 64 02, 272 09 25
address: 291/3a, Dostyk ave, Almaty, Kazakhstan