Transcript KASE Standard Presentation dated March 1, 2008

INTRODUCING THE KAZAKHSTAN
STOCK EXCHANGE (KASE)
Relevant as at March 1, 2008
COEVAL WITH TENGE …
KASE was established on November 17, 1993 under the name
of Kazakh Interbank 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".
"Old" tenge
(1993–2006)
"New" tenge
(since 2006)
YOUNG AND SINGLE …
KASE is a commercial joint-stock company with 69 shareholders
(as of January 31, 2008). The National Bank of the Republic of
Kazakhstan 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.
YOUNG AND SINGLE … (2)
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-thecounter securities market )
YOUNG AND SINGLE … (3)
1998 – first trades with eurobonds of Kazakhstan
1999 – first trades with listed corporate bonds
1999 – 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 notes
2003 – first trades with foreign T-bills (Russia 2028 & Russia 2030 )
YOUNG AND SINGLE … (4)
2006 – first trades with foreign corporate bonds (JP Morgan and Merrill
Lynch)
2006 – IPO of KazMunayGas Exploration and 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
IMPRESSIVE DYNAMICS …
350
322.5
Other
USD bn
Repo
300
Corporate securities
250
Public securities
Derivatives
200
169.3
Currencies
USD bn
150
100
38.1
USD bn
50
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
01.03.08
IMPRESSIVE DYNAMICS … (2)
322.5
350
350
USD bn
KASE, USD bn
300
308.6%
300
% to GDP
250
250
GDP, USD bn
200
200
169.3
USD bn
150
150
100
100
20.5
50
USD bn
0
50
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007 01.03.08
UNIVERSAL EXCHANGE …
Out of the scheme:
STF RFCA,
2.9 USD m (0.01%)
Currencies,
10,277.5 USD m
27,0%
2 m 2008:
38,054.9
51,4%
Corporate securities,
757.0 USD m (2.0%)
USD m
Autorepo with public
securities,
19,563.6 USD m
2,6%
4,3%
12,0%
Direct repo with public securities,
229.6 USD m (0.6%)
Public securities,
1,001.3 USD m
Direct repo with corporate
securities, 1,655.3 USD m
Autorepo with corporate
securities, 4,567.8 USD m
Repo (money) market constitutes for 68.4% of total KASE turnover
UNIVERSAL EXCHANGE … (2)
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-bills
 promissory notes
 equities
 corporate bonds …
VARIETY OF CORPORATE BONDS
 "regular" domestic bonds (nominated in Tenge or foreign
currencies, with discount or coupon, with fixed or floating
coupon)
 international bonds of Kazakhstani issuers
 agency 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)
DOMINATION OF REPO AND FOREX MARKETS
KASE repo market is specially designed for domestic purposes –
to satisfy the needs of local pension funds and banks in shortterm money borrowing and lending.
KASE foreign currencies market – the basic trading site 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.
LISTED COMPANIES (by categories)
Shares
Corporate bonds
31 31 31
Category "A"
Category "B"
27
61
20
7
9 13
9
8
13
8 12
20
27 30
62 62
Category "A"
Category "B"
32
38 39 40
1999 2000 2001 2002 2003 2004 2005 2006 2007 Feb
2008
30
1
34 39
10 20
1 2 6 11 6
49
7
17
28 29
1999 2000 2001 2002 2003 2004 2005 2006 2007 Feb
2008
LISTED COMPANIES (in total)
TOTAL
Shares
Corporate bonds
69
68
68
62
91
54
89
40
114
78
17
17
1
11
21
25
45
45
56
68
1999 2000 2001 2002 2003 2004 2005 2006 2007 Feb
2008
133
94
49
36
22
79
126
17 23
32
1999 2000 2001 2002 2003 2004 2005 2006 2007 Feb
2008
MARKET CAPITALIZATION (USD bln)
16
70
Shares
14
60
as of February 29, 2008 –
55.8 bn USD
50
12
Corporate bonds
as of February 29, 2008 –
11.7 bn USD
10
40
8
30
6
20
4
10
2
0
0
2001
2002
2003
2004
2005
2006
2007
2008
2001 2002 2003 2004 2005 2006 2007 2008
LISTED COMPANIES (by structure)
Shares
Corporate bonds
100%
90%
Energy/power
engineering
Finance
Telecommunication
services
Raw materials sector
80%
70%
60%
Industry
50%
Main consumer sector
40%
30%
Public sector
20%
Information technology
10%
Health protection
0%
2000 2001 2002 2003 2004 2005 2006 2007 Feb
2008
2000 2001 2002 2003 2004 2005 2006 2007 Feb
2008
Discretionary consumer
sector
Global Industry Classification Standard (GICS) of S&P is used
"PURE" CORPORATE SECURITIES MARKET
8,0
7,0
6,0
5,0
Turnover, USD bn
9,0
Corporate bonds
Shares
4,0
3,0
2,0
1,0
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Feb 2008
Total KASE turnover for 2 months of 2008 with shares – 431.1 USD m,
with corporate bonds – 291.0 USD m
"PURE" CORPORATE SECURITIES MARKET (2)
140
120
100
80
Daily turnover, USD m
160
Shares
Corporate bonds
60
40
20
0
2004
2005
2006
2007
In 2008 average daily KASE turnover with shares – 10.5 USD m,
with corporate bonds – 7.1 USD m
2008
"PURE" CORPORATE SECURITIES MARKET (3)
The main problems are:
• lack of free-float equities (the heritage of case-by-case
privatization)
• conservative policy of main domestic investors ("buy bonds
and hold till maturity")
Nevertheless ..
CHAMPION GROWTH (in 2005–2007)
2 856
(19.07.07)
1,193
3000
2,195
1,074
2 808
2 394
300
(12.02.07)
(19.04.06)
2500
250
2 701,84
2 387
(20.08.07)
2000
1 722
1500
(29.02.08)
200
Shares volume,
m USD
150
(30.10.06)
1 642
(18.05.06)
1000
100
KASE Index
500
216
50
(05.01.05)
01.01.08
01.10.07
01.07.07
01.04.07
01.01.07
01.10.06
01.07.06
01.04.06
01.01.06
01.10.05
01.07.05
01.04.05
0
01.01.05
0
INVESTOR BASE …
180
160
120
Unit investment funds assets
140
Insurance assets
120
Pension assets
100
Banks assets
80
60
Total assets, % to GDP
GDP
100
80
60
40
40
20
20
0
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Institutional investors assets
at the end of 2007 reached
108.5 bn USD, 88.3% of
them are banks assets,
8.8% – pension assets
Principal indicator is growth
of unit investment funds
assets (at the end of 2006 –
422 m USD)
ADVANCED TECHNOLOGIES
KASE uses it’s own trading platform:
 on-screen based electronic "Server – Client" system
 remote access
 electronic signature and electronic documents circulation
 traffic encryption
 on-line data saving
Central Depository is the KASE subsidiary:
 DVP
 T+0 settlement basis
IN THE FUTURE …
• Waiting for IPO of the largest Kazakhstan banks and producers (according
to the Securities Law, at least 20% of the local shares being placed must be suggested
at the domestic market for purchase)
• Administrating the Special trading site of the Almaty Regional Financial
Center (set-up to attract foreign issuers and investors)
• Welcoming the new listing companies
• Waiting for IFOs to place their bonds in Kazakhstan
• Ready to introduce T+n settlement basis for the foreign operators (only for
eqities)
•
•
•
•
•
Launching currency swap market
Listing unit funds units
Holding active marketing campaigns
Modifying trading system
Launching new version of KASE web-site
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 av., Almaty, Kazakhstan