INTRODUCING KAZAKHSTAN STOCK EXCHANGE INC' KASE

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INTRODUCING KAZAKHSTANSTOCK EXCHANGE INC. (KASE)
Relevant as of October 1, 2007
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COEVAL OF TENGE
KASE was established at November 17, 1993 under
the name of Kazakh Interbank Currency Exchange,
two days after the launching of tenge new legal
tender of Kazakhstan. Now, that day (November 15)
is celebrated as the official annual holiday "The
Day of Financiers".
"Old" tenge (19932006)
"New" tenge (since 2006)
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YOUNG AND SINGLE
KASE commercial joint-stock company with the 74
shareholders National Bank of Kazakhstan (the
largest shareholder), banks, brokerage firms,
asset management companies, pension funds and
other professional financial institutions. Voting
method one share one voice.
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YOUNG AND SINGLE (2)
Today and finally KASE is the single universal
financial exchange in Kazakhstan with the brief
but bright history 1993 first trades with the
foreign currency (US dollars) 1995 first trades
with the T-bills 1996 first trades with the
derivatives (KZT/USD exchange rate futures) 1997
first trades with the listed equities 1997
first trades with the government stacks of
shares 1997 first trades with the non-listed
corporate securities 1998 launching of the OTC
securities market within KASE
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YOUNG AND SINGLE (3)
1998 first trades with the eurobonds of
Kazakhstan 1999 first trades with the listed
corporate bonds 1999 first trades with the
municipal bonds (since 2005 the issuance of
these bonds is prohibited) 1999 launching of
the direct repo market 2001 first trades with
the supranational (IFO) bonds 2001 launching of
the automatic repo market (the most massive and
active sector of the KASE market) 2002 first
trades with the promissory notes 2003 first
trades with foreign T-bills (Russia 2028 Russia
2030 )
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YOUNG AND SINGLE (4)
2006 first trades with foreign corporate bonds
(JP Morgan and Merrill Lynch) 2006 IPO of
KazMunayGas ExplorationProduction 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 KASE base (founded for drawing of
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
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IMPRESSIVE DYNAMICS
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IMPRESSIVE DYNAMICS (2)
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UNIVERSAL EXCHANGE
In total, repo (money) market takes 65.2 of
general KASE turnover
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UNIVERSAL EXCHANGE (2)

• KASE serves the markets of
• direct 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)
• supranational bonds and foreign T-bills
• promissory notes
• equities
• corporate bonds

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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 Kazakhstan 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)

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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 short-term money
borrowings and lendings. KASE foreign currencies
market the basic trading site for the National
Bank of Kazakhstan to regulate the exchange rate
of tenge. KZT/USD the KASE exchange rate today
official exchange rate tomorrow.
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LISTED COMPANIES (by categories)
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LISTED COMPANIES (in total)
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MARKET CAPITALIZATION (USD bln)
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LISTED COMPANIES (by structure)
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"PURE" CORPORATE SECURITIES MARKET
Total KASE turnover for 9 months of 2007 with the
equities 5,591.6 USD mil,with the corporate
bonds 3,302.7 USD mil.
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"PURE" CORPORATE SECURITIES MARKET (2)
In 2007 average daily KASE turnover with the
equities 29.7 USD mil,with the corporate bonds
17.0 USD mil.
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"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 ..

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CHAMPION GROWTH (in 20052007)
Index KASE_Shares demonstrated the rapid growth
11.1 times (for the period Jan.05, 2005 Apr.19,
2006) and 1.2 times (for the period Apr.19, 2006
Feb.12, 2007), due to the appearance of new
investors class mutual funds and individual
persons.
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INVESTOR BASE
Institutional investors assets at the end of 2006
reached 78.5 bln USD, 89.0 of them are banks
assets,9.1 pension assets Principal indicator
is growth of unit investment funds assets (at the
end of 2006 383 mln USD)
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INVESTOR BASE (2)
Consequences of excess investor base is the real
zero" yield of debt instruments for investors
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ADVANCED TECHNOLOGIES

• 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
• Central Depository is the KASE subsidiary
• DVP
• T0 settlement basis

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IN THE FUTURE

• Waiting for the 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 the IFOs to place their bonds in
  Kazakhstan
• Ready to introduce Tn settlement basis for the
  foreign operators (only for eqities)
• Launch of currency swap market
• Listing of unit funds units
• Holding active marketing arrangements
• Modifying of the trading system
• Launch of the new version of KASE web-site

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CONTACT US
Internet www.kase.kz e-mail kase_at_kase.kz phone
(7 727) 237 53 00, 272 98 98, 237 53 11, 272
06 00 fax [phone]
address 291/3, Dostyk av., Almaty, Kazakhstan