INTRODUCING KAZAKHSTAN STOCK EXCHANGE INC. (KASE)

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INTRODUCING KAZAKHSTANSTOCK EXCHANGE INC. (KASE)
Hong Kong2006, December
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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 non-commercial joint-stock company with
the 59 shareholders National Bank of Kazakhstan
(the largest shareholder), banks, brokerage
firms, asset management companies, pension funds
and other professional financial institutions.
All of them have only one vote each. Today,
there are plans to commercialize ("de-mutualize")
KASE and to capitalize it with the funds of the
existing shareholders and the Government in
order to administrate the Special trading site
of the Almaty Regional Financial Center.
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YOUNG AND SINGLE (2)
Today 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
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YOUNG AND SINGLE (4)
2003 first trades with foreign T-bills (Russia
2028 Russia 2030 ) 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
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IMPRESSIVE DYNAMICS
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IMPRESSIVE DYNAMICS (2)
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UNIVERSAL EXCHANGE (2006, 11 months)
In total, repo (money) market takes 69.6 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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"PURE" CORPORATE SECURITIES MARKET
Total KASE turnover for the 11 months of 2006
with the equities 1 775.9 USD mil,with the
corporate bonds 2 773.2 USD mil
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"PURE" CORPORATE SECURITIES MARKET (2)
In Jan.Nov., 2006 ???? average daily KASE
turnover with the equities 6,8 USD mil,with
the corporate bonds 11,6 ??? USD.
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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 few months of 20052006)
Index KASE_Shares demonstrated the rapid growth
11.1 times (for the period Jan.05, 2005 Apr.19,
2006) and 4.1 times (for the period Nov.30, 2005
Nov.30, 2006), due to the appearance of new
investors class mutual funds and individual
persons.
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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)
• Preparing to administrate 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)

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CONTACT US
Internet www.kase.kz e-mail kase_at_kase.kz phone
(7 327) 272 98 98, 272 06 00 fax (7 327)
272 09 25 address 67, Aiteke bi street, Almaty,
050000, Kazakhstan