Kazakhstan News

Kazakhstan Stock Exchange

stock exchange

The Kazakhstan stock exchange trades in financial instruments like government securities, future contracts, currencies, corporate securities, and other financial instruments (foreign currencies, equity, corporate debt securities, derivatives, and repo transaction market). The Stock Exchange also participates in collecting and processing data relevant to the financial market, and it makes its market researches and analyses to obtain information. Other services are also part of the Stock Exchange, like for example in information technologies. It is seated in Almaty, the former capital of the country, and runs its operations from there.

History and Establishment

Kazakhstan was long under the wing of the Soviet Union and is actually the last country to have declared independence from all former SSR countries. After independence, the government wanted to define its own economy and way of life, but in the first two years, it seemed rather reserved before taking actual steps. But still, Kazakhstan finally let go of the familiar Soviet system by introducing a national currency which also led to the formation of the Stock Exchange.

The Kazakhstan Stock Exchange was established in 1993, two years after Kazakhstan declared independence from the Soviet Union. They also introduced their own national currency, the tenge (KZT) in 1993. From its independence in 1991 until 1993, Kazakhstan, as well as the other 14 former Soviet republics, used the Soviet ruble as their currency, and despite independence, the banking sector seemed to have not been changed. But later, Kazakhstan acted quickly and passed the tenge into circulation. Kazakhstan took all formal steps to do so, and in 1993 1 tenge equaled 500 ruble. Today, 1 USD equals 317.207 KZT.

It took only one day, after the new currency introduction to form the Kazakhstan Stock Exchange. A total of 23 banks decided to form the Stock Exchange the following day, and that is how Kazakhstan got its own stock market. The stock exchange was tasked with developing the national currency. The exchange actually underwent many changes Fin its first years of operation being rename and re-renamed from Kazakhstan Inter-Bank Currency Exchange over Kazakhstan Inter-Bank Currency and Stock Exchange and finally to Kazakhstan Stock Exchange in 1996. Only in that year, did the exchange secure a full-scale license to operate the financial market, which was a huge step, given that the exchange was only entitled to operate government securities, but at that point, it was still banned from trading commodities. Shareholders decided to form a sort of branch called Almaty Financial Instruments Exchange (AFINEX) in 1997 which overtook foreign currency trading and futures contracts.

KASE Operations

KASE gets its green light from the National Bank of Kazakhstan who issues the licenses for numerous operations. The KASE is authorized to make banking transactions in domestic and foreign currencies, and as we said it operates in the securities market. KASE has its group of shareholders which consists of 46 entities like banks, a pension fund, brokers, management companies, etc.

From its formation, the incorporation of KASE included the so-called golden share, which belongs to the National Bank of Kazakhstan and gives the Bank the right to veto decisions of other shareholders regarding currency and government bond regulation. KASE is run by a Management Board consists of five members.

International and National Engagement

KASE tries to promote its markets at the international scene as well. It joined many regional and global institutions as a member or affiliate and is part of the Federation of Euro-Asian Stock Exchanges (FEAS), World Federation of Exchanges (WFE), Association of Financiers of Kazakhstan (AFK), etc.

The Forex Market

The currency market is one of the most active markets in the world, and Kazakhstan follows the trend as well. Currency trading makes up for half of the trading volume on the Kazakhstan Stock Exchange. Trades on KASE can be done in USD, Chinese yuan, euro, the tenge, and Russian ruble. The USD/KZT currency pair is the leading on the exchange, accounting for 95% of turnover in the Forex market.

There are three regular trading sessions in foreign currencies held by KASE on a daily basis. If you want to trade on the KASE exchange the best is to join the morning, afternoon, or evening session. The Kazakhstani currency market contributes to a better economy, spurs its growth and development, and encourages overall investments.