ALMATY AS REGIONAL FINANCIAL CENTER

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ALMATY AS REGIONAL FINANCIAL CENTER
Kazakhstan Financial and Corporate Growth Forum

• 28 march 2007

Almaty City
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GDP GROWTH IN KAZAKHSTAN

Source National Bank of Kazakhstan
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MACROECONOMIC DATA OF COUNTRIES IN THE REGION
Source Statistical Committee of CIS
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EUROPEAN UNION AND KAZAKHSTAN

• From 1993 to 2006 cumulative investments of EU
  members into Kazakhstan economy have reached 30
  billion
• In 2006 international trade between EU and
  Kazakhstan has reached 23 billion
• Currently, the share of international trade with
  EU is about 40 of Kazakhstans international
  trade turnover. Also, EU accounts for 36.7 of
  cumulative capital inflow to Kazakhstan (17.6
  billion)

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UNITED KINGDOM AND KAZAKHSTAN

• In 2006 volume of trade between Kazakhstan and
  UK made up 590,9 million.
• In overall 128 entities with British investors
  participation were incorporated in Kazakhstan.
• The major purpose of bilateral economic
  interaction are as follows power supply,
  research and development of commodities,
  buildings construction, social infrastructure,
  healthcare, transport and communication and
  consulting services.
• Great Britains share in the overall ivestment
  flow to Kazakhstan is comprised of 15

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BANK ASSETS TO GDP,
in percent
Source Agency of the RK on Statistics,
Goskomstat of Russia, Statistical
Agency of the UK
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KAZAKHSTANS SOVEREIGN RATING
High indicators of country's sovereign rating
represent trust of a woldwide financial
environment
Source National Bank of Kazakhstan
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INVESTMENT CLIMATE

• Factors promoting the emergence of a sound
  investment climate
• political stability
• consecutive political reforms
• inflow of direct foreign investments
• broad commodities base
• dynamically developing services sector.

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KAZAKHSTANS INVESTORS
As of January 1, 2007

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KAZAKHSTANS INSTITUTIONAL INVESTORS
Share of GDP (as of January 1? 2007)
Source National Bank of Kazakstan, Agency of the
RK on Regulation and Supervision of the Financial
Market and Financial Organizations
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KAZAKHSTANS FUNDS MARKET INFRASTRUCTURE

• Exchange
• Central depository
• 69 brokers- dealers
• 16 registras
• 9 custody banks
• 13 pension assets investment management companies
  
• 37 investment management companies
• 2 transfer-agents

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KAZAKHSTANS FUND MARKET
Kazakhstans fund market is noticable for the
high pace of growth. In the beginning of 2007
overall volume of transactions in all sectors of
market has reached 169 344, 6 million dollars
(220,4 to GDP)
Source JSC Kazakhstan stock exchange
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KAZAKHSTANS FUND MARKET - KEY CHARACTERISTICS

• Fastly emerging funds market
• Developed market infrastructure
• Large institutional investors whose assets rise
  goes on
• Fastly emerging bonds market
• Fastly emerging over the counter market of
  foreign currency derivatives
• Lack of participants and financial instruments

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IPOS OF KAZAKHSTANS COMPANIES

• Kazakhstans companies were the first among
  companies from CIS to make IPOs on international
  capital markets
• London Stock Exchange was chosen as the main
  place for Kazakhstans IPOs
• RFCA plans to become an important place for
  Kazakhstans and international IPOs

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RFCAS ROLE IN DEVELOPING KAZAKHSTANS
SECURITIES MARKET

• On July 7, 2006 the Law of the Republic of
  Kazakhstan On the Regional Financial Center of
  Kazakhstan was signed
• Regional Financial Center of Almaty is a
  special legal regime, regulating interactions of
  the Financial Centers participants and other
  interested parties, aimed at the development of
  Kazakhstans financial sector
• Goals of establishing of RFCA
• Development of Kazakhstans securities market
• Its integrations with international capital
  markets
• Attraction of foreign investments into
  Kazakhstan
• Access of Kazakhstans capital to international
  capital market.

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SPECIAL TRADING FLOOR OF THE FINANCIAL CENTER

• All securities deals at RFCA can be exercised
  only at the Special Trading Floor
• Existing model of RFCA allows only two trading
  sectors
• Nonlisted Securities
• Listed Securities

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FINANCIAL INSTRUMENTS TRADED AT THE SPECIAL
TRADING FLOOR
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LISTING REQUIREMENTS ON THE SPECIAL TRADING FLOOR

• Nongovernment securities can be listed on the
  Special Trading Floor if they satisfy one of the
  following three conditions
• have listing in one of the stock exchanges
  recognized by the Agency
•  have an established minimum credit rating score,
  from one of the rating agencies recognized by the
  Agency
•  the issuer and its securities satisfy the
  established on the Special Trading Floor
  requirements

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TAX INCENTIVES FOR RFCA PARTICIPANTS

• Exempt from corporate income tax are
• Execution of securities deals on behalf of and
  for clients (broker services)
• Nominal holding services
• Underwriter services
• Informational, analytical and consulting
  services
• Announcement and maintenance of securities
  prices.
• Exempt from corporate and individual income tax
  are
• Stock dividends and bond interest, on securities
  purchased on the Special Trading Floor
• Realized capital gains on securities listed on
  the special Trading Floor, provided such deals
  were made on the Special Trading Floor.

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INSTITUTIONAL DEVELOPMENT OF THE FINANCIAL CENTER
Development of the institutional infrastructure
of the Financial Center will involve
Clearing House establishing
Rating Agency Establishing
Insurance Fund for guaranteeing payments on
completed deals with securities
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PLANNED ACTIVITIES. MARKETING STRATEGY
Stages of attracting participants

• Stage 1 2007 attracting issuers and
  participants in Kazakhstan, then in Russia and
  Ukraine
• Stage 2 2008-2009 marketing activities
  in CIS countries and the neighbouring with
  Kazakhstan regions of China
• Stage 3 - since 2009 marketing
  activities in other Asian and Persian Gulf
  countries.

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CONTACTS

• Arken Arystanov, Chairman
• tel. [phone]
• e-mail Arystanov_at_rfca.kz
• Aigazy Kusainov, Department of Development
• tel. [phone]
• e-mail Kussainov_at_rfca.kz
• Enlik Doskempirova, Department of Development
• tel. [phone]
• e-mail Doskempirova_at_rfca.kz

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THANK YOU FROM YOUR ATTENTION!