CORPORATE BONDS MARKET OF KAZAKHSTAN

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CORPORATE BONDS MARKET OF KAZAKHSTAN
Azamat Joldasbekov President / Kazakhstan Stock
Exchange (KASE)

• Building Domestic Debt Markets Conference
• Budapest, May 12-14, 2003

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The Most Successful Sampleof Corporate Bonds
Market in CIS
Volume of corporate bonds markets in 2001, of
GDP
Source S.Lialin (Cbonds Co. / S-Petersburg,
Russia)
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Why? Just Follow the Rules

• The Market Is Where the Investors Are

• Stimulate the Market With the Tax Regime and
  Portfolio Investments Regulation (0 taxes for
  the main types of investors and the flexible
  limits of investments in corporate securities for
  institutional investors)

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The National Investors
The corporate bonds market of Kazakhstan is
driven by the assets of the private accumulative
pension funds (PAPF) and the commercial banks
As for 01.01.03 the assets of the commercial
banks are equal to 7,39 USD bln, of the private
accumulative pension funds 1,25 USD bln,in
total 8,64 USD bln (35,94of GDP)
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National Investors Some Facts

• Pension reform in Kazakhstan was launched in
  1998. The same year the first private
  accumulative pension funds have appeared
• There is State Accumulative Pension Fund (27,6
  of total pension assets) but now it is not
  authorized to invest in corporate securities
• The impact of the individual investors and
  insurance companies is invisible

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Foreign Portfolio Investors
There are NO foreign portfolio investors in the
bonds market of Kazakhstan the yield is too low
due to the excess of the domestic investors
appetite over the domestic bonds supply
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Yield of Kazakhstan Corporate Bonds ( p.a.)
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Face Value of the Listed Bonds (USD mln)
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Trade Turnover of the Listed Bonds (USD mln)
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The Trade Volume is LowerThan the Total Face
Value
The reason is the same the hungry national
investors prefer to keep the bonds till maturity
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Ratings of Kazakhstan Borrowers
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What Do We Expect?

• The evolution growth of the national corporate
  bonds market (up to 10 of GDP and more)
• The growing interest of foreign portfolio
  managers to Kazakhstan corporate eurobonds
• The appearance of foreign bonds in Kazakhstan
  market (cheaper cost of borrowings)

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Need to Know More?
www.kase.kz