Post on 16-Jan-2016
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CORPORATE BONDS MARKET OF KAZAKHSTAN
Building Domestic Debt Markets ConferenceBudapest, May 12-14, 2003
Azamat Joldasbekov
President / Kazakhstan Stock Exchange (KASE)
The Most Successful Sampleof Corporate Bonds Market in CIS
Kazakhstan 2.58%
Russia 0.74%
Ukraine 0.38%
Kyrgyzstan 0.15%
Other 0.00%
Volume of corporate bonds markets in 2001, % of GDP
Source: S.Lialin (Cbonds Co. / S-Petersburg, Russia)
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)
The National InvestorsThe 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 (35,94%
of GDP)
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
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
Yield of Kazakhstan Corporate Bonds (% p.a.)
Face Value of the Listed Bonds (USD mln)
Trade Turnover of the Listed Bonds (USD mln)
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
Ratings of Kazakhstan BorrowersS&P Moody's Fitch
Kazakhstan, the Republic of BB Baa3 BB+
Kazakhstan Railroads BB Ba1 BB+
Kazakhoil B1 BB-
Kaztransoil BB BB
Development Bank of Kazakhstan BB Baa3 BB
Kazkommertsbank BB- Ba1 BB
TuranAlemBank BB- Ba1 B+
Halyk Savings Bank of Kazakhstan BB- BB
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)
Need to Know More?
www.kase.kz