On November 15, the Kazakhstan Stock Exchange (KASE) is going to start its new KASE Global sector. It’s going to be a place where local retail investors can get access to shares of huge foreign companies, including those from the S&P 500 and NASDAQ Global 100 indices.
New stall on the market
KASE Global is a new platform for trading with shares of foreign companies.
«In fact, this sector is going to be a new stall that offers same-type securities, conditions, trading rules and settlements. We believe that it would be good for investors,» Nataliya Khoroshevskaya, a deputy head of KASE told the Kursiv edition.
At the first stage, KASE Global will include only those foreign shares that are listed in the U.S. or are added to the KASE lists.
«The only financial tool that will be available in the sector soon is companies’ shares. Our attention is mostly focused on American companies’ shares because they are the most popular among retail investors,» Idel Sabitov, adviser of the KASE head told the Qazaq Association of Minor Shareholders, a non-profit organization. «It is expected that all other shares of big companies, retail investors are interested in, might be added later. These shares must be kept in storage by the Central Depository when the listing is underway though,» he added.
Trading sessions in the KASE Global sector are occurring from 11:20 a.m. to 10:00 p.m. with a settlement date of T+2. The U.S. dollar is going to be the main currency for all of these trading sessions. KASE plans to extend trading sessions’ time and to widen the number of tools traded in the sector.
Khoroshevskay doesn’t rule out that in addition to shares, KASE Global may embrace other types of financial tools.
«We are going to offer shares which are part of the global indices, which show the ‘temperature’ of the international stock market as well as the entire industry in this segment. First of all, we are talking about securities from S&P 500 and NASDAQ Global 100,» she said.
It’s good but not enough
The rapid growth of retail investors is the global trend and Kazakhstan is no way an exclusion. According to the Central Depository of Kazakhstan, the amount of broker accounts by individuals has risen this year by 55% to 206,000. Over the last ten months, the number of retail investors who came to the market is two times higher than over the last two years.
There is no surprise that the huge amount of newcomers to the stock market has changed the market. In October 2021, the share of individuals in gross turnover of shares on KASE (in money terms) reached 63%. Previously, this rate was about 50%.
However, this demand hasn’t met a supply so far as KASE cannot offer many choices of financial tools. There are only eight companies in the blue chips index while Kazatomprom, a national nuclear company accounts for the vast majority of this liquidity.
According to Khoroshevskaya, the key goals of KASE Global is to support the interest of retail investors in the stock market and to diversify choice of financial tools and liquidity on the market.
«We are going to attract new investors, to offer them a wide range of tools for trading. This is our final goal because the more active investors we have, the more effective source of finance the stock market might be for various Kazakhstani companies and the entire country’s economy,» said the deputy head of KASE.
KASE has offered shares of big American companies since 2019. There are shares of 13 U.S. companies in total, including Apple, Coca-Cola and Facebook.
Serik Kozybayev from the investment department of the Astana Invest company believes that the new sector on KASE will have a positive impact on the entire market.
Given that there is a constant shortage of securities and liquidity on the Kazakhstani market, any new instrument is good, he said. This novelty can also be beneficial for brokers as an additional source of revenue even though it is unlikely to be huge.
Currently, Astana Invest serves its clients via foreign brokers.
«Soon we will be able to serve clients and buy shares of American companies here on KASE. But of course, we are not sure what amount of liquidity we should wait for; is it going to be big or small. That is still a question,» Kozybayev noted.