Head of ARDFM identifies which country can be a role model for Kazakhstan in terms of combining stock exchanges

According to Madina Abylkassymova, head of the Agency for Regulation and Development of the Financial Market (ARDFM), the example of Qatar is one of the possible scenarios for the future merger of two exchanges operating in Kazakhstan: the Kazakhstan Stock Exchange (KASE) and the Astana International Exchange (AIX).

«Concerning AIX, we can rely on the experience of the Qatar Financial Center as they established their exchange on the basis of the Qatar Stock Exchange. We are going to study this case and decide what mechanism is the most effective in terms of attractiveness for foreign investors and local market participants. “I think we’ll find an optimal solution,» Abylkassymova said.

As the official noted, KASE serves as a local platform, while AIX was designed to attract international investors. She also said that even though there were no discussions with KASE shareholders about the merger, she doesn’t see any obstacles to the move.

The Qatar Financial Center (QFC) was established in 2005 and brings together the country’s 50 leading public and private companies. The organization claims that its goal is to provide its members with «a work environment based on achieving excellence.» The center also seeks the development of four sectors of the country’s economy, which Qatar authorities consider top priorities: media, sports, digitalization and finance. Due to these industries, Qatar expects to reduce its dependence on hydrocarbon exports.

Abylkasymova agrees that two exchanges are too much for Kazakhstan’s stock market, which is quite small. Earlier this month, this idea was publicly articulated by President Kassym-Jomart Tokayev.

In turn, Elena Bakhmutova, head of the Association of Financiers of Kazakhstan (AFK) believes that the merger should take place on the basis of KASE, the platform where the main liquidity is concentrated.

«Of course, there are some positive aspects related to the regulation of the Astana International Financial Center and AIX, as a separate platform. “I think we have to exploit these opportunities, although the merger itself should be made on the basis of KASE because all the activity is still here in Almaty,» she said.

During his address to the nation on September 1, President Tokayev said that it is necessary to merge the two exchanges to avoid duplication and competition in a small market.

«This is too much for our financial system. In order to increase the capacity and attractiveness of the domestic market, I instruct the cabinet to prepare the combining of the potential of these exchanges under a single management,» Tokayev said.