KASE wants to buy back its shares from the Moscow Exchange

Against the backdrop of sanctions, the U.S. imposed on the Moscow Exchange (MOEX), the Kazakhstan Stock Exchange (KASE) has asked the Russian exchange, which still controls a 13.1% stake in KASE, to sell it back, according to Frank Media, a Russian media outlet, citing sources close to the Russian exchange.

«In the past, MOEX pursued a strategic goal of keeping KASE under Russian influence and provided it with capital and technologies. In the current situation, however, MOEX may give its consent to the deal with KASE, which can receive necessary technologies from American Nasdaq, while Koreans were interested in acquiring a share in KASE,» a person familiar with the matter told the Russian media outlet.

The press service of KASE neither confirmed nor denied this information, only saying that the situation is under review. KASE promised to share any possible details as long as new information is available. 

MOEX has been the second biggest shareholder (13.1%) of KASE after the National Bank of Kazakhstan (46.9%) since 2020. In the first stage, the Russians acquired 3.3% of the exchange and then their share increased to the current level due to their investments in the form of technologies.

In mid-June 2024, the U.S. imposed blocking sanctions against MOEX. Several infrastructural companies of the Russian exchange such as the National Settlement Depository and the National Clearing Center were sanctioned as well. This means that all MOEX accounts in American banks and depositories have been blocked, while US citizens and residents have been banned from any sort of cooperation with the exchange. MOEX has already stopped trade with USD and euros in its foreign exchange section.

Commenting on the news, the National Bank of Kazakhstan said that it is keeping an eye on the situation associated with the sanctions against infrastructural financial organizations in Russia. The Agency for Regulation and Development of the Financial Market said the same, adding that it is all set to «take necessary measures to minimize the negative impact of external factors that could undermine the stability of the financial sector.»

In turn, KASE announced that it would continue to support business interaction with MOEX while still respecting the sanctions. It also said that its subsidiary organizations work as usual as trades, clearing and settlements are implemented in a standard manner.

However, a week after U.S. sanctions hit MOEX, KASE decided to call the general meeting of shareholders ahead of schedule to discuss a new methodology for pricing of KASE share buyback.

In November 2023, Alina Aldambergen, head of KASE said that the trading platform was carefully analyzing all the sanction risks. She also pointed out that IT services were the only touch points between KASE and MOEX, which was a major provider of such services.

«We cut all ties with anyone on the sanction list. We are reviewing international requirements, consulting with experts and our reaction is going to be based on these recommendations,» Aldambergen said.

As of June 1, 2024, Kazakhstani investors controlled 86.9% of KASE, including 46.9% owned by the National Bank.