Head of KASE comments on risks associated with partnering with MOEX
According to Alina Aldambergen, chair of the Kazakhstan Stock Exchange (KASE), the fact that one of its shareholders – the Moscow Exchange (MOEX) – has been hit by U.S. sanctions poses sanction risks for KASE as well.
«Given that one of our shareholders is a sanctioned entity, we’re at risk of being cut off from necessary services and transactions, which is unacceptable as we are the central element of Kazakhstan’s foreign exchange market. In this regard, a decision was made to stop MOEX from having a share in the capital of KASE,» Aldambergen noted.
She highlighted that MOEX’s control of a share in KASE affects the exchange relations with foreign financial organizations and partners. Meanwhile, the exchange organizes trade with foreign currencies such as USD-tenge, USD-yuan and USD-euro. As a result, the platform undergoes rigorous compliance control when doing business with various counterparties and foreign banks.
«We’re negotiating with MOEX about buying out their shares. They might be acquired by KASE itself or third parties after approval from the exchange, because the share MOEX currently controls is quite significant (13.1%). Anyway, KASE will take all necessary measures to ensure the stable functioning of Kazakhstan’s capital market,» Aldambergen highlighted.
Aldambergen refused to reveal any details of the negotiations, citing their confidential nature. She also avoided answering questions about whether KASE paid dividends to MOEX and, if so, whether these payments pose any sanction risk.
On June 12, the U.S. Office of Foreign Assets Control (OFAC) under the Department of the Treasury imposed sanctions against the Moscow Exchange (which operates under the brand MOEX), which controls a 13.1% stake in KASE. MOEX is the second-largest shareholder of the Kazakhstani stock exchange after the country’s National Bank (46.9%).
Interestingly, earlier this month, KASE stated that MOEX’s shareholding does not make a significant difference because it is much less than 50%, an important threshold in U.S. legislation.
