Nine in ten Kazakhstani investors prefer to invest in foreign assets

Approximately one in 10 clients of Freedom Finance in Kazakhstan invests in Kazakhstani stocks and bonds, while the remaining investors prefer to put their money into foreign stocks, according to Sergey Lukyanov, chair of the board of directors at Freedom Finance Global and CEO of Freedom Finance, JSC.

«When we analyzed how many people invest in Kazakhstani securities, we found that less than 10% of our clients do so. This figure is quite stable. Even though the share of stocks and bonds can change, the number of those who prefer to invest in Kazakhstani stocks remains at about 10%. There was a small spike in interest (+1%) after the successful IPO of KazMunayGas when many investors reported profits. However, after the situation with Air Astana, whose initial public offering was not as successful, this number has returned to around 9%,» Lukyanov said during the First Kazakhstan Economic Freedom High-Level Conference in Astana.

He also highlighted that Freedom Finance is widely recognized as an effective provider of access to international financial instruments for Kazakhstani investors. This is why local investors tend to take advantage of the opportunity to invest in well-known and attractive foreign assets.

«In which assets should citizens invest? There are unique circumstances in every country. If there aren’t many public companies, what choices do people have? They will likely choose what they are more familiar with, like Apple and Tesla, whose products they use or see every day,» Lukyanov said, referring to the kinds of foreign assets Kazakhstanis are interested in.

The CEO of Freedom Finance also noted that the brokerage business is still growing rapidly.

«This business has grown. Over the past five years, the client base has grown by 30% to 50% annually. These are big, significant figures. Client assets have grown at roughly the same rate. Even though that growth was slightly more modest, it was still above 20%. What does this depend on? First and foremost, it depends on the stock market situation. People tend to be more active in the market when it’s either rising or declining,» Lukyanov emphasized.

He also revealed that the prime target is large clients, as retail investors tend to follow them. According to Lukyanov, the share of men among investors has increased over the past several years compared to women.

«Regarding gender, the percentage of men and women is usually about 50/50, with a slight dominance of men (51/49) among investors. However, in Kazakhstan, the ratio is different, with men making up 60% and women 40%. Moreover, the share of men has been growing over the past three years. When I joined the company five years ago, the client base was more traditional, at 55/45. The current 60/40 ratio is quite unusual. I believe this is the limit,» he said.

As of June 30, 2024, the company had 6,819 employees, 132 offices (for brokerage, insurance, banking and other financial and non-financial services) and 534,000 retail brokerage accounts.

In the 2024 fiscal year, Freedom Holding Corp. reported $1.6 billion in revenue, an increase of $839.4 million (+105%) from the previous fiscal year. This growth was primarily driven by increased interest income, insurance underwriting income and commission fees. Regarding net profit, Freedom Holding Corp. reported $375 million in net income for the 2024 fiscal year.