Sanction status sucks: KASE makes principal decision to cut ties with MOEX

According to Timur Suleimenov, Chair of the National Bank of Kazakhstan, the Moscow Exchange (MOEX) has made the principal decision to exit the Kazakhstan Stock Exchange (KASE), where it holds a 13.1% stake. The National Bank currently controls 46.9% of KASE shares.

«The decision for MOEX to drop its stake in KASE has been made and is supported by our Russian colleagues. I am convinced this is the right and professional decision. As a true partner, MOEX acknowledged that its status as a sanctioned entity isn’t beneficial for KASE,» Suleimenov stated.

He did not provide further details, adding that KASE will issue an official statement on Oct. 11. Suleimenov also noted that KASE and MOEX have a strategic cooperation agreement, share mutual technologies and exchange expertise.

In June, the U.S. Department of the Treasury added MOEX to its Specially Designated Nationals (SDN) list, which froze its accounts in American banks and depositories and prohibited U.S. citizens and residents from collaborating with it. At the time, KASE stated that it would consider how to maintain its business relationship with MOEX while adhering to the sanctions.

Although U.S. sanctions against Russian companies did not automatically result in secondary sanctions against KASE — since MOEX holds less than 50% of KASE’s capital — the National Bank did not rule out the possibility of purchasing MOEX’s shares. In fact, the regulator expressed interest in acquiring the shares directly. Suleimenov mentioned that KASE would continue to use MOEX’s systems until 2028, as these services had already been paid for.

Two weeks after the sanctions were imposed on MOEX, KASE asked MOEX to sell its stake. In November 2023, Alina Aldambergen, head of KASE, stated that the exchange had rigorously assessed all sanction-related risks and was prepared to end bilateral cooperation if necessary, based on recommendations.

As of Oct. 1, 2024, KASE was primarily controlled by Kazakhstani investors (86.9%), with the National Bank holding 46.9%. MOEX owns 13.1% of KASE shares, making it the second-largest stakeholder after the National Bank.