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REVIEW OF COMMODITY AND STOCK MARKET OF KYRGYZSTAN
Hystorical view of Kyrgyz stock exchange
The KSE was founded in 1994 by ten domestic private companies and banks and operated during first year as a Centre for trade of privatization coupons.
Official opening ceremony and the first stocks trading took place on 25 May 1995, while a privatization process was in height.
In 1997 KSE initiated and headed a Central Depository foundation as a main its partner and guarantee of pure security transactions.
At initial stage of its existence (up to the year 2000), the KSE had functioned as a non-profit organization.
The KSE was transformed into a closed joint-stock company in May 2000;
A reliable partner, Istanbul Stock Exchange, has been jointed to KSE, as a major shareholder during that year. The partnership with ISE allowed us to enter the international market.
Kazakhstan Stock Exchange in 2001 had become a shareholder allowing the KSE to increase significantly its technical software potential.
At present time the KSE is a closed-type non-profit joint-stock company with 17 shareholders. Among them 14 shareholders are domestic companies and 3 are foreigners.
Most significant contribution for the KSE sustainable gross was made by the US Agency for International Development (USAID). With the help of powerful USAID financial support the KSE has been really settled and it is continuing its development now.
Annual overview of the Kyrgyz Stock Market
Past year was especially effective for the Kyrgyz Stock Market. Thus this significant year 2 most important events took place, for the first time of development of securities’s market on the Kyrgyz Stock Exchange beginning of circulation of the 9-months Government Treasure Bills (GTB) on Kyrgyz Stock Exchange in frame of the GTB Pilot Project. This project was accounted for 6 months. On results of this period, the working group will take decision about the further fate of the GTB. In case of positive results of the GTB Pilot project, there is possibility to put all GTB to trade ground of the Stock Exchange. Second important event in our country we can consider the development of investment institutes, namely unit investment trust. The system of collective investment is in total decay, and trust to investment founds is at very low level. This situation is happened thanks to negative image of old privatization founds. However, professionals of Stock Market gave new life to this enterprise, and now the system of the collective investment will be the new possibility for Kyrgyz citizens to join to claimed type of investment over the world through the procurement on collective investment schemes.
During 2007, the Financial Supervision and Regulation of the Kyrgyz Stock Market Service registered more than 70 issues of ordinary registered securities for the amount exceeded 2 billion soms. In 2006, this State Service registered 61 issues of securities for total amount of 1.5 billion soms.
Foreign investments for the past year were more than 2 billion soms, including 1.5 billion soms received from the CIS countries and 500 million soms from abroad.
Securities’s market
For the past year there were transactions with corporate securities on the Kyrgyz Stock Exchange of 189 issuers for 5 187.3 million soms. The year before, the value of transactions was twice less, namely 3 916.3 million soms. The value of transactions for 2007 on the primary market reached 1 501.5 millions soms, that is 30% out of total value for year.
The leader of transactions for past year were the securities of the “Kant Cement Factory” OJSC (value of transactions - 1 246,7 million soms). For the reporting period, 46 deals were concluded with securities of this issuer. Maximum price for one share was 171.63 soms, minimum price per share was 60.53 soms. Average price of value of sale for 2007 was 159.13 soms. Last transaction was at the price of 160.82 soms per share. Out of main corporate events within the cement factory we can mark following: the “Kant Slate Produce” LTD Co with the Statute capital in amount of 324 million soms became as independent unity and was separated from of the Cement Factory.
Market of Government Treasure Bills (GTB)
In accordance with KSE commencing 16th November till 28th December, there were organized 7 auctions on placement of 9-months GTB, in frame of GTB Pilot project on the Stock Market, duration is 6 months. Totally, for this period 33 thousands pc of GTB for 1.3 million soms were allocated, average profitability was 8.11% annually. For this period 4 brokerage companies, 3 commercial banks as well as 2 insurance companies took active part.
The value of transactions for 2007 was accounted to 167 million soms on the “Stock Trade System” CJSC. In compare with 2006 year, this indicator increased more than 1.5 times. The value of transactions on the primary market was accounted to 2.5 million soms that is 2% out of total value.
During 2007, according to the Program of Privatization of State Property in KR for 2006-2007 the Government packets of securities were sold on the “STS” CJSC for 58.5 million soms.
The securities of the “Batkenoilgaz” OJSC ranked first place in rating of largest value of transactions on the “STS” OJSC (value of transaction 38.5 million soms). We remind that according to the privatization program of government property 100% of state packet was sold during the investment contest. 3 companies took part in contest. Preference was given to china company - “International oilresearching company Czhuchen”. Company plans to invest into the Batkenoilgaz additionally 2 billion 297 million soms to fulfill the obligations to increase the producing capacity. (development of real achieved events to increase the value of oil and gas extraction), to improvement the financial-economical conditions, offset of bill payable of company, and exit to new marketing outlets. The enterprise was established in November 2001, taking into account of prospects of development and increasing of extraction of natural gas in Batken province based on accepted under the jurisdiction of Kyrgyz Republic by Uzbekistan Republic the assets (wells). Extraction and sale of oil and gas, including: geological research oil and gas fields, complex development oil and gas fields, sale of liquefied gas, transport of gas, and gas supply are main activities of the Batkenoilgas. The enterprise has license to develop 4 gas and oil fields, located in Batken province. According to the financial-economical activity “Batkenoilgas’ OJSC for 2006, net income was 46 100 soms.
Kyrgyz Stock Exchange http://www.kse.kg/eng
Closed Joint-Stock company "Central Depository" Kyrgyz Republic
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