A subsidiary of the international financial group Freedom Holding Corp. in Kazakhstan – Freedom Finance Global PLC has prepared an Overview of the securities markets of Central Asian countries over the past few years.
The authors of the publication note that there are 7 stock exchanges in the region, 2 of which are in Kazakhstan and Kyrgyzstan.
The Review provided to “Asia-Plus” by Freedom Finance Global PLC says that the stock exchanges of Tajikistan and Turkmenistan are not functioning as actively as in other countries of the region.
"They were created 8-9 years ago, the number of issuers does not exceed 5 units, and one of them has not had transactions for several years," the company's analysts emphasize.
They divide the stock markets of the countries of the region into three categories.
The first category with the highest indicators and a variety of sectors will include the stock exchange of Kazakhstan – KASE.
The second category includes another Kazakhstan stock exchange AIX, as well as the stock exchanges of Uzbekistan and Kyrgyzstan, which, according to the authors of the Review, are at the stage of active growth, and have greater potential for this.
The third "inactive category" includes the exchanges of Tajikistan and Turkmenistan, where "there are extremely few issuers and transactions."
Below, we present an unchanged assessment of the stock market of Tajikistan and, briefly, other countries in the region.
Tajikistan
The stock market of Tajikistan, in fact, is represented by only two issuers, for which no active trading is carried out.
The Central Asian Stock Exchange (CASE) was founded in April 2015. One of the main shareholders is the British GMEX Group. According to the information on the exchange's website, only “Eskhata” Bank is represented in the list of listed companies, and there is not a single paper on the stock market.
There is one E-Leasing issue on the corporate bond market, for which, apparently, there were no transactions on the secondary market, and the maturity period ended a couple of years ago. There are only two organizations among professional market participants, one of them is the Central Securities Depository, and the second is a brokerage company.
Nevertheless, according to the latest news, the development of the government securities market is planned in Tajikistan.
On January 17, 2024, the opening ceremony of Government Securities (GS) trading on CASE took place. Potential buyers, including from abroad, can carry out transactions through local brokers or commercial banks. At the time of preparing the review, there is no activity on the exchange's website in the GS sector, there are no actual transactions and trading statistics.
Kazakhstan
Kazakhstan is the only country in the region that has two truly independent stock exchanges managed by different shareholders: KASE and AIX.
If the first one was created in the former capital at the dawn of independence, then the second one was created in 2017 in the current capital.
As of the end of June 2024, KASE was represented by 252 non-governmental issuers and 698 issues of securities. There are 52 professional market participants on the exchange, as well as 704 thousand personal accounts of individuals as of April 1, 2024.
The growth in the first quarter amounted to 11 thousand new accounts. The trading volume in the first half of 2024 continued to grow, increasing by 19%, from 157.8 to 187.2 trillion tenge ($349 and $417 billion).
Nevertheless, it should be understood that most of the trading volume falls on the money market, where it reached 164.8 trillion tenge in the first half of 2024.
The money market is mainly represented by REPO operations, which provided 67% of the total trading volume on KASE.
REPO is a transaction involving the sale of securities with an obligation to repurchase them.
The money market also became the main catalyst for KASE's growth, increasing in volume by 19% compared to the previous year. At the same time, trading volumes increased in the foreign exchange market (+28% YoY, 15.7 trillion tenge), the corporate debt market (+52% YoY, 4.7 trillion tenge) and microfinance organizations (+17% YoY, 189 billion tenge).
Trading volumes in the KASE Global sector also increased by 36%, reaching a volume of 12.4 billion tenge. On the other hand, the GS market fell by 6% in volume, and derivatives fell significantly: from 23.5 billion to 31.4 thousand tenge. Nevertheless, the capitalization of the stock market has increased by +20.8% since the beginning of the year and amounted to 32.3 trillion tenge ($68.3 billion).
Kyrgyzstan
The Kyrgyz Stock Exchange (KSE) was founded in 1994, and the first trading began in 1995. The exchange has 36 issuers and 41 issues of securities, including stocks and bonds. In 2023, these issuers reached a trading volume of 29.1 billion soms ($331 million at the average exchange rate). This turned out to be 56% more than in the previous year.
In total, 2,024 transactions were made, which is only 14 more transactions than in 2022, and this indicates a sharp increase in the average cost of one transaction. The most active sector of the stock exchange is stocks, which accounted for 92.5% of the total trading volume last year. The market capitalization of the listed companies reached 93.5 billion soms ($1.05 billion) by the end of 2023. Compared to the end of 2022, the increase was 16%.
ИЗОБРАЖЕНИЕ
There is also a second platform in Kyrgyzstan, the Stock Exchange of Kyrgyzstan – ETS (SEK-ETS), which was merged with the KSE in 2011 and for 11 years carried out only depository activities. Since July 2022, trading has been resumed on SEK-ETS. The situation here is somewhat different from the one that has developed in Kazakhstan, since the exchanges were united a long time ago and in fact coexist together.
Uzbekistan
The Republican Stock Exchange "Toshkent" was founded in April 1994. As of June 30, 2024, the exchange has 103 issuers and 157 instruments in the form of securities. Most of the issuers (99) have issued shares, and only 6 have bond issues on the stock exchange. Also, the so-called non-listed trading platform (NLTP) operates at the RSE "Toshkent", where transactions of securities of 117 issuers take place. All of them are represented by shares.
The trading volume on the main site in the first half of 2024 amounted to 444.97 billion sums ($35.6 million) due to 246 thousand transactions. At the same time, the number of transactions increased by 82% compared to the first half of 2023.
Nevertheless, there is a significant decline in trading volume by 79% year-on-year. In the first half of 2024, no IPOs were held on the exchange, whereas for the whole of 2023 there were 3 of them in the amount of 104 billion sums ($8.9 million) from 12.4 thousand transactions. The market capitalization of the listed shares increased from 165.9 trillion sums ($13.5 billion) in early 2023 to 237.9 trillion sums ($18.95 billion) by the end of June 2024.
According to the Central Securities Depository of Uzbekistan, the number of broker clients with non-zero balances as of July 1, 2024, amounted to 813.6 thousand units. 749.2 thousand of them belong to individuals.
Turkmenistan
The stock market of Turkmenistan is represented by the Ashgabat Stock Exchange, which was established on August 17, 2016. On the website you can find 8 companies that are listed as issuers, 2 of which are from the banking sector, 2 from the textile industry, one confectionery factory, one from the automotive sector and one manufacturer of meat products.
Moreover, this year 4 companies that issued bonds were included in the list at once. From 2019 to 2024, 72 securities transactions totaling 85.9 million manats were made, which is equivalent to $24.4 million at the official exchange rate. It is interesting to note that in 2024, three deals worth 3.6 million manats ($1 million) were completed.
Until 2023, transactions were carried out only with shares, whereas starting from 2023, 6 transactions were carried out with bonds, and only one with shares. Most of the transactions since 2019 have been carried out by the above-mentioned two issuing banks.
Four deals were made on the bonds of the leather goods manufacturer in August and December last year for a total amount of 30 million manats ($8.57 million). Otherwise, information about the exchange and its activities is limited. The lists of stocks and bonds are empty.
