People’s IPO

People’s IPO

Beginning of 2013 became the time of active work with private investors for the Kazakhstan Stock Exchange. The first stage of People’s IPO attracted more than 20 billion tenge of the nation’s deposits into shares of the national company KazTransOil. This has considerably revived the stock market. On the other hand, along with the rises some falls were also noticeable - mostly for the ‘blue-chips’ whose securities are traded abroad. According to the Committee for Financial Supervision of the National Bank of Kazakhstan the capitalisation volume of KASE in corporate securities sector amounted to nearly 10.5 trillion tenge, or 30.4% of GDP in the first quarter. The same indicator as of January 1, 2013 slightly exceeded 10 trillion or 32% of GDP. Thus an increase in stock market capitalisation in absolute terms is observed whilst capitalisation indicator to GDP decreased. However, investors’ behavior is not affected by these changes. Now specialists pay attention to one of the major factors which is the instability of international markets. The disappointing data on the state of world economy had an impact on the cost of Kazakhstan’s ‘blue chips’ traded abroad for almost six months. Currencies, bonds and repos trading sectors were traditionally dynamic. Thus according to Kazakh Financial Supervision Agency 4 issues of corporate bonds with a total volume of 14 billion tenge were registered on KASE during the first quarter of 2013. Overall as of April 1, 2013 the number of existing bond issues totaled 352 with a total nominal value of around 6 billion tenge. On the other hand the volume of stock transactions on government securities dropped by almost 45% in the first quarter of this year. The volume of IPOs fell by 61%. The share of repo decreased by 44%. Professional participants’ total investment portfolio of the securities market as of April 1, 2013 exceeded 43.5 billion tenge. The largest share within the portfolio belongs to corporate securities - 60.1%. Government securities account for 9.9% and corporate securities of foreign issuers for 15.5%.

Kazakh financial market

Changes at the financial market of Kazakhstan are taking place not as quickly as experts would want. More than one fourth of insurance companies operating in Kazakhstan are subsidiaries of banks and it means that the country has well developed bank insurance and subsidiaries of financial organisations have more benefits than independent insurance companies. Meanwhile, the choice of an insurer in case of taking out a bank loan is a private matter of a client. However the majority of clients do not know it. In 2011 the market of bank assurance experienced considerable changes due to amendments to the law on banks and banking activity in accordance with which the banks are not allowed to restrict a borrower while choosing an insurer. However, in fact the majority of experts believe that the situation is far from ideal. Banks still recommend, impose and even demand from their clients, who have decided to take out a loan, to insure risks at an insurance company, which cooperates with this bank. Experts say that strengthening of requirements of the regulator will help to change this situation. In particular, the Kazakh Competition Protection Agency, but not the National Bank, should toughen up the requirements for financial organizations, since Kazakhstan’s residents suffer losses from bancassurance. Insurance tariffs in banks are about 15-20% higher than those at an independent insurance company. In order to avoid paying higher tariffs while making a borrowing, every borrower should follow a few simple pieces of advice. Before obtaining a loan it is necessary to ask what insurance companies are accredited in this bank and what companies cooperate with this bank. If the bank works with only one insurance company, it means that this company is a subsidiary of the bank and there is no competition here. If the bank has several insurance partners, it is necessary to carefully compare conditions of insurance in each company. The tariff is the main criterion for choosing. In order to find out where insurance is cheaper, it is necessary to address several insurance companies. Sometimes the amount of tariffs differs a lot.

Cinema

According to the Chaplin Cinemas, during only one weekend the Monsters University dubbed in the Kazakh language collected over 1 million tenge. Experts noted that the majority of box office money during weekends was provided by the University of Monsters cartoon and the Man of Steel film. The top five box office leaders are the University of Monsters taking 49.6% of the total revenues, Man of Steel with 34%, After Earth with its 11%, The Hangover Part 3 collecting 1.6% and Fast&Furious 6 with slightly more than 1%. The last three of the mentioned above films saw a 60% box office decrease compared with the previous week. 



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