Developing critical tools for a prosperous society in Kazakhstan

By: Ermek Mazhekenov, Deputy Chairman of the Management Board, Kazakhstan Stock Exchange Oct 2021

Supporting financial literacy and investment culture are important factors for increasing a population’s interest in stock market instruments and, hence, for the development of a market.

Kazakhstan Stock Exchange (KASE) has long conducted educational activities aimed at promoting the stock market. Over the past year, the exchange has implemented several educational programmes in various formats to arouse the interest of various target audiences, from students to existing retail investors. In light of the recent inflow of active retail investors into the capital market, KASE is expanding its range of programmes aimed at developing an investment culture and increasing financial literacy.

These programmes and events – covering the essentials of the stock market – are crucial tools for citizens, especially those who are taking their first steps into the world of stocks and bonds, so that they can explore long-term opportunities in capital markets.

Today, almost 188,000 people in Kazakhstan have brokerage accounts, including more than 55,000 who came to KASE for the first time this year.

The exchange has joined a number of global initiatives aimed at promoting financial literacy and developing financial education, such as the annual World Investor Week to “Ring the Bell for Financial Literacy”. KASE also supports the Global Money Week initiative coordinated by the Child and Youth Finance International (CYFI) Secretariat to raise awareness of Economic Citizenship and engage children and youth. As part of the Global Money Week, KASE recently held a webinar called "Essentials of the Stock Market", which was attended by students from nine Kazakhstan universities. In addition, video tutorials developed by KASE are available on social networks.

Simulator competition 

From April 1 to May 31, 2021, KASE held the first round of its long-running annual "Stock Market Simulator" competition, in which almost 2,000 students from more than 60 universities took part. The goal of this initiative is to increase the financial literacy of students from financial, economic and other majors who want to expand their professional portfolios, as well as acquire practical skills for trading in the stock market.

As part of the first round of competition, future investors concluded deals worth a combined KZT6.7 billion (US$15.7 million). Various instruments were available to participants, including first-class liquidity shares, shares of well-known brands such as Exxon Mobil and Coca-Cola, as well as securities of investment funds. The second round will take place in autumn.

The Exchange Simulator project has been running since 2008. In 12 years, thousands of students from 80 different universities have taken part, including many from overseas. The competition is available to participants through the KASE Mobile app in Google Play and the Apple App Store.

Professional education

In addition to fostering financial literacy among retail investors, KASE conducts extensive ongoing educational work among the owners and executives of companies, employees of development institutions and local executive bodies on the practical application of stock-market instruments.

In 2021 so far, five round tables and one online training workshop have been organised.

At the beginning of the year, the exchange – together with the Association of Credit Associations of the Agrarian Complex – held a round table on the essentials of the stock market for credit partnerships. The event was held in order to raise the level of awareness of credit partnerships and microfinance organisations about the local stock market. Speakers from KASE gave presentations about the possibilities of equity financing through the Exchange, explained the listing procedure and KASE's requirements for issuers. The event was attended by more than 30 participants.

Events following this format were held by the Exchange jointly with the Association of Microfinance Organizations of Kazakhstan, the Association of “National League of Pawnshops of Kazakhstan”.

Also this year, KASE held online round tables for regional entrepreneurs together with the mayor’s offices of the local regions, Entrepreneurship Development Fund Damu. The round tables were devoted to the topic of raising capital in the stock market. The audiences comprised representatives of local businesses and professional participants of the regional market.

In June 2021, KASE, together with the Federation of Euro-Asian Stock Exchanges (FEAS) and the European Bank for Reconstruction and Development (EBRD), held an “IPO Workshop”. The training webinar covered such areas as the process of bringing a company to an IPO, stages (preparation-implementation-post IPO), roles and tasks of participants, key factors for the success of an IPO, and case studies. Over 120 people participated.

Governance and transparency 

KASE also held training sessions in 2021 on the implementation of corporate governance and increasing the transparency of Kazakh companies. In the first half of the year, KASE organised and held an event dedicated to the topic of corporate governance in accordance with the criteria of environmental, social and corporate governance (ESG).

In May 2021, a training seminar was held for KASE-listed companies and other interested parties, together with the rating agency Expert RA and the consulting company Pricewaterhouse Coopers Tax and Advisory LLP on the topic: "Disclosure of ESG factors for KASE-listed issuers".

With the development of investment infrastructure and public financial literacy, the number of high-quality investors in Kazakhstan is growing. By getting involved in the stock market, buyers will endavour to pick the best, most successful, efficient and transparent companies, and therefore companies will strive to improve their operations, product and service quality, sustainability and transparency. This is an essential prerequisite to more sustainable economic growth and higher living standards in the country.