Kazakhstan’s securities market continues to demonstrate impressive growth in 2024, despite global economic challenges.
Increased trading activity in the stock and bond markets, along with the development of the collective investment market, has become key drivers of this growth.
This analysis is based on the July 2024 Financial Sector Review of the Republic of Kazakhstan, which provides up-to-date market indicators and trends for market participants.
Market Capitalization and Stock Market Dynamics:
The market capitalization of Kazakhstan’s stock market in July 2024 increased by 1.9% to 32.9 trillion tenge. Since the beginning of the year, the capitalization has grown by 23.1% or 6.2 trillion tenge, indicating strong investor interest in Kazakhstani companies’ shares. Large companies, such as JSC “Bank CenterCredit” (+9.9%), JSC “KazMunayGas” (+5.8%), and JSC “Kazakhtelecom” (+5.5%) made significant contributions to the growth of capitalization.
The KASE index also showed positive dynamics, increasing by 1.6% to 5,234.4 points, which is 25% higher than at the beginning of the year. This growth reflects the resilience of Kazakhstan’s stock market and high demand for financial instruments.
Stock Trading Volume:
The volume of stock trading on the Kazakhstan Stock Exchange (KASE) in July 2024 reached 54.9 billion tenge, which is 5.4 times higher than in June. This growth was driven by active share buyback transactions in companies such as JSC “AK Altynalmas” and increased interest in the shares of JSC “Altai Resources” and JSC “Kcell.” The increased participation of institutional investors, including pension funds and insurance companies, played a key role in boosting trading volumes. The increase in trading volume, along with the rise in market capitalization, suggests continued market activity in the stock segment.
Bond Market Development:
The bond market remains an important component of Kazakhstan’s securities market. In July 2024, the volume of corporate bonds on KASE reached 14.1 trillion tenge, which is 0.4% higher than in the previous month and 4.7% higher than at the beginning of the year. Corporate bond trading increased 3.5 times compared to June, reaching 812.2 billion tenge. This growth was driven by new bond issuances from large corporations, reflecting increased demand for corporate debt among both local and international investors.
The primary bond market also showed significant growth, with issuances totaling 761.8 billion tenge, which is 3.7 times higher than in June 2024. Investor interest in corporate bonds continues to rise, demonstrating strong confidence in the corporate sector of Kazakhstan.
The volume of trading in government bonds also increased by 5%, reaching 26.7 trillion tenge in July 2024. Government securities remain an attractive instrument for institutional investors, offering stable returns with minimal risk.
Collective Investment Market:
Kazakhstan’s collective investment market is actively developing, despite temporary corrections. As of August 1, 2024, there were 54 mutual investment funds operating in the country: 25 interval, 28 closed, and 1 open. In July 2024, the total assets of mutual funds decreased by 3.9% (or 11.6 billion tenge) to 288.3 billion tenge. This decline was primarily due to a drop in the value of non-government securities of Kazakhstani issuers included in the funds.
However, when including the assets of joint-stock investment funds, the total volume of assets under collective investment management reached 480.8 billion tenge, which is 2.3% lower than the previous month. The reduction in fund assets is associated with market volatility and portfolio adjustments, but interest in collective investments remains high.
Growth Prospects:
Kazakhstan’s securities market offers broad opportunities for growth. Trading activity is expected to continue increasing against the backdrop of new regulatory initiatives aimed at improving market liquidity and accessibility. The development of collective investments, including mutual and joint-stock funds, will play a key role in attracting retail investors, providing them with opportunities for diversified investments.
Institutional investors, such as pension funds and insurance companies, are continuing to increase their market participation, which contributes to higher trading volumes and improved liquidity. Collective investments, particularly in the form of mutual funds and ETFs (exchange-traded funds), are gaining popularity, offering investors stable and long-term solutions.
Conclusion:
Kazakhstan’s securities market in 2024 shows steady growth, driven by increased trading activity in the stock and bond markets, as well as the development of collective investments. Despite temporary corrections, the market remains attractive to institutional and retail investors. If the current dynamics persist, Kazakhstan could strengthen its position as a key financial center in the region, offering a wide range of attractive investment opportunities.
Prepared by: Sultan Valikhanov
expert at Economy.kz portal
