/KASE, March 1, 13/ – On November 15, 1993 Kazakhstan introduced its own currency – tenge.

Two days later – on November 17, 1993 – the National Bank of the Republic of Kazakhstan and twenty three leading local commercial banks took a decision to set up a currency exchange. The Interbank Currency Transaction Center, a unit of the National Bank, was supposed to operate as a separate legal entity. That was the beginning of Kazakhstan Stock Exchange, and November 17 is its birthday.

Main objectives set for the then new exchange was organization and development of the national currency market following the introduction of tenge. As an independent legal entity the exchange was incorporated on December 30, 1993 under the name "Kazakhstan Interbank Currency Exchange" and in the form of a closed joint-stock company. Later, during the first two years of its existence the exchange was conducting of foreign currency trading only.

Idel Sabitov, now the First Vice-president of KASE, remembers that time:

"I joined the exchange on March 1, 1993; those days The Interbank Currency Transaction Center was in the National Bank's premises. Initially, the currency trading was conducted by the method of fixing; it used to be a voice trading for a long time. When I came in the Centre quotation during the voice trading were written on a chalkboard. Nurlan Amirzhanov and Arman Botpaev were conducting the trading; Duisen Shyndauletov was the President of the Center; Bakhytzhan Konkashev was my curator. My first task was to write a software for the trading screen. About two weeks later the biggest monitor available for a PC was bought; it was displaying the currency trading, including the first USD/Kazakh tenge transactions (the ever first tenge/USD exchange rate was fixed on November 17, 1993 at KZT4.68/US dollar). Around one/one and a half years later the first electronic trading system was programmed. The first electronic trading session took place in a small room on the ground floor of an apartment block at the crossing of Chapaev and Satpaev streets. The team at that time was small in number but very much consolidated financial statements. That was an unforgettable time and an unrepeatable atmosphere; there was a feeling we were doing something new and unique".

So, that was the beginning. An institution was set up capable of trading in financial instruments. And that fact was used for the further development. On October 2, 1995 following the obtaining of a license to conduct stock exchange activities on the securities market, KASE got directly involved in the stock market.

It should be said that in the 1990-s there were several attempts to set other floors for securities trading in Kazakhstan. However, the particular project of a floor based on technologies and infrastructure of Kazakhstan Stock Exchange proved to be the most successful.

Our exchange was for the first time incorporated under the name Kazakhstan Stock Exchange only on April 12, 1996, and in November that year it received a license to trade in securities from the National Commission of the Republic of Kazakhstan for Securities (the government body designed for supervising and licensing on the country's stock market).

In 1997 activities of the stock exchange were legally restricted to securities only, which necessitated a split of the exchange in two: the currency exchange – JSC "Almaty financial instruments exchange" (AFINEX) and stock exchange – JSC "Kazakhstan Stock Exchange" (KASE). The same year was marked with the first trading in non-government serial securities on Kazakhstan Stock Exchange which took place on September 19 when common and preferred shares of OJSC SB "Neftechimbank" were put up for trading.

Since then began the real history of Kazakhstan's organized stock market.

"Indeed, 1997 was marked not only by substantial legislative novelties in the country's financial system. That year is definitely the year of birth of Kazakhstan's stock market. The first ever listings occurred at that time and the first official list of securities was put together. The beginning was rather brisk: by the end of 1997 13 companies quoted their securities on KASE with the trading volume reaching KZT175 m and capitalization – KZT101 bn. A year later there were thrice times as many companies listed on the exchange with capitalization increasing 1.5 times, and the trading volume rising over 10 times", – remembers Nataliya Khoroshevskaya, one of the veterans of the exchange, a member of the Management Board, director of Department for Information and Analysis who joined 19 years ago.

In 1998 following another change in the legislation AFINEX and KASE got a chance to merge leading to the exchange becoming a universal trading floor operating the entire financial market.

Its logo – the green triangle with the abbreviation KASE – was registered by the exchange as a trademark on September 12, 2000.

"I joined the exchange at the end of 1996 when the KASE logo was virtually the shape which was registered later. Following a task set by the top-management I made small changes to fonts and the shape of the writing on the logo bringing it to the form now today as the Exchange's official logo", – reminds KASE Vice- president Andrei Tsalyuk. "There are a few versions explaining the triangle form of KASE logo. I tend to accept the one which says the triangle symbolizes the universal character of KASE, i.e. three main segments – the currency market, derivatives market and securities market. Today the "triangleness" of the logo we explain by the availability on KASE of three main markets – the currency market, the securities market and the money market (the "repo" market, which takes almost half of the exchange turnover), in view of the fact that the derivatives market in Kazakhstan has not gained a due momentum", – says Andrei Tsalyuk.

2007 became a pivotal year for Kazakhstan Stock Exchange. Prior to that year KASE was anon-commercial organization. That meant its shareholders did not receive direct financial benefit from its operations. All revenues from commission fees and dues were channeled to development – purchase of equipment, modernization of technologies, personnel training. And the exchange, on its part, concentrated on developing the organized market in Kazakhstan.

On August 8, 2007 after relevant amendments to the current legislation on the securities market became effective, the Exchange received the status of a commercial organization. Its shares became accessible for any interested parties (earlier, the circle of Exchange shareholders was restricted by the legislation to only professional participants of the securities market and other particular organizations). From the same date the principle of voting on the general meeting of Exchange shareholders ("one share – one voice" came instead of "one shareholder – one voice") and introduction of a restriction on the maximum number of shares which can belong to one of its shareholders.

KASE's new status has found its reflection in the operation planning. In summer 2007 on a shareholders meeting for the first time was approved KASE's own development strategy – for 2007–2010, and business-planning was implemented in the corporate practice.

The approach to dividends which were being paid out since 2010 has changed, too.

KASE's newest history is remarkable through the extension of international activities, introduction of corporate governance standards, work on comprehensible risk minimization with advancing to a new level of reliability of trading and settlements, thanks to which in 2012 KASE successfully managed the first stage of government program "People's IPO".

Today KASE is an active member of the Federation of Euro-Asian Stock Exchanges (FEAS). In 2010 the Exchange in the person of its President Kadyrzhan Damitov became a member of the Executive committee of that major exchange association, thanks to which in 2011 KASE acted as organizer of the 17-th General assembly of FEAS in Almaty.

Being an affiliated member of the World Federation of Exchanges, KASE works on increasing its status to the full membership to that organization.

Thanks to the cooperation with Bloomberg LLP and Thomson Reuters, since 2010 KASE has been regularly supplying its market data to global markets in real time mode. KASE trading floor's quotations are used by international agencies including Dow Jones Indexes and Standard & Poor’s Financial Services LLC for calculation of four regional indices.

The launch of the updated derivatives market based on the risk management system compliant with international standards, the listing of Islamic instruments, membership of non-residents to KASE, creation of the new trading system using the latest achievements of information technology, people's IPO is the newest history of Kazakhstan Stock Exchange.

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With this block the Exchange opens the series of the "KASE's 20th anniversary" publications, where main moments of the growth and development of separate sectors of the exchange market, history of the Exchange and other interesting facts of KASE biography will be presented.

[2013-03-01]