ANALYSIS: KASE index falling was on similar world markets` movement
17.07.08 17:27
/IRBIS, Ruslan Dzubaylo, July 17, 2008/ - July 9 KASE index reached its
minimal in 2008 - 2,374 point. Since July beginning decreasing made 8.8%,
since year beginning - 10.0%. Falling relative to maximal index value in
the current year didn't exceed 17.5%.
Below the Informational Agency of Financial Markets IRBIS (Almaty)
publishes its opinion on Kazakhstan share market situation.
Prices of Kazakhstan banks` shares fall on main share indexes
decreasing
Notwithstanding the last changes in KASE index` representative list,
instruments of financial sector of the country are still have
a considerable weight in it. Described above index decreasing by 44.6%
was conditioned by prices falling of financial sector's shares, which are
included in representative index list (now they are common shares of 5
denominations and preferred shares of 2 denominations of 5 Kazakhstan banks)
cheapened shares of primary sector - by 43.1%, telecommunication
sphere - by 12.3%.
More detailed analysis of bank sector price dynamic indicates that the fall
was the feature of issuers` instruments, which have parallel listing with
Kazakhstan Stock Exchange (KASE) on London Stock Exchange (LSE)
(tabl.1).
The main liquidity and activity on these instruments, as a rule, came to LSE,
due to it; these instruments are under system risk of Britain and
correspondently world markets. The main stake of free float of such
companies came to foreign investors, who (1) invested in Kazakhstan,
as in developing economy, with the aim to get fast and big profit; (2) under
the influence of panic moods are capable of quickly closing of Kazakhstan
position, without understanding the situation; (3) as a rule are not
qualified on acute condition of Kazakhstan issuers. Such investor base easy
and predictably reacts to behavior of leading world indexes.
Table 1. Price dynamic of bank equity instruments, included in representative
list of KASE index from July 1 to 9 2008 (in %)
-------------------------------------------------------------
Share Price Share in
Issuer code trend index
------------------------------------ ----- ------ --------
BTA Bank JSC BTAS -0.16 15.77
------------------------------------ ----- ------ --------
Bank CenterCredit JSC CCBN -1.41 9.45
------------------------------------ ----- ------ --------
Halyk Savings Bank of Kazakhstan JSC HSBK -11.45 13.36
------------------------------------ ----- ------ --------
Kazkommertsbank JSC KKGB -14.15 13.88
KKGBp -6.67 2.39
------------------------------------ ----- ------ --------
Temirbank JSC TEBN 0 3.49
TEBNp +9.80 0.39
-------------------------------------------------------------
On July beginning problems in American financial centre seriously worsened
after it was known about condition of major American mortgage
organizations Freddie Mac and Fannie Mae. Investors all over the world
began mass selling of financial organizations` securities. Global depositary
receipts of Kazkommertsbank JSC and Halyk Savings Bank of Kazakhstan
JSC were not exceptions. Over July these securities quotation on LSE
decreased by more than 13%, what cannot help but reflect on these shares
quotation on KASE.
Prices decreasing on world commodity markets force primary
company's prices downward
By the same reasons hydrocarbon raw price on world markets fell by $10.
As a result, quotation of Exploration Production KazMunaiGaz JSC, which is
under high price risk, reacted by decreasing by 7.62%.
On shares of other representative of primary market - KAZAKHMYS PLC -
was fixed decreasing by 17%. Securities' selling of this copper giant was
connected with unfavorable situation on world metal markets and
Kazakhstan activity on improving its strategic influence on primary sector
(recent deal on exchange ENRC shares for 15% of KAZAKHMYS PLC).
As a result share price of Exploration Production KazMunaiGaz JSC and
KAZAKHMYS PLC provided KASE index fall by 43 % during described lag
(Tabl.2).
Situation in telecommunication sector is calm
During analyzed period the sole representative of telecommunication sphere
in representative list - Kazakhtelecom JSC made minor influence on index.
Common shares of this company corrected price till previous level after short
time and unjustified, from the viewpoint of company activity, growth at the
end of May - June beginning. Leap in KZTK price was conditioned by
purchase of considerable block of shares by one of participants.
Situation has become steady
Judging by last exchange data, situation on KASE share market has become
stable. By this information preparing time, KASE index was at 2,426 point.
Normalization on world share markets contributed to stability after
announcement that badly suffered Freddie Mac and Fannie Mae will be
supported by the government. Negotiations of KAZAKHMYS PLC and
Rusiian Metalloinvest on possible merge also influenced the market.
In accordance with above-mentioned facts, we forecast correction of KASE
index to 2500 point in nearest future.
[2008-07-17]