EXPERT INTERVIEW: KASE index further falling

/IRBIS, Alima Kopbaeva, Dinara Mukasheva, July 17, 2008/ - Since July beginning, KASE index fell by 8.8%, annual minimum was reached on July 11, 2008 with 2,407.79. Analysts, participated in expert interview of IAFM IRBIS consider that the main reason of such unprecedented falling is unfavorable situation on world stock markets. In particular, experts indicated such reason as aggravation of problems in USA bank sector in July, connected with major mortgage agencies Freddie Mac and Fannie Mae critic situation. All this and pressure, exerted by the negative evaluations of international rating agencies of the current Kazakhstan economy position and its agents also influence KASE index falling. In this relation analysts expect further decline on domestic stock market after the decline on world markets. "KASE index fall after decreasing of Kazakhstan issuers` shares quotation on London Stock Exchange. In its turn, prices fall on Kazakh issuers` shares connected not with their activity but with general worsening situation on world stock markets" - Bakhtiyar Bakas uly, analyst of Vernyi Capital JSC comments, who considers that Kazakhstan Stock market hasn't reached its bottom. Jason Gurvits, analyst of VISOR Capital JSC, considers that reaching the minimal level by the market depends on negative news in Kazakhstan or all over the world in future. Evgeniy Popov, the director of asset management Department of Almex Asset Management JSC has the same point of view. "We are likely to see quotation decreasing on the range of Kazakhstan bank's shares, however, the value of separate bank's shares decreased by more than 50% and here we don't expect significant decreasing. We possibly observe now the second decreasing wave, after which the market reach its bottom". Financial analyst of investment and financial management Department of RESMI Finance & Investment House JSC Azamat Eskozha shares Mr. Popov`s opinion; he compares shares falling of Halyk Savings Bank of Kazakhstan JSC - the most stable and protected among local banks and growing anxieties of investors on Kazakhstan financial industry. "Sharp quotation declining was again aroused by nonresidents` escape from market, which sells shares at first negative signs. According to statistic of Central Securities Depositary JSC, volumes of securi- ties in nominal holding of nonresidents during recent months characterized by big instability. If for April and May 2008 volumes grew by 7% for month, but for June they fell by 5%. However, owing to blackness of this statistic, it is hard to describe detailed picture" - the expert of RESMI Finance & Investment House JSC considers. At that, Mr. Eskozha thinks that the current price levels on major Kazakhstan banks have no significant investment interest. The other reason of share index entering the stage of "bear" market, analysts name influence of news of primary market. In particular, analyst of Centras Securities JSC Ruslan Bulikbaev thinks that oil prices will be retain on high levels, situation in financial centre will not be stable and shares will continue falling. Analyst of external analysis and forecast office of BTA Bank JSC Vitaliy Kan, excluding above mentioned negative factors influence KASE index dynamic also marked amplification of Kazakhstan republic supervision over primary sector, expressed in recent deal on purchasing of KAZAKHMYS PLC block of shares in exchange for the part of state block of shares of ENRC (at that, Mr. Kan marks that the news concerning possible merge of Metaloinvest and KAZAKHMYS PLC aroused growth of shares quotation of the last and leveled the fall in this sector). "For the current moment it is hard to forecast relative to bottom reaching by the market). Further movement of Kazakhstan share market will be mostly depend on external factors - losses of major western banks, condition of leading world countries` economy, dynamic on world commodity markets est. We think that "bear" mood on share market will be likely to retain in nearest future" - Vitaliy Kan considers. Information is presented within the frames of weekly expert interview on acute questions of Kazakhstan and international stock market development, made by IAFM IRBIS. Analysts of Almex Asset Management JSC, BTA Bank JSC, Vernyi Capital JSC, Centras Securities JSC, RESMI Finance & Investment House JSC, VISOR Capital JSC participated in interview. IAFM IRBIS expresses its gratitude for participation in this project. For detailed information please contact us Tel.: (727) 237 53 41 [2008-07-17]