LSE and Russian exchanges are competing for the right of strategic partnership with KASE - FT

/IRBIS, December 7, 2011/ - The London Stock Exchange and Russian exchanges are competing for the right of strategic cooperation with the Kazakhstan Stock Exchange, reported The Financial Times December 5. As the FT noted, maneuvering comes against the backdrop of preparations for the launch by KASE of the program "People's IPO", in which the share of government in a number of state companies will be privatized. As noted, the largest local companies are not actively seeking to place on the local area, putting more effort to get a listing on the London Stock Exchange. It was indicated that Kadyrzhan Damitov, President of KASE, said that within two-years Development strategy the Exchange will upgrade its trading system, as well as the obligation will be introduced to Kazakh companies for mandatory placement of 20% of its shares on KASE before the release on foreign stock exchanges. As part of the abovementioned, LSE and the two main Russian stock exchanges - MICEX and RTS - offered KASE their services for the provision of trading systems and other forms of cooperation. "We have number of offers from the LSE and the Russian stock exchanges, as well as from other companies", - said K. Damitov to FT. He added that after a recent visit to London of the official representatives of Kazakhstan, LSE offered a broad partnership, discussion of which is "at very preliminary stage". As stated, in the FT interview Xavier Role, head of the LSE, said: "We are in the early stages of discussions with a number of exchanges, and there are certainly interesting opportunities." However, as stated, LSE may face competition from the MICEX and RTS, which will be merged by the end of the year, which will also seek to establish links with the capital markets of neighboring countries. However, as the FT notes, K. Damitov also pointed out that each proposal for collaboration presents its difficulties, suggesting that the decision will be finely balanced. "The use of products or trading systems of foreign exchange is very difficult and complicated issue from technical and legal point of view. This is not only a choice to buy something on commercial basis, but also a very important issue from the regulatory, political and strategic perspectives", - he said. "If we're talking about the proposal of LSE, it is important to clarify some technical issues, as well as a number of certain legal issues which are also very important. This is not an easy task, even without any political and strategic issues", - said the head of KASE. Mr. Damitov added that while the choice of cooperation with MICEX/RTS would be a "logical choice" with regard to geographic and linguistic similarities, "taking into account the size of the Russian economy, as some other aspects that will be discussed", making this choice a "sensitive political and strategic issue". Recall, Sovereign Wealth Fund "SK" will sell about 5-15% of the shares of state companies, which are controlled by it, within the program "People's IPO". Listing of three companies - JSC "KazTransOil", JSC "AirAstana" and JSC "KEGOC" is scheduled for May next year. "It will be more organized and systematic way to attract retail investors. It is important for us because one of our problems is the low level of liquidity, and with the involvement of the mass of retail investors we could expect a slight increase in transactions on our secondary market", - said K. Damitov. [2011-12-07]