NATIONAL BANK OF KAZAKHSTAN PROVIDES CLARIFICATIONS TO NSC REGARDING THE PURCHASE OF FOREIGN EMTTERS' SHARES

/IRBIS, Nov.30, 99/ - The National Bank of Kazakhstan, in return to the request of the National securities commission of Kazakhstan (NSC), by its letter #25010/2800 of November 29, 1999 informs the commission of the following: "According to section 2 of the Regulations for procedures on licensing the activities involving the use of foreign currency, approved by the resolution #130 of the Board of the National Bank of Kazakhstan, dated April 24, 1997, activities to be licensed are those which provide for transfer (flow) of currency valuables from the residents in favor of non-residents, including investments of the residents made to abroad. Operations involving purchase of foreign emitters' securities by the residents of Kazakhstan for national currency is not subject for licensing, because no transfer of currency valuables from the resident in favor of non-resident". The letter was signed by vice chairman of the National Bank M.Kudyshev. It can be inferred from the letter that Kazakhstani brokerage and dealing companies have no restrictions for trading in securities of foreign emitters on the territory of Kazakhstan (particularly, emitters of Kyrgyz republic) provided settlements of accounts are carried out in tenge and if these shares are allowed to circulate in Kazakhstan by NSC. Inquiry was based mainly on admittance of common inscribed shares of Kyrgyz emitters on the territory of Kazakhstan by the NSC on November 4, 1999: OJSC "Kyrgyztelecom" (Bishkek), JSC "Kyrgyzenergo" (Bishkek) and "Kantsrkii tsementno-shifernyi kombinat" (Kant). Shares of these emitters were allowed to be traded on November 15 in "Non- listing securities" of KASE at second level of admittance. Despite a presence of regular quotations, no deals have been made in these securities so far. Brokers indicate the absence of the license for exporting capital as the one possible reason for the market to be passive.