KASE's Management Board fixes Q2 2021 weighted average yield rates for calculation of fair value of illiquid debt securities of organizations – residents of Republic of Kazakhstan

08.04.21 18:13
/KASE, April 8, 2021/ – Following a decision of the Management Board of Kazakhstan Stock Exchange (KASE or the Exchange) dated April 8, 2021, the following weighted average yield rates for calculation of the fair value of illiquid debt securities issued by organizations – residents of the Republic of Kazakhstan were fixed for the second quarter of 2021: 1) on tenge-denominated non-indexed debt securities: for category "bonds" of the main market – 8.55 % APR; for category "commercial bonds" of the main market – 10.67 % APR; for category "bonds" of the alternative market – 17.08 % APR; for category "commercial bonds" of the alternative market – 16.42 % APR; 2) on tenge-denominated debt securities indexed at inflation or with a floating rate, independent from the exchange rate of the tenge to a foreign currency; for category "bonds" of the main market – 13.11 % APR. for category "bonds" of the alternative market – 5.75 % APR. KASE's Management Board made a decision not to fix the weighted average yield rate of debt securities for groups of securities, in respect of which it is impossible to calculate values of this rate. The procedure for calculation of the weighted average yield rate of debt securities was determined by the new internal document of KASE "Methodology for Calculation of the Weighted Average Yield Rate of Illiquid Debt Securities and for Determining their Fair Value" (hereinafter – the Methodology), approved by a decision of KASE's Board of Directors dated April 11, 2018. We remind you that the mentioned weighted average yield rates are determined in accordance with the Rules for Accounting and Assessment of Pension Assets approved by the Resolution No. 24 of the National Bank of the Republic of Kazakhstan dated February 26, 2014 (the Rules) as follows: 1) according to item 17 of the Rules, the Exchange must weekly release on its website the data on the fair value of illiquid debt securities issued by resident- organizations of the Republic of Kazakhstan and included in the Exchange’s Official List. The mentioned securities mean securities, the market value (yield) of which cannot be calculated in accordance with the Exchange's internal document "Methodology for Securities Valuation"; 2) According to item 16 of the Rules, the fair value of the mentioned securities is determined based on the Methodology. The weighted average yield rate is determined by the Exchange's Management Board once a quarter for each particular category (sub-category) of the "Debt securities" sector as part of separate markets of the stock exchange's official list for each of the following groups of securities: tenge-denominated non-indexed debt securities; tenge-denominated debt securities indexed at the inflation or with a floating rate (independent from the exchange rate of the tenge to the foreign currency); tenge-denominated debt securities indexed at the exchange rate of the tenge to the US dollar and US dollar-denominated debt securities. For reference: on August 3, 2020, KASE put into effect the new edition of the Methodology for Securities Valuation (minutes No. 19 of the meeting of the Board of Directors dated June 9, 2020). This Methodology allows calculating prices of all securities, including illiquid ones. This Methodology was put into effect in connection with the introduction by the Exchange of the institution of the central counterparty and the risk management system, which includes a system for evaluating securities. Methodology for Securities Valuation is available on KASE website – https://kase.kz/files/normative_base/met_ocen_zb_eng.pdf The methodology for calculating the weighted average yield on illiquid debt securities and determining their fair value is available on KASE website – http://kase.kz/files/normative_base/metodika_discountrates_eng.pdf [2021-04-08]