Overview of companies from representative list of KASE Index and their shares in 2021
/KASE, 31.12.21/ – Kazakhstan Stock Exchange (KASE) summarizes the main
factors that influenced the dynamics of prices of shares from the representative
list of KASE Index in 2021.
NAC Kazatomprom JSC
The shares of NAC Kazatomprom JSC became the growth leader among the
representatives of KASE Index list. Over the year, their price increased at KASE
by 131.5 % against the background of the global energy transition, which
brought to a new level the role of nuclear energy and uranium as raw materials
for its production. As a result, the company's shares were showing double-digit
growth rates almost every month, with the maximum price fixed on November 15 –
KZT20,900.00 per share.
The uranium rally continued throughout the year. In the first half of the year,
uranium prices were supported by a strong dissonance between supply and
demand in the world market, in the second half of the year – by activity on the
part of financial investment companies interested in shares of uranium trusts.
This year, the governments of more than 20 countries have expressed interest in
the transition to nuclear energy. The United States have renewed their
membership in the Paris Climate Agreement and has targeted one of its fiscal
stimulus packages at the development of nuclear power. China has ratified a plan
to support nuclear power. The European Commission has initiated the issue of
including nuclear energy in the sustainable taxonomy of the European Union.
Japan's Ministry of Economy, Trade and Industry has highlighted even more
opportunities for the nuclear industry in its updated Strategy for Green Growth
by Achieving Carbon Neutrality by 2050. Rosatom has announced plans to increase
the share of nuclear energy in the country's energy balance, and the Russian
Federation has included nuclear energy in the project of the national taxonomy
of green projects.
Meanwhile, there were also changes on the part of the uranium supply. In
Australia, the uranium mine Ranger, operated by Rio Tinto's subsidiary, has
ceased operations. Orano's Akuta mine ceased operations in Niger. For almost six
months, due to quarantine restrictions in Canada, the Cigar Lake mine in Canada,
owned by Cameco Corporation and Orano Canada, did not work.
In the second half of the year, the uranium imbalance in the market began to
recover, but in the stock markets, private investors became interested in a new
product – trust funds investing in physical uranium. The Sprott Physical Uranium
Trust began trading on the Toronto Stock Exchange on July 20. At the end of
2021, the trust manages assets in the amount of $1.77 billion and 41.3 million
pounds of uranium. This is approximately 30% of the global annual consumption.
Since its entry into the market, prices for uranium futures have increased from
$30.3 to $50.8 per pound, reaching the level of 10 years ago. Subsequently,
several more large uranium funds were registered, including Kazatomprom
(48.5%) together with the National Bank (48.5%) and the Chinese management
company Genchi Global Limited (3%) founded a trust called ANU Energy OEIC Ltd.
Financial results and dividends.
On March 17, Kazatomprom published its annual report, according to which the
volume of sales in 2020, despite the pandemic, increased by 2 % compared to
2019, and the net profit amounted to 221.4 billion tenge. At the meeting on May
20, it was decided to use 150 billion tenge of this amount for dividend
payments. In terms of one share, the amount of dividends was 578.67 tenge. The
record date was fixed on July 14. Dividend yield by the record date – 4.7 %.
According to the results of 9 months, despite the price rally and increased
interest in uranium raw materials, the sales volume in the Kazatomprom group
decreased by 15 %, and the average sales price increased by only 1%. The
company attributes this to "the timing of customer requests for delivery and
the corresponding differences in delivery schedules in 2020 and 2021."
According to financial statements, net profit for 9 months of 2021 amounted to
78.9 billion tenge against 156.7 billion tenge a year earlier.
New projects and changes in the structure of the group.
As part of the privatization plan, Kazatomprom sold three subsidiaries during
the year: on April 15 – Kazakhstan Solar Silicon for 322.9 million tenge, on
June 29 – Astana Solar for 380.6 million tenge, on October 20 – Kaz Silicon for
651.9 million tenge. At the same time, the first two objects were sold at a
cost much lower than the estimated one.
Several major projects with Chinese companies were completed during the year. In
the first half of the year, within the framework of cooperation agreements
between Kazatomprom and China General Nuclear Power Corporation, Kazatomprom
sold a 49 % stake in a subsidiary of SE "Ortalyk" LLP. In exchange, CGNPC
agreed to act as a partner in the construction of a plant for the production of
fuel assemblies (Ulba-TVS) In the second half of the year, Kazatomprom signed
two contracts for the supply of Kazakh natural uranium concentrate with China
National Uranium Company Limited and with State Nuclear Uranium Resources
Development Company Limited.
There have been changes in the composition of the Management Board of the
company: G. Pirmatov voluntarily left the post of the Chairman of the Management
Board, M. Sharipov was appointed on his position. Also, two new members were
added to the Management Board.
Bank CenterCredit JSC
Securities of Bank CenterCredit JSC have grown by 88.7 % since the beginning of
2021. Stocks had been in a protracted bearish trend since 2018, but in March of
this year they jumped sharply to growth. By the beginning of the fourth quarter,
the bank's shares fully recovered the losses of recent years and moved to a
consistent update of historical price highs.
Financial results and dividends.
According to the monthly reports of the National Bank of the Republic of
Kazakhstan, over 11 months the bank's loan portfolio increased by 107 billion
tenge, and the share of overdue loans decreased by 0.3%. Against the
background of the growth of the loan portfolio, the bank's interest income
increased, and the unconsolidated net profit for 9 months of 2021 increased by
42.3% compared to the same period last year. Bank CenterCredit does not carry
out dividend payments on ordinary shares. On preferred shares on February 5, the
Bank's Board of Directors made a decision to pay dividends for 2020 in the
amount of 37.5 tenge per share. The record date was February 8.
On March 30, Bank CenterCredit increased its authorized capital by placing 8
million ordinary shares worth 2.4 billion tenge. On July 9, an agreement was
signed to open a credit line with the EBRD for $20 million under the global
green technology financing program. On November 9, the bank placed seven-year
bonds at KASE at 12.50% per annum in the amount of KZT5.1 bn.
Revision of international ratings.
On September 24, the S&P rating agency raised the bank's rating on the national
scale from "kzBB+" to "kzBBB-", while the rating on the international scale
remained at the B level. On November 23, Moody's upgraded Bank CenterCredit's
rating on the international scale from "B2" to "B1", the outlook is" stable ",
and on the national scale – from "Ba3.kz" to "Ba2.kz". According to rating
agencies, the upgrade reflects a gradual improvement in the bank's own
creditworthiness against the background of stabilizing economic conditions and
reducing economic risk in Kazakhstan.
Halyk Savings Bank of Kazakhstan JSC
In 2021, Halyk Bank over and over again reported on record net profit, paid the
highest dividends in the entire history of publicity, reduced its debt burden by
redeeming bonds worth 1.3 billion tenge, became the first private second-tier
bank in Kazakhstan to receive an investment rating and did not once spoke about
the upcoming transition to a new fintech strategy. Against the background of
such a number of corporate events, the share price returned to the pre-pandemic
level on April 21 and continued to update historical highs until November 15,
reaching 202.89 tenge per share, which is 63.6% higher than at the beginning of
2021. A few days later, the bank released its third quarter financials, which
apparently fell short of investors' expectations. The share price during
several sessions fell to 183.57 tenge and consolidated at this level.
Financial results and dividends
On March 12, the bank published its annual financial statements, according to
which net profit reached a record 318 billion tenge. On April 23, the Board of
Directors made a decision to allocate KZT212 billion to pay dividends (or KZT18
per share), which is the highest amount of dividends in the entire history of
the bank's publicity. The register was fixed on April 26. Dividend yield by the
date of register fixing – 12.1 % per annum. The bank reported even greater
profit growth in the first two quarters of 2021, but growth slowed slightly in
the third quarter. On November 19, the bank reported an increase in net profit
for 9 months by 21% compared to the same period last year, while net profit
decreased compared to the second quarter of 2021. Immediately after the
publication of the report, the share price fell by 4.8% from 199.50 to 190.00
tenge per share.
New development strategy.
During the year, Anton Musin, Deputy Chairman of the Management Board of
Halyk Bank, has repeatedly stated that the bank is transforming its services
into a fintech service. The bank did not officially announce the transition to
a fintech strategy, but announced that it was revising the structure of its
business areas. On August 4, it was announced about the voluntary liquidation
of a subsidiary bank in the Republic of Tajikistan "in order to concentrate on
more priority sectors".
In the first quarter of 2021, Halyk Bank redeemed two issues of international
bonds: on January 28 – HSBKe5 in the amount of USD500 million, on March 1 –
BTASe16 in the amount of USD750 million. On December 10, the bank bought
back from the market slightly more than 869 million of its shares or 7.4 % of
the outstanding share capital, including 699 million ordinary shares at a price
of 182.1 tenge and 3.7 million GDRs at a price of $16.78, respectively. 10.9
billion shares remained in free float on the market, respectively, the free
float indicator decreased from 35.5% to 28.1%. Orders for redemption were
accepted from December 3 to December 9, and already on December 10, through
conducting a special trading session buyback from everyone was carried out on
On April 13, Fitch Ratings upgraded Halyk Bank's long-term rating from "BB+" to
"BBB-" (stable). Thus, the bank's rating moved from speculative to investment
grade. This is the highest rating among Kazakhstan's second-tier banks without
foreign participation. Previously, an investment rating was assigned only to
quasi- state banks or banks with foreign participation. On August 17, Moody’s
upgraded its rating from "Baa3" to "Baa2". On September 21, Standard & Poor's
upgraded its rating from "BB" to "BB+" (stable). As a result of significant
improvements in ESG disclosure based on Halyk Bank's 2019 and 2020
Sustainability Reports, MSCI ESG Research upgraded the bank's sustainability
rating to "BB" on September 17.
The growth of Kazakhtelecom shares at KASE in 2021 amounted to 33.9%. After
the deal was concluded to acquire a stake in Kcell at the end of 2018,
Kazakhtelecom shares lost more than 34% in value. By the time of the completion
of the deal on sales of the company's 24% stake on KASE in October 2021, the
share price fully recovered. The historical maximum of 36,690 tenge per share
was recorded on November 4.
Changing the structure of the Group.
In December 2018, Kazakhtelecom purchased 75% of Kcell shares from Telia
Company and Fintur Holdings BV. In September 2019, Kazakhtelecom initiated
arbitration proceedings against Telia Company A.B. at the London International
Arbitration Court for claims related to certain guarantees contained in the
share purchase agreement. In May 2021, the case was closed in favor of
Kazakhtelecom with compensation in the amount of USD22 million, or KZT9.4
billion. On October 1, Kazakhtelecom announced the sale of 24% of Kcell shares
at KASE. 48 million shares were sold at a weighted average price of KZT1,158.89
per share. The total amount of the transaction was almost 56 billion tenge. On
October 11, Kazakhtelecom acquired 100 % of KT-TELECOM shares, and on November
25, sold 100 % of KT Cloud Lab shares.
Financial reporting and dividends.
The net profit of the Kazakhtelecom group at the end of 2020 is estimated at
65.9 billion tenge. By the decision of the company's shareholders dated April
30, 18.5 billion tenge of this amount was directed to the payment of dividends
(1,730.88 tenge in terms of one share). The register for the payment of
dividends was registered on May 2. Dividend yield by the date of register
fixing – 5.8 % per annum. Following the results of 9 months, the net profit of
the Kazakhtelecom group almost equaled the annual profit for the last year and
amounted to 63.4 billion tenge. Of this amount, 9.4 billion tenge falls on
compensation from Telia Company A.B. Also, financial expenses decreased by 4
billion tenge due to the fact that Kazakhtelecom this year reduced its debt
burden by 39.8 billion tenge.
KazTransOil shares have increased in price by 12.7% since the beginning of 2021.
The main period of price growth fell on the dividend period with the maximum
price fixed on June 7 at KZT1,273.9. After fixing the register for receiving
dividends, the price dropped to 1,093 tenge per share and remained with slight
deviations from this level until the end of the year.
Tariff plans of the company.
From January 1, 2021, the Committee for Regulation of Natural Monopolies
(CRNM) approved an increased tariff for pumping oil to the domestic market for
the company in the amount of 4,355.57 tenge per 1 ton per 1,000 km, which
should be valid until 2025. A stable high tariff for oil pumping supported the
price in the post- dividend period, but there were no additional growth factors
during the year, therefore, after the correction, the share price consolidated
at the level of 1,090 tenge per share. On November 30, the CRNM announced the
revision of the tariff and its reduction from January 1, 2022 to KZT 3,728.82
per 1 ton per 1,000 km.
Financial results and dividends.
On April 9, the company published its annual financial statements, according to
which net profit increased by 24% from 45 to 56 billion tenge. On April 27, the
Board of Directors decided to distribute 51 billion tenge of net profit in the
form of dividends, which is 132 tenge per share. The record date is set for
June 11. Dividend yield by the record date was 11.4 % per annum. The financial
statements for 9 months showed a decrease in the company's net profit by 5.8%
compared to the same period last year. Consolidated cargo turnover decreased by
0.85% YoY to 32.5 billion ton-kilometers, and oil and gas condensate production
in Kazakhstan for 9 months of this year amounted to 62.4 million tons, which is
3.6% less than in the same period last year.
Work on the construction, reconstruction and commissioning of new facilities was
carried out in accordance with the approved plans: on May 13 and December 7,
within the framework of the approved business plan for 2020-2024, the company
announced the replacement and commissioning of 36 km of the oil trunk pipeline
"Uzen-Atyrau-Samara". On June 30, within the framework of the terms approved
by NC KazMunayGas JSC, the main pumping station of the OPS "Aman" was put
into operation under the project of the reverse of the Kenkiyak-Atyrau oil
pipeline. On August 23, within the framework of the overhaul project, sections
of the Prorva - Kulsary oil pipeline with a total length of 16 km were put into
operation after reconstruction.
KEGOC shares have grown by 9.9% since the beginning of the year. The growth
was fairly uniform over the months, in the second half of the year the share
price regularly updated its historical highs, the peak fell on November 2 at
around KZT1,861.0 per share.
Tariff plans of the company.
For most of the year, the company operated under reduced tariff conditions: from
January 1 to September 30, 2021, the electricity transmission tariff was 2,448
tenge per kW/h, which is 12% less than the level of 2020. For almost the entire
year, KEGOC coordinated investment plans and tariffs for the next five years
with the Committee for the Regulation of Natural Monopolies (CRNM), and only
from November 1, the tariff was raised to 2.797 tenge per kW/h.
Financial results and dividends.
In 2021, there was an explosive growth in the production and consumption of
electricity, and this had a positive effect on the volume of services provided
by the company. As a result, despite the low tariff, for 9 months the company's
profit decreased by only 3% compared to the same period last year. The company
traditionally pays dividends twice a year. On April 27, the Board of Directors
decided to distribute 19.5 billion tenge out of 53.5 billion tenge of net profit
for 2020 in the form of dividends or 75.01 tenge in terms of one share. The
register was recorded on April 11. Dividend yield by the fixing date – 4.4%. On
October 29, the Board of Directors decided to distribute 22.0 billion tenge out
of 27.5 billion tenge of net profit for the first half of 2021 in the form of
dividends or 84.72 tenge in terms of one share. The date for fixing the
register was set on November 8. Dividend yield by the fixing date – 4.5% per
annum. This is the largest amount of dividends in the entire history of the
New bond issues.
During 2021, KEGOC raised funds twice on KASE's debt market: on January 27,
KEGOC raised KZT8.6 billion with an average weighted yield to maturity of
11.6161 % per annum, on October 21 – KZT16.6 billion at a yield to maturity of
11.50 % per annum. Both issues were released under the KEGCb3 bond program
with maturity on 28.05.2035.
Kcell shares began 2021 with the renewal of historical price highs. The peak
fell on January 13, when the company's shares cost KZT2,840.00 per share. In
early February, the price began to fall and by August 24 fell by 57.6% to
KZT1,203.00. The last time at this level, the company's securities were traded
in June 2017, before the first rumors about the buyout of 75% of Kcell's stake
by Kazakhtelecom. Since August 24, stocks have made several attempts to change
the trend, but they were finally able to move to growth only on October 10. In
less than a month, the securities rose in price by 45.5% to KZT1,751.11 per
share, and then went back to a gradual decline.
GDR program discontinuation.
On February 23, the company's Board of Directors decided to convene an
extraordinary general meeting of shareholders on April 9, 2021 to approve the
delisting of the company's global depositary receipts on the London Stock
Exchange and Astana International Exchange, as well as to approve the
termination of the company's GDR program. The Board of Directors believed that
by reducing the number of markets on which securities are traded, and by
concentrating trading in shares on KASE, it would be possible to increase the
level of liquidity. The volume of secondary trading in GDRs on the LSE and AIX
was very low, which, according to the board of directors, limited the company's
ability to place additional shares. On April 9, the General Meeting of
Shareholders upheld the decision to terminate the Deposit Agreement and the GDR
program from June 14, 2021. Holders had a choice: to abandon their investment
in the company or exchange their GDRs for common shares.
Redemption of the company's share.
On February 26, Bloomberg published the news that Jysan Bank is considering the
possibility of acquiring a 75% stake in Kcell JSC from Kazakhtelecom JSC in
order to gain access to the 8 million subscriber base for further development
of its ecosystem. At that time, representatives of Kazakhtelecom JSC stated
that they were not considering plans to sell the company. On May 26,
Kazakhtelecom announced the settlement of the arbitration proceedings in the
London International Arbitration Court on claims related to certain guarantees
that arose back in 2018 with the purchase of a 75% stake in Kcell. On September
30, Kazakhtelecom's Board of Directors made a decision to sell 24% of Kcell
shares by selling to a wide range of investors at KASE, and on October 1,
Kazakhtelecom reduced its stake in Kcell from 75% to 51% by selling 48 million
shares of the latter at KASE. The total price of the transaction is estimated
at 55 billion tenge.
Dealing with debt obligations.
This year, Kcell has significantly optimized its debt burden. On January 27, the
company redeemed the Kcelb1 bond issue in the amount of 23 billion tenge. This
amount was partially offset by an increase in lines of credit in banks by 10
billion tenge: on April 1, Subsidiary JSC VTB Bank (Kazakhstan) increased a
line of credit by 1 billion tenge at 10.7%, on 20 May, SB Alfa-Bank JSC – by 7
billion tenge under 10.7%, June 3 - DB Bank of China in Kazakhstan JSC – by 2
billion tenge at 10.3%. Also, interest rates on existing bank loans were
reduced: on January 5 at SB Alfa-Bank JSC – from 11.2% to 10.7%, on May 26 at
Eurasian Development Bank – from 11.5% to 11.19%. In November, after
repurchasing a 25% stake, Jysan Bank opened a line of credit for Kcell for a
total of 60.5 billion tenge. In the same month, Kcell fully repaid loans from
Halyk Bank, Alfa Bank and Eurasian Development Bank for 40.5 billion tenge.
On April 14, Kcell signed an agreement with Nexign JSC on the implementation of
the Nexign Converged BSS billing platform. On September 1, Kcell, Jysan Bank
and the international payment system Mastercard announced the launch of a
unique joint project "OGO banking products in Kcell and activ mobile
applications". On December 14, Kcell announced the opening of the first 5G zone
in Turkestan in partnership with Ericsson
Financial results and dividends.
On March 4, the company published an audit report on consolidated financial
statements, and on April 25, the board of directors decided to distribute 100%
of the company's net income in the amount of 17.6 billion tenge as dividends,
which corresponds to 87.89 tenge per ordinary share or global depositary
receipt. According to the results of 9 months of 2021, the company's net profit
has already amounted to almost 25 billion tenge, exceeding the profit of the