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. International agenda. 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. Capital structure. 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". Capital structure. 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 KASE. Upgrading ratings. 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. Kazakhtelecom JSC 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 JSC 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. Capital expenditures. 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 JSC 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 company's publicity. 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 JSC 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. Joint projects. 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 last year. [2021-12-31]