Head of KASE's Council speaks for toughening of control for investing APF's assets into securities

/INTERFAX-KAZAKHSTAN, Almaty, May 27, 05/ - Saduakas Mameshtegi Chairman of the Council of Kazakhstan stock exchange Inc. (KASE) considers it necessary to introduce the system of Accumulative pension funds (APF) assets risk-management. "Absence of proper risk-management in pension funds promotes to increase of unfair issuers on the market. Supervision for this segment must be more though because of more frequent facts of corruption fraud on securities market", - Mameshtegi said. He says during the council's meetings "facts directly evidencing that issuers cheated exchange's community were discussed several times". "There are such the companies, and I know that pension funds still buy their securities. In particular, at present any manager of management company, having made a deal (having invested APF's assets into a company's securities. - "IF-K"), may retire in one year, and bond may have ten-year duration, and it can live until it's delisted or redeemed", - he said. Mameshtegi says investing of APF assets into securities of "unfair issuers" in the future "may seriously" influence upon incomes of both pension funds as well as depositors. So, as he says, it's necessary to improve business-system and introduce "exact responsibility for quality of invested assets". Mameshtegi positively estimates introduced by financial supervision agency measure on obligatory following by issuers entering KASE's listing, corporate governance principles, which provide "revelation of more information about the issuer, that will let increase investors' trust in them, that, as a result, will promote to growth of authority, liquidity and development of the stock market". Besides, Mameshtegi speaks for giving republic's commercial banks the possibility to make investments not only into bonds of "А" listing, but "B" as well. "It's not logical and strange that banks are not allowed to invest assets into securities of "B" listing, because precisely banks have a big experience of working with credit risks and have proper safety system", - he said. He says this precisely limit "seriously interrupts" coming of Kazakhstan middle companies to stock market, that, in his opinion, is concerned with absence of potential buyers in the person of banking structures. "If this limitation is removed, much bigger number of interesting issuers can be formed in the republic", - he marked. Mameshtegi says it's necessary to remove this limitation as soon as possible in the context of creation of the regional financial center in Almaty. "I think it's logical to take into account the fact that financial center is being created in Almaty, where issuers from other countries will come. Not all securities will be in "A" listing. Who will then buy risks of new issuers, if there is no purchasing base?" - he said. [2005-05-27]