ANALYSIS: In March of 2006 the share market was notable for significant price rise

/IRBIS, Assel Omarova, Andrey Tsalyuk, April 12, 06/ - In March of 2006 on Kazakhstan stock exchange (KASE) 548 deals were made in all sectors of the market (excluding repo-transactions sector) for a total of KZT9,873.6 m. or $76.8 m. at the current rate effective on deals making dates. The stated amount is 18.4% of monthly turnover of KASE corporate security market (in February of 2006 - 38.9%) and 0.9% from the exchange's whole monthly turnover (1.4%). Below are tables, which characterize KASE's market of equity instruments in March of 2006. Change of lists of shares, traded on KASE, in March of 2006 ----------------------------------------- Shares: Issuers: Category of ------------- ------------- admission number trend number trend ----------- ------ ----- ------ ----- A 49 0 30 0 B 38 0 30 0 ----------- ------ ----- ------ ----- A+B 87 0 60 0 ----------- ------ ----- ------ ----- N 6 0 6 0 ----------- ------ ----- ------ ----- TOTAL 93 0 64 0 ----------------------------------------- Notes: "A" - official "A" listing category; "B" - official "B" listing category; "A+B" - official list; by the end of the month, change for the month. Statistical characteristics of share market on KASE in March of 2006 --------------------------------------------------------------------------- Month: ------------------- Trend March February Mar. 2006 to Indicator 2006 2006 Feb. 2006 ---------------------------------------- -------- --------- ------------ Trade volume, th. USD 76,764.1 132,042.5 -41.9% Trade volume, m. KZT 9,873.6 17,326.9 -43.0% incl. on offerings, th. USD 0 3,094.2 Х incl. on offerings, m. KZT 0 407.4 Х inc. secondary market deals, th. USD 76,764.1 128,948.3 -40.5% incl. secondary market deals, m. KZT 9,873.6 16,919.5 -41.6% Number of deals 548 531 +3.2% incl. at offerings 0 2 Х Inc. on secondary market 548 529 +3.6% Number of instruments involved in deals 39 45 -13.3% Stake of nego deals (number), % 20.4 15.4 +5.0 pp Stake of nego deals (volume), % 60.4 68.3 -7.9 pp Pension assets participation, % gross 9.7 9.9 -0.2 pp Number of exchange's members, made deals 28 29 -3.4% Market concentration, %* 41.1 57.1 -16.0 pp --------------------------------------------------------------------------- * percentage from total share turnover, which falls to the stake of most tradable securities (their number is 5% from total number of names of shares, included in KASE's trade lists, is shown) Main indicators of exchange's share purchase and sale market in March of 2006 ---------------------------------------------------------------------------- Market Volume of Volume of capitalization, Index deals, deals,, Number of Date USD m. KASE_Shares th. USD m. KZT deals ---------- ------------------ ----------- --------- --------- --------- Feb 28, 06 20,468.5 1,114.23 3,399.4 443.1 24 Mar 1, 06 21,066.6 1,120.75 2,020.9 263.1 19 Mar 2, 06 21,996.6 1,187.40 474.3 61.7 15 Mar 3, 06 22,654.3 1,198.75 1,476.9 191.7 19 Mar 6, 06 23,085.8 1,220.49 1,903.9 246.7 20 Mar 7, 06 23,008.7 1,240.33 7,231.9 936.2 24 Mar 9, 06 22,654.3 1,185.49 233.6 30.3 18 Mar 10, 06 22,047.1 1,264.66 16,430.0 2,123.9 27 Mar 13, 06 21,956.1 1,204.02 67.5 8.7 6 Mar 14, 06 22,929.4 1,266.76 1,539.5 198.3 12 Mar 15, 06 23,087.4 1,263.70 487.0 62.6 13 Mar 16, 06 23,819.1 1,280.77 5,774.6 740.9 23 Mar 17, 06 22,903.1 1,244.55 6,143.8 786.4 38 Mar 20, 06 23,542.0 1,341.72 1,372.0 175.2 35 Mar 21, 06 23,648.9 1,433.73 2,933.1 373.7 41 Mar 23, 06 26,437.6 1,605.24 4,018.2 512.4 38 Mar 24, 06 26,583.8 1,533.92 1,968.7 251.4 24 Mar 27, 06 27,254.4 1,661.26 1,539.1 196.8 21 Mar 28, 06 27,770.7 1,689.78 5,126.6 656.8 40 Mar 29, 06 29,097.6 1,753.13 3,301.8 423.2 39 Mar 30, 06 29,532.7 1,586.46 6,262.6 804.4 38 Mar 31, 06 29,335.2 1,724.31 6,367.9 817.6 37 ---------- ------------------ ----------- --------- --------- --------- Trend +8,866.6 +610.08 +43.3% +54.75% ---------------------------------------------------------------------------- Summary data by the results of share trades on KASE in March of 2006 (purchase and sale, including primary offerings) ------------------------------------------------------------------------------ Volume of deals: Code Brief ---------------- Num- Market Price of Name of th. m. ber of share, change, security Issuer USD KZT deals % % -------- ------------------------------ -------- ------- ------ ------ ------- ASFI Astana-Finance JSC 10,690.3 1,374.0 18 13.9 +2.81 CCBN Bank CenterCredit JSC 7,646.5 984.8 53 10.0 +72.16 BTAS Bank TuranAlem JSC 7,052.7 911.4 15 9.2 +28.65 VTBN Valut-Tranzit-Bank JSC 6,127.0 786.3 23 8.0 -0.74 AZNO Aktobe oil equipment plant JSC 5,697.8 730.4 7 7.4 +3.25 TSBNp Tsesnabank JSC 5,640.8 730.6 10 7.4 -0.12 NFBN NEFTEBANK JSC 5,117.3 657.1 8 6.7 0 VTBNp Valut-Tranzit-Bank JSC 4,908.4 629.4 12 6.4 -0.88 KZZN KAZZINK JSC 4,818.8 616.2 95 6.3 +33.33 KKGBp Kazkommertsbank JSC 2,792.7 361.2 12 3.6 -1.32 ATFB ATFBank JSC 2,374.4 304.3 9 3.1 0 TEBN Temirbank JSC 1,923.7 246.9 54 2.5 -1.35 KZTK Kazakhtelecom JSC 1,754.7 225.9 25 2.3 -1.19 UTMK Ust-Kamenogorsk titanium- magnesium combine JSC 1,741.6 225.8 7 2.3 +11.94 TEBNp Temirbank JSC 1,366.9 174.6 2 1.8 -0.77 ATFBp8 ATFBank JSC 1,172.5 151.4 5 1.5 -19.14 VTZL Kazyuvelirprom JSC 1,025.5 131.4 1 1.3 -0.99 ORDBp Corporation Ordabasy JSC 823.1 106.7 1 1.1 -4.76 AMGZ CNPC-Aktobemunaygas JSC 616.1 79.2 38 0.8 +95.40 ZERD Zerde JSC 517.5 66.7 17 0.7 -38.46 KZTKp Kazakhtelecom JSC 442.2 57.0 12 0.6 -1.79 MMGZp Mangistaumunaigas JSC 412.1 52.9 5 0.5 -18.18 NRBNp6 Nurbank JSC 379.1 48.4 5 0.5 +45.56 CCBNp Bank CenterCredit JSC 361.2 46.2 12 0.5 +10.00 ASBN Alliance Bank JSC 296.7 38.2 20 0.4 +56.00 HSBK Halyk savings bank of Kazakhstan JSC 267.7 34.3 25 0.3 +17.76 CSBN BANK CASPIAN JSC 191.2 24.5 22 0.2 +0.10 ALKZ Kazakhstan Aluminium JSC 123.0 15.8 1 0.2 +451.82 NRBN Nurbank JSC 118.4 15.3 6 0.2 +18.31 KKGB Kazkommertsbank JSC 87.8 11.4 8 0.1 +88.52 ORNK Ornek-XXI JSC 60.9 7.9 2 0.1 +27.20 KZIS Company on foreign insurance Kazakhinstrakh JSC 36.7 4.8 3 0.05 +3.32 CSBNp BANK CASPIAN JSC 26.5 3.4 3 0.03 +9.95 TSBN Tsesnabank JSC 17.3 2.2 4 0.02 +5.09 HSBKp1 Halyk savings bank of Kazakhstan JSC 16.1 2.1 3 0.02 +2.35 ATFBp ATFBank JSC 12.2 1.6 1 0.02 -10.00 UTMKp Ust-Kamenogorsk titanium- magnesium combine JSC 8.2 1.1 1 0.01 -22.53 CHFM Chimfarm JSC 8.1 1.0 1 0.01 +22.20 TXBN TEXAKABANK JSC 0.2 0.03 1 <0.001 0 -------- ------------------------------ -------- ------- ------ ------ ------- TOTAL 39 76,673.9 9,862.1 547 100 ------------------------------------------------------------------------------ Comments: Securities were sorted in descending order based on the volumes of deals expressed in U.S. dollars. Lower-case letters in code of a security mean: "p" - preferred share; the rest - common share. "X" - change of price is not calculated, as this security got the first estimation on exchange in the analyzed period. The first spring month on the Kazakhstan share market occurred no less hot than February. According to the behavior of index KASE_Shares, rally in this segment will continue. The month change of index, indicated in the second table, corresponds to the growth speed at 645% APR. Out of 39 share titles, involved in deals on KASE during March, 21 titles were characterized by price rise, 15 - by fall, the rate of equity instruments of three titles (common shares of ATFBank JSC, NEFTEBANK JSC and TEXAKABANK JSC) remained unchanged. Index was moved upwards by usual favorites of the market. For example, cost of AMGZ in weighted average expression increased by 95.4%, which corresponds to the yield at 1,123.3% APR. KKGB potentially brought their holders 1,042.3% APR, CCBN - 849.6% APR, ASBN - 659.4% APR, KZZN - 392.4% APR, BTAS - 337.3% APR, NRBN - 215.6% APR, HSBK - 209.1% APR. Holders of preferred shares of ATFBank JSC (ATFBp8 и ATFBp), MMGZp, KZTKp, KKGBp were slightly unsuccessful. Among common shares TEBN, KZTK и VTBN were marked with fall. From the given information IRBIS analytics are inclined to make following conclusion. Indicators of shares cost increase in March seem more impressive than the fall. Mainly common shares are subject to the increase, whereas preferred shares are characterized by negative dynamics. This conclusion well stresses the specificity of Kazakhstan share market, whose primary driving force, as before, is the speculative interest. Shares are purchased with hope for a mark-up value, not with the desire to get guaranteed dividends. Due to this pattern, common shares of Valut-Tranzit-Bank JSC, ATFBank JSC fall out, which IRBIS specialists are inclined to connect with recently announced intention of the second bank to buy the first, and also with not yet confirmed rumours regarding this deal. The third conclusion concerns the volume of deals, which distinctly increased in the second half of the month both with market and nego deals. It is important that especially this period was characterized by the greatest speed of KASE_Shares index growth. It seems like the doubts, which were peculiar to brokers and their clients in the beginning and the middle of the month, were left behind. But what and whose money creates demand on the share market is a very interesting question. Judging by the information of the National Bank, on the Kazakhstan market appeared foreign investors, who sell dollar and offer gained in such a way tenge on deposits in banks. IRBIS analytics do not exclude that a part of this money is, nevertheless, used on the share market, thus creating additional demand. However, currently the more probable source of funds for a speculative game with equity instruments is the market of repo on KASE. According to the exchange statistics, in March the repo operations stake with CS, carried out by method of making nego deals, has notably increased. IRBIS specialists connect this occurrence directly with the growth of share market. And if this assumption is correct, that the increase of market value of majority of equity instruments more and more remind of the so-called "bubble". For speculators it will create a number of advantages, as the rate of shares may practically endlessly grow on minimal volumes. However, at that the risk level will increase in geometric series. The last will stay high until the main problem - the increase of real liquidness of shares via expansion free float- will not be solved on the market. In this question March somewhat added optimism, since some Kazakhstan banks declared the intention to significantly increase the authorized capital by means of offering new equity securities. As it is accepted in Kazakhstan, the basic offer volume will spread all over the market. But there is a hope that the number of available on KASE shares will, nevertheless, increase. On the whole, the results in March give an impression that the share market on KASE in the near future is directed to the further growth. But in quality manner the market practically has not changed during the month. [2006-04-12]