Akhmetkali T.A.

the teacher of chair of finance and banking

of  Kostanay  state university to them A. Baytursynov

 

PROBLEMS AND PROSPECTS OF DEVELOPMENT
SECURITIES MARKET IN KAZAKHSTAN

 

With the transition of the Republic of Kazakhstan to the market relations and foreign economic openness has received its development and the market of financial instruments, including securities market. Currently the financial market of Kazakhstan is: dynamically growing financial sector; large institutional investors; active bond market; emerging OTC market of foreign exchange derivatives. Lack of financial instruments; weak activity and the lack of market participants indicate its underdevelopment [1].

Until recently, one of the main problems, hindering the development of the securities market in Kazakhstan, was an underdeveloped legislative base. In particular, the legislation does not fully disclose such issues of functioning of the securities market, as the protection of the rights and interests of investors, the establishment and activities of managing investment funds, emission and circulation of derivatives and other concepts. The main reason that negatively influenced the development of Kazakhstan securities market, has been the global financial crisis in emerging markets, in which foreign  investors began an accelerated withdrawal from Kazakhstan of their capital. The value of the securities market is such that it is incorrect operation creates flaws in the economic process. Therefore, all participants of the market have a direct interest in the market is visited by the liberator is well organized. At the moment Kazakhstan has the most developed stock market in Central Asia, but due to the existence of  competitors  of Russian Federation and people's Republic of China further strengthening and expansion of the Kazakh platform is somewhat difficult.

At the moment in Kazakhstan formed quite an effective system of state regulation of the stock market, allowing to provide effective protection of rights and legitimate interests of investors in General, when run on the planned activities in Kazakhstan will be able to create all necessary conditions for development of securities market as the regulator of all market relations in mechanism mobilization of available financial resources [2].

Historically, Kazakhstan has developed banking model of the financial market, stock market allotted a secondary role. As a result, the banking sector received a dominant influence to ensure the needs of the real sector of financial resources. Real sector financing through the stock market was not able to receive adequate development. To understand the reason of low efficiency of the stock market in providing the corporate sector financial resources, it is necessary to consider the key factors determining the supply and demand for securities. These factors are interconnected in many ways.

The offer on the securities market is formed by the issuers. Key factors for issuers in the issue of the securities issue are as follows:

a) the need for tools (profitability of projects);

b) the cost of borrowing. It so happened that for a large business in Kazakhstan the most preferred is Bank lending, while medium and small businesses are not considering the stock market because of the high cost of borrowing fear transparency and other factors. The lack of a broad spectrum of attractive from the investment point of securities provides a low demand for the securities.

As is known, the demand for securities forms investors. Key factors in the investment decisions of investors is an investment return and risk. Low liquidity of corporate securities and the lack of them is the key problem impeding the development of the investor base in Kazakhstan. In addition, the development of demand impeded by the low financial literacy, legal restrictions [3].

Today the key issues of the Kazakhstani securities market are the following

1. The main problem arising from patterns of transactions at the Kazakhstan stock exchange, is the deficit of financial instruments, including financial instruments to institutional investors, i.e. with certain reliability, because, for example, there is a prohibition of the authorized body on investment funds of banks and pension assets in securities listed and Unlisted securities.

2. Another problem of the stock market development, which is directly connected with the activities of issuers, is the introduction of corporate management in companies and the adoption of international financial reporting standards.

 3. Constraining factors in the development of the securities market in the Republic of Kazakhstan is the lack of an effective system of mechanism of protection of rights and interests of investors. Economic  and lack accessible to the entire population of information about issuers [4].

As is known, the regulatory component of the stock market presents the regulatory framework and market regulations. Kazakhstan today created the necessary legal framework for the functioning of the securities market and defined its main institutions in the person of the stock exchange, the Central Depository and other professional participants. Continuing the improvement of legislation in the field of development and improvement of financial instruments of prudential standards and investment rules for institutional investors, corporate governance and protection of minority investors, the development of forms of collective investment and engagement on the securities market as of investors-physical persons [5].

At the same time, in the Republic there is a big work on development and improvement of the Kazakhstan securities market. Main tasks are: strengthening of the national stock market; creation and functioning of effective system of investment funds; the development of the insurance sector of the market and the mortgage, widening the range of financial instruments; active integration into the world economic system. To fill the market of Kazakhstan liquid securities introduced a simplified procedure of registration of prospectuses of securities of companies with high international rating. An important step in the development of the securities market has been the introduction of the Institute of investment banking, which allows to carry out certain types of banking operations provided for their implementation through activities on the securities market. All permitted conditions of transactions on the securities market in Kazakhstan allows the serious financial crisis, with negative effects on the real sector of the economy to maintain certain levels of capital, which is very important for the survival of the securities market in crisis conditions [2]. Feature of the domestic securities market is the imbalance in the level of development of its constituent elements. At considerable growth of volumes of crediting of the real sector of the economy at the expense of funds of the banking sector, in contrast to the low use of economic entities mechanisms of the domestic securities market and, thus, the mobilization of institutional investors in the face of accumulative pension funds, insurance companies and mutual investment funds. A significant share of the domestic savings in the form of pension assets and insurance organizations are used for financing of the banking sector, and, therefore, indirectly the real economy. The equity securities market is not involved in the financing of investment projects and does not reflect the market value of the Kazakhstan companies.

According to experts, development of securities market of Kazakhstan should start with the Foundation, that is to determine the position of the National Bank of Kazakhstan regarding the Kazakhstani market of government bonds. Having analyzed the state of the securities market in Kazakhstan, the experts came to the conclusion that for the last five years with no evidence of any development of the securities market. The main problem is the high cost of government borrowing. The second, much more disturbing: the capital market in our country is not plays its most important role is to send a signal about the state of health of the economy to the outside world. Fluctuations in the Dow Jones index or NASDAQ almost always reflect what's happening in the economic life of the country changes. But these indicators are quite unstable, «as an enormous influence on them are speculators, as well as the psychology of the market, which can be compared in many respects with the psychology of the crowd - exposure irrational fears, the rapid spread of panic. The lack of a broad spectrum of attractive from the investment point of securities provides a low demand for the securities. As is known, the demand for securities form the investors. Key factors in the investment decisions of investors is an investment return and risk. Low liquidity of the corporate securities (and hence high risk) and the lack of them is the key problem impeding the development of the investor base in Kazakhstan. In addition, the development of demand impeded by the low financial literacy, legal restrictions.

 

Literature:

1. Калимуллина Р.И. // Проблемы развития рынка ценных бумаг в Республике Казахстан в процессе функционирования финансового рынка, АльПари №1, 2010 г.

2. Мусин Т. // Проблемы и перспективы развития рынка ценных бумаг // Рынок ценных бумаг №8, 2012 г.

3. Сейсенбаев Д. // Почему в Казахстане нет развитого рынка ценных бумаг // Рынок ценных бумаг №3, 2012 г.

4. Садыкова М.Ж. // проблемы и перспективы развития рынка ценных бумаг в Республике Казахстан // Қаржыаражат №6, 2007 г.

5. Искаков У.М. // Современные тенденции развития рынка ценных бумаг Казахстана // Финансовый менеджмент №1, 2008 г.