Economic science/4. Investment activities and stock markets
Tussayeva A.K.
Associate professor of University NARXOZ, the
Republic of Kazakhstan
Investing in stocks of Kazakhstan issuers
An investment portfolio is a set of financial instruments for each investor.
Investments are very urgent for today, as the securitization of the financial
market is developing and the population draws attention to other investment
tools other than the bank’s deposit.
Investment in a deposit in Kazakhstan has a number of advantages in
comparison with the instruments of the stock market – there is no service charge, deposit insurance system up to 10 million
tenge, a convenient way of investing, as
well as a developed branch network, "soft"
conditions for withdrawing money before the due date. Despite the advantages of investing deposits, the only drawback is the
limited income, which today varies from 13-15% on deposits in national
currency.
Investors in Kazakhstan
are offered various shares of Kazakhstan
Stocks of the national companies will be sell on the stock exchange on
equal terms with other KASE (
Below are the companies whose shares are traded on the KASE and which
were participants in the "People's IPO" program.
The first proposed company is - KEGOC JSC (KEGK). The company has an
international Baa3 rating and has an upward trend after the IPO (picture 1).
For the current year, the book value of the stock was 1394 tenge
and exceeds the market value of the share by 1.92%.
The EPS index increased from 0.038 tenge (2015)
to 0.087 tenge (2016), the excess was 0.049 tenge.
The company's effectiveness is proved by its profitability indicators -
ROA, ROE, ROS. All indicators of profitability have a stable growth compared to
last year. The figure below shows the dynamics of the stock from IPO to today.
Figure 1. Trend of stocks of KEGOC [1]
As can be seen from
the figure, the share price has a stable growth. The growth of the share
compared to 2013 is 150%, compared to last year, 15%. These indicators prove that there is
always a demand for shares of this company.
The next company is KazTransOil JSC (KZTO). This company is engaged in oil
transportation. Despite the price of oil, the company is developing dynamically
and increasing working capital. Like the previous company, it has an
international Baa3 rating.
The book value of the
share increased from 1476 tenge (2015) to 1512 tenge (2016), i.е. The increase
in value was 2.43%. The EPS index was 0,115
tenge this year.
Figure 2. Trend of stocks
of KZTO [1]
We can see from the figure 2, the share price has a lot of trend. At first, it had flat trend and at the end
2013 year it rose sharply from 900 tenge to 1250 tenge. After it dropped and had downtrend and flat in all 2015 year. At the beginning last
year (2016 ) it has a stable growth.
Table 1 – Effectiveness of companies [1]
|
Companies |
ROA, % |
ROE, % |
||||
|
2015 |
2016 |
Rate of increase, % |
2015 |
2016 |
Rate of increase, % |
|
|
KEGK |
1,60 |
3,42 |
+1,82 |
2,73 |
6,17 |
+3,44 |
|
KZTO |
5,96 |
5,98 |
+0,02 |
7,48 |
7,57 |
+0,09 |
If we compare the company's data, then we can say that by the profitability
indicators "KEGOC" are exceeded.
The program of the people's IPO is held at the initiative of the
President to provide the opportunity for the Kazakhs to become co-owners of the
country's leading companies. During the program, they will be offered shares of
the largest, stable and promising state companies. Thus, the population is
given the opportunity to take part in the incomes of these enterprises, but
also, by attracting people to the stock market, to increase the investment
culture in the country, to give impetus to the development of the exchange and
the financial sector. Currently, there are all components for the successful
implementation of IPO in
IPO is a very promising tool for raising
capital. The main advantages of an IPO can be attributed, firstly, access to long-term
capital in the open market on much more favorable terms than resorting to
credit bank resources, private loans or venture capital. So, the government's
decision primarily placed shares of JSC KazTransOil and JSC KEGOC, as the most
reliable market players. Secondly, it will improve the current financial
condition of companies, increase the prestige and growth opportunities for
business promotion. In addition, the company receives an estimate of the
current market value, which is important when expanding the business through
mergers and acquisitions, diversifying assets and using shares as collateral
for obtaining a loan. Finally, IPO provides an opportunity to attract and
retain highly qualified staff and, in the first place, key managers.
References
1. www.kase.kz
2. Tussayeva A.K., Masakova S.S. Investment
direction of population in the