BAKU, Azerbaijan, September 2. Kazakhstan will
adopt a Capital Market Development Program through 2030 aimed at
creating a deeper, more liquid, and diversified capital market and
expanding access to long-term financing for businesses, the Agency
for Regulation and Development of the Financial Market said.
The main provisions and strategic directions of the program were
discussed during a roundtable in Almaty. The document was developed
by the Agency together with the National Bank of Kazakhstan and
market participants following an instruction from President
Kassym-Jomart Tokayev.
Representatives of the Agency, the National Bank, the Kazakhstan
Stock Exchange (KASE), the European Bank for Reconstruction and
Development (EBRD), the Association of Financiers of Kazakhstan,
the Unified Accumulative Pension Fund, market participants and
experts attended the event.
According to the agency, over the past five years, the
capitalization of Kazakhstan's stock market more than doubled from
19.1 trillion tenge ($41.65 billion) to 41.8 trillion tenge ($91.18
billion), with an average annual growth rate of 11%. The debt
securities market also nearly doubled, increasing from 32 trillion
tenge ($69.80 billion) to 58 trillion tenge ($126.52 billion),
while corporate debt reached 24 trillion tenge ($52.35
billion).
"The Agency, together with the National Bank, was instructed to
develop the Capital Market Development Program through 2030 and
prepare a new Law on the Capital Market. The implementation of
these initiatives is aimed at creating a modern architecture for
the stock market and establishing conditions for its further
development as one of the key sources of long-term financing for
the economy alongside bank lending. At the same time, a developed
securities market is an important factor in diversifying financing
sources, strengthening macroeconomic stability and increasing
investor confidence," Chairperson of the Agency Madina
Abylkassymova said.
The program envisions the creation of a deep, liquid and
diversified capital market that provides businesses with access to
long-term financing, households with a broad range of reliable
instruments for long-term savings, and the economy with an
effective mechanism for transforming domestic savings into
investment.
The program will focus on seven strategic areas comprising 35
initiatives.
One of the priorities will be strengthening the role of
institutional investors, including through improved approaches to
managing pension assets and expanding opportunities for financial
institutions to invest in domestic market instruments.
The program also envisages simplifying companies' access to the
stock market by accelerating and streamlining securities issuance
procedures, including through the transfer of registration to the
Central Securities Depository and the introduction of digital
processes.
More flexible listing and placement conditions for medium-sized
businesses are also being considered to reduce administrative and
regulatory barriers and expand the number of companies able to
raise financing through the capital market.
To improve liquidity in the secondary stock market, Kazakhstan
plans to establish a centralized securities lending mechanism. This
would allow institutional investors to make temporarily unused
securities available for market operations. Covered short selling
would also be permitted, while the role of market makers and
support for independent issuer research would be strengthened.
The program also places emphasis on capital market
infrastructure. One of the key steps will be connecting Kazakh
stocks to major international securities custody and settlement
systems. This is expected to make it easier for foreign investors
to trade Kazakh shares through familiar infrastructure, reduce
transaction costs and broaden the potential investor base.
"Particular attention will be paid to improving the quality of
corporate governance and protecting investors' rights. We plan to
increase the transparency of public companies, strengthen corporate
governance requirements and ensure more effective protection of
minority investors' rights. This is particularly important for
building long-term confidence in the market and increasing the
participation of retail investors," Abylkassymova said.
Kazakhstan also plans to update its model for capital market
regulation and supervision. The Agency is developing a risk-based
supervisory model focused not only on compliance with formal
requirements but also on assessing actual risks and market
participants' conduct.
The updated model was tested on a pilot basis this year, with
increased emphasis on investor protection and corporate governance.
It is planned to be extended across the entire market.
The role of KASE will also be strengthened, with greater
independence for its regulatory functions. The exchange already
performs a number of functions related to admitting participants
and issuers to trading, information disclosure and monitoring
trading activity.
The next step will be to establish an independent regulatory
committee within KASE. The committee will make decisions
independently of the exchange's commercial management, while
information on identified signs of market manipulation will be
promptly transferred to the Agency.
"The outlined areas cover the key elements of market development
- from expanding demand and attracting new issuers to developing
infrastructure, strengthening investor protection and improving
supervision," Abylkassymova said.
A new Law on the Capital Market is being developed in parallel
with the program. The legislation will consolidate and systematize
existing regulations and establish an integrated regulatory
framework for the market.
The program and the new law are expected to create a modern
legislative and institutional foundation for further development of
Kazakhstan's securities market, expand opportunities for businesses
to raise financing and create new investment opportunities.
