Astana International Exchange (“AIX”, “Exchange”) is pleased to announce that monthly trading in November 2020 has increased significantly up to $3.7 mln, versus $659k. in the same month last year.
In 2020, global capital markets have been impacted by the COVID-19 pandemic and resulting economic recession. Despite this, the appetite of international investors for Kazakhstan and Central Asia remained high throughout the year due to the decline in interest rates and the emergence of promising private companies ready to raise capital in foreign currency.
CEO of AIX, Tim Bennett, commented:
“The changes we have seen over the past 6 to 9 months have actually strengthened the AIX proposition for both global and domestic investors. We’ve seen interest rates decline globally and therefore there is a lot more interest in investing in equities. So, while the privatization program has understandably been deferred, there is still a high level of interest in investing in Kazakhstan.”
AIX progress as of December 2020
- Almost 80 securities listed, including shares and global depositary receipts, bonds, exchange-traded funds and notes.
- Successfully listed the shares/global depositary receipts of major issuers such as Kaspi.kz (IPO), Kazatomprom (SPO), Ferro Alloy and Kcell (cross-listings).
- Since 2018 the AIX Issuers raised over $321 mln of equity capital ($104.7 mln in 2020).
- $8.6 bln of debt capital listed on the AIX ($3.7 bln in 2020).
- 26 trading members, including brokers operating in Kazakhstan, as well as brokers from China, Russia and Europe.
- 98k accounts at AIX CSD
Expanding AIX ecosystem
In 2020 AIX welcomed new trading members who brought their expertise and strong investor relationships for the benefit of the Kazakhstan’s capital market. Among them: Sova Capital which provides a full range of investment banking services to institutional and corporate clients interested in investing in Emerging Markets including CIS countries; UK-based international financial services company ITI Capital; the leading Russian international investment bank VTB Capital has become a trading member of AIX.
Bringing on innovations
AIX launched four new exchange-traded notes (ETNs) in order to provide local retail investors with a broader range of investment options. There are now 9 ETNs listed which track various benchmark indexes, such as high yield US corporate bonds and high dividend companies. All of them can be traded not only via brokers, but also via Tabys mobile application. Tabys was developed to attract those smaller retail investors who are unfamiliar with the stock market and helps them to invest for their financial future.
In conjunction with BCC Invest JSC, AIX listed BCC Global Exchange Traded Notes linked to the performance of one of the largest domestic interval mutual funds – “CenterCredit-Valyutniy”.
The AIX has become the first exchange in the world which migrated its core trading infrastructure—the Nasdaq matching engine—onto Amazon Web Services (AWS). This transition enables AIX to enhance the performance of its trading services while delivering agility and scalability to its investor community. It also gives AIX flexibility to launch new products and services faster and more cost-efficiently for its securities market.
Providing opportunities to midcap companies
In July 2020, the AIX launched the Regional Equity Market Segment (REMS) to provide medium-sized businesses in Kazakhstan and Central Asia with better access to equity financing.
AIX has simplified the regulatory regime for companies with a free-float market capitalization not exceeding USD200 million and to allow a simplified prospectus based on one-year financials with no requirement to demonstrate revenue earning track record.
AIX CSD
In 2020 Thomas Murray, the global post-trade risk and custody specialists, assigned Astana International Exchange Central Securities Depository (AIX CSD) an overall risk assessment of ‘A’, which denotes a ‘Low Risk’.
Raiffeisenbank has become a Participant of the AIX CSD, thereby allowing international institutional investors to hold their assets at the AIX CSD under the bank’s custody.
Also, the AIX CSD opened a foreign nominee account with the Russian National Settlement Depository (NSD).
Remote Working
In March 2020, due to COVID-19 pandemic AIX took a number of measures in order to minimize the risks to the health of employees while at the same time ensuring smooth operations. Following the latest set of measures taken by Kazakh authorities in relation to the outbreak, AIX introduced a hybrid model of work, giving employees the option to choose a combination of remote and office-based work.
Most of the activities of the Exchange have gone from offline to online. The AIX has been able to switch investment forums and investor days to a webcast format that allows to reach a wider investor audience. Investors have welcomed the online option, as they get all the information they need about issuers, economic reviews and first-hand material on measures taken by the government quickly and efficiently. AIX continues to act as the link between current and potential issuers in Kazakhstan, government agencies, the regulator and the foreign investment community.
Reference:
AIX was formed in 2017 within the Astana International Financial Centre development framework. AIX shareholders are AIFC, Goldman Sachs, the Shanghai stock exchange, the silk Road Fund, and NASDAQ, which also provides the AIX trading platform. The exchange operates within a regulatory environment based on the principles of English Law, thus providing a reliable investment environment. The mission of AIX is to develop an active capital market in Kazakhstan and the region by providing clear and favorable conditions for attracting financing to private and public businesses. AIX develops special segments for mining companies as well as infrastructure projects under the Belt and Road initiative. More details: www.aix.kz
AIFC. The Astana International Financial Centre was created by the initiative of the First President of the Republic of Kazakhstan, Leader of the Nation, Nur-Sultan Nazarbayev as part of the “100 steps to implement five institutional reforms” national program. The Centre’s development strategy until 2025 was approved by the Management council of the AIFC during the council’s meeting on July 2, 2020. In accordance with the strategy, the vision of AIFC is in becoming the leading financial centre in the region that includes Central Asia, the Caucasus, EAEU countries, western China, Mongolia, and Eastern Europe. The mission of the AIFC is in assisting the sustainable and long term development of the region. As the head of state Tokayev noted, “AIFC, with its unique opportunities, can act as a universal platform that connects the countries in the region.” The strategic directions for the sustainable development of the AIFC include the development of a circular economy, financial technologies, and “digital financial centre.” www.aifc.kz
