ANNUAL REPORT Central Securities Depository JSC Almaty

Transcription

1 ANNUAL REPORT 2011 Central Securities Depository JSC Almaty

2 CONTENT GLOSSARY... 3 PROCEDURAL EXPLANATION... 5 MESSAGE FROM THE PRESIDENT... 6 THE MAIN EVENTS OF PROFESSIONAL ACTIVITIES... 7 RISK MANAGEMENT... 8 MANAGEMENT OF THE CENTRAL SECURITIES DEPOSITORY... 9 INTERNATIONAL ACTIVITIES RESULTS OF FINANCIAL AND ECONOMIC ACTIVITIES Income Expenses DEPOSITORY ACTIVITIES CLIENTS AND OTHER SIMILAR PERSONS PERSONAL ACCOUNTS AND SUBACCOUNTS NOMINAL HOLDING General information Government securities Corporate securities State-owned block of shares SECURITIES HOLDERS REGISTERED TRANSACTIONS PRIMARY SECURITIES MARKET SECONDARY SECURITIES MARKET General information Government securities Corporate securities State-owned block of shares PLEDGE OF RIGHTS FOR SECURITIES TRANSFER OF FINANCIAL INSTRUMENTS INTO NOMINAL HOLDING AND WITHDRAWAL OF FINANCIAL INSTRUMENTS FROM NOMINAL HOLDING CORPORATE ACTIONS EXECUTION OF CERTAIN TYPES OF BANKING OPERATIONS ACTIVITIES ON USPA MAINTENANCE ACTIVITIES ON ALLOCATION OF INTERNATIONAL IDENTIFICATION NUMBERS FOR SECURITIES AND OTHER FINANCIAL INSTRUMENTS ACTUAL MATERIALS SHARES AND SHAREHOLDERS CLIENTS AND EQUAL PERSONS INCOME AND EXPENSES DEPOSITORY ACTIVITIES Nominal holding Securities Holders Registered transactions Primary securities market Secondary securities market Transfer of financial instruments into nominal holding and withdrawal of financial instruments from nominal holding MONEY TRANSFERS USPA MAINTENANCE

3 GLOSSARY The following abbreviations, contractions and icons are used in the text: ANNA KACD KASE JSC FSA AECSD GTO state-owned block of shares or government securities or SBS GS SB USPA CJSC RNA CFI ISIN Committee IEA CIS MAOKAM MEIKAM MEKKAM МЕОКАМ MEUJKAM MEUKAM mln bln ISMT MUIKAM municipal securities National Bank or NB Association of National Numbering Agencies (Ассоциация национальных нумерующих агентств) Central Securities Depository JSC Kazakhstan Stock Exchange JSC Joint-Stock Company Agency of the Republic of Kazakhstan on regulation and supervision of financial market and financial organizations Association of Eurasian Central Securities Depository government treasury obligations of the Republic of Kazakhstan shares owned by government government issue securities issued in accordance with legislation of the Republic of Kazakhstan state-owned block of shares government securities subsidiary bank unified system of personal accounts Closed Joint-Stock Company Replacing Numbering Agency International code of financial instruments (Classification of Financial Instruments), allocated in accordance with ISO International Securities Identification Number, allocated in accordance with ISO 6166 Committee for Control and Supervision of the Financial Market and Financial Organizations of the National Bank of the Republic of Kazakhstan International Exchange Associations, Commonwealth of Independent States government special medium-term treasury obligations of the Ministry of Finance of the Republic of Kazakhstan (with two and three years circulation term) (abbreviation of securities title is in Kazakh language) government index treasury obligations of the Ministry of Finance of the Republic of Kazakhstan (with three months and over circulation term) (abbreviation of securities title is in Kazakh language) government short-term treasury obligations of the Ministry of Finance of the Republic of Kazakhstan (with the circulation term up to one year inclusive) (abbreviation of securities title is in Kazakh language) government medium-term treasury obligations of the Ministry of Finance of the Republic of Kazakhstan (with the circulation term over one up to five years inclusive) (abbreviation of securities title is in Kazakh language) government long-term saving treasury obligations of the Ministry of Finance of the Republic of Kazakhstan (with over five years circulation term), placed with Pension Savings Funds (abbreviation of securities title is in Kazakh language) government long-term treasury obligations of the Ministry of Finance of the Republic of Kazakhstan (with over five years circulation term) (abbreviation of securities title is in Kazakh language) million billion Interbank System of Money Transfer operating on the basis of Kazakhstan Interbank Settlement Center of the National Bank of the Republic of Kazakhstan government long-term indexed treasury obligations of the Ministry of Finance of the Republic of Kazakhstan (with over five years circulation term) (abbreviation of securities title is in Kazakh language) securities issued by local executive bodies of the Republic of Kazakhstan National Bank of the Republic of Kazakhstan 3

4 corporate securities nonresident corporate securities that do not belong to government nonresident natural person or legal entity NIN National identification number of security allocated in accordance with the laws of the Republic of Kazakhstan nominal holding nominal holding of Central Securities Depository JSC NSD Non-banking credit entity National Settlement Depository CJSC (Russian Federation) OJSC Open Joint-Stock Company UIF Unit investment fund resident natural person, who is the citizen of the Republic of Kazakhstan, as well as legal entity incorporated and registered in the Republic of Kazakhstan in accordance with the laws of the Republic of Kazakhstan register system security holders register system Board of Directors Board of Directors of Central Securities Depository JSC ISO 6166 standard International standard "Securities and related financial instruments International securities identification numbering system (ISIN)" ISO standard International standard "Securities and related financial instruments Classification of Financial Instruments (CFI code)" ISO standard International standard "Society security Guideline for incident preparedness and operational continuity management" ISO standard International standard "Information Security Management System" SAS 70 standard Auditing standard "Statement on Auditing Standards (SAS) No. 70, Service Organizations" LLP Limited Liability Partnership trln trillion ths. thousand the Central Central Securities Depository JSC Securities Depository 4

5 PROCEDURAL EXPLANATION To show the amount of financial instruments, which are in nominal holding of the Central Securities Depository, the par value of debt securities is used in this Report, as well as the nominal value of equity financial instruments determined by the Central Securities Depository in accordance with its internal document "Regulation on Tariffs and Fees". The Central Securities Depository would like to draw special attention of readers of this Report to the fact that the amount of financial instruments shown in this Report, which are in nominal holding of the Central Securities Depository, may not be used for any purpose other than specified in this and other Annual reports of the Central Securities Depository. 5

6 MESSAGE FROM THE PRESIDENT Dear shareholders! For an accounting period the Central Securities Depository further integrated into the international securities settlement system and introduced new technologies of registering transactions entered into by clients of the Central Securities Depository. To further integrate into the international securities settlement system the Central Securities Depository introduced settlements of trans-boundary transactions according to "delivery versus payment". The Central Securities Depository together with KASE in 2011 launched system of registering transactions with financial instruments. In this regard it is required to fully collateralize transactions entered into on the regulated securities market. In addition the Central Securities Depository developed financial instruments borrowing conception as well as amendments to the legislation of the Republic of Kazakhstan that are necessary for it. Having done above mentioned works the Central Securities Depository continues to grow in terms of application of the world best expertise and international standards and further does its best to fulfill tasks it assigned. President of Central Securities Depository JSC Bakhytzhan Kapyshev 6

7 THE MAIN EVENTS OF 2011 Professional activities One of the most high-profile events that made a big impact on the Central Securities Depository and all participants of securities market was introduction of requirement to fully collateralize transactions entered into on the regulated securities market. During the first half of 2011 the Central Securities Depository developed and agreed with professional participants of securities market and Committee Rules of Execution of Depository Activities in new version and Rules of Execution of Certain Types of Banking Operations 1 that establish requirements to fully collateralize transactions entered into on the regulated securities market and settlement procedure for trans-boundary transactions according to "delivery versus payment". These documents became effective from September 05, 2011 and we began to agree making settlement of fully collateralized transactions entered into on the regulated securities market with KASE on September 12, In order to explain clients the settlement procedure for fully collateralized transactions entered into on the regulated securities market the Central Securities Depository held free of charge trainings on "Amendments to the Code of Rules and other internal documents of the Central Securities Depository JSC" that will become effective from September 05, In the second half of 2011 the Central Securities Depository taking into expertise of its foreign partners and colleagues in financial instruments borrowing and law and distinguishing features of the securities market of the Republic of Kazakhstan developed draft document that includes conceptions of amendments to the legislation of the Republic of Kazakhstan and the Code of Rules of the Central Securities Depository needed to introduce financial instruments borrowing. The draft document was sent to clients of the Central Securities Depository, KASE and Financial Institutions' Association of Kazakhstan. 1 This document replaced active Rules of Opening, Maintaining and Closing Current Accounts and Rules of Opening, Maintaining and Closing Correspondent Accounts. 7

8 Risk management In 2011 the Central Securities Depository has taken significant efforts to improve risk management. Among other things, we developed documents detailing procedures for managing risk inherent to the activities of the Central Securities Depository, documents to upgrade internal control system and procedures specifying compliance control procedure, regular internal control from the Board of Directors of the Central Securities Depository. At the same time in order to enhance risk management efficiency in each structural subdivision of the Central Securities Depository a risk coordinator was appointed, a single database of show of risks was launched. Along with it to assess independently risk management methods and improve services provided during 2011 the Central Securities Depository got prepared to make gap analysis2 and audit in order to get international rating from Thomas Murray. The Central Securities Depository pays a special attention to hold its operation on an ongoing basis and allocates significant resources for this purpose. Within the framework of the work done by the Central Securities Depository and KASE in 2005 it was decided to establish a general backup centre and it is planned to bring it into operation in To hold its operation on an ongoing basis the Central Securities Depository regularly makes tests to reveal possibilities of timely activation of backup centre and effective reaction to the various incidents. In 2012 the Central Securities Depository will purchase respective consulting services and creating an entire system to manage an ongoing operation matching international standards. In 2011 we finished to fulfill recommendations presented in early 2011 by Ernst & Young- Consulting Services LLP when it made technical audit by some standards, two of them were international standardization, namely ISO and ISO In accordance with recommendations presented by Ernst & Young-Consulting Services LLP the Central Securities Depository optimized its activities, namely changed and automated documentation procedure and controlled documents execution, introduced procedures that allow to document and monitor changes made in the information systems, as well as procedures to provide information and technical safety. In October 2011 Deloitte LLP started to make an additional technical audit to check security of the automated information system of the Central Securities Depository and matching of automated information system of the Central Securities Depository with growing demand of the participants of the securities market of the Republic of Kazakhstan. 2 Gap analysis is an analysis of the Central Securities Depository activities by 40 factors of six types of the risk and their comparison with the best market indicators. Thus gap analysis allows to know how far the indicators of the Central Securities Depository in terms of different risk factors differ from the best market indicators. 8

9 Management of the Central Securities Depository For an accounting period the annual shareholder's meeting of the Central Securities Depository was held. Besides 10 meetings of the Central Securities Depository were held which scrutinized 100 issues (documents), including (Fig 1): 17 documents regulating a professional activity of the Central Securities Depository; 21 documents regulating an internal control of the Central Securities Depository; 10 reporting documents, eight reports, four plans and two references of the Management of the Central Securities Depository; one plan and one report of internal auditor of the Central Securities Depository; Figure 1. Main groups of issues considered by KACD Board of Directors in 2011 two reports of external auditor; eight issues concerning preparation to the annual meeting of KACD five issues concerning activities of LLP RTSC; five documents regulating financial and economic activities; 25 different issues. Since 2009 the Committee of the Board of Directors on strategy within the Board of Directors has been acting and since the Committee of the Board of Directors on audit. The purpose of their activity is in-depth study of the separate spheres of the KACD's activity and consulting the Board of Directors on these issues. To fulfill its functions completely and ensure compliance of the structural subdivisions of the Central Securities Depository with procedural requirement that guarantee exercise rights and interests of shareholders the Central Securities Depository introduced a position of corporate secretary in % 19% 38% 28% KACD documents regulating professional activities KACD documents regulating internal control system Plans/reports/speaches/references/conclusions of KACd Management and auditors Other 9

10 International activities In accounting period the Central Securities Depository continued international cooperation with international organizations, foreign depositories and associations. On December 9, 2011 in Jordan an extraordinary meeting of ANNA was held at which the Central Securities Depository became a member of this organization. It allows the Central Securities Depository to take a full part in work of this organization and in its working and target groups. For reference: pursuant to the message of the Central Securities Depository the Board of Directors of ANNA in Hong Kong on July 21-22, 2011 decided to assign functions of ANA to the Republic of Kazakhstan NSD. Before functions of ANA were fulfilled by WM Datenservice (legal entity of the Federal Republic of Germany). Pursuant to the regulatory documents of ANNA if there is a case when the Central Securities Depository cannot fulfill all its functions of the national numbering agency these functions may be assigned to the ANA. The major step in expanding correspondent networks of the Central Securities Depository we opened an account of nominal holding in the international central securities depositories Euroclear Bank SA/NV. During 2011 the Management and employees of the Central Securities Depository attended the following events of international bodies and organizations on issues concerning securities market that enables to exchange expertise with foreign colleagues: 1) VII Summit of Clearstream Banking, S.A. for extended Europe (Split, Croatia); 2) Working Meeting on "Global IT problems of exchange sector" and seminar "FTN Monitor Technological platform for integration of financial markets of CIS countries " organized by IAEs of CIS (International Association of Exchanges of the Commonwealth of Independent States countries) and Ukrainian Interbank Exchange as well as meeting of Revision Commission of the IAEs of CIS (Kiev, Ukraine); 3) Working Meeting on "Possibilities of settlement on DVP terms in tenge to account opened with NSD in Central Securities Depository (Moscow, the Russian Federation); 4) 13 th Asia-Pacific Central Securities Depository Group Cross-Training Seminar (Ulan-Bator, Mongolia); 5) I International Joint Conference of AECSD and IEAs of CIS on "Global Possibilities of Local Markets: infrastructure and regulating" (VIII International Conference of AECSD and III International Conference of IEAs of CIS) (Erevan, the Republic of Armenia); 6) Seminar to study experience of international central securities depository Clearstream Banking, S.A. (Luxembourg); 7) Seminar and Extraordinary General Meeting of ANNA (Amman, Jordan); 8) Meeting of Revision Commission of the IAEs of CIS (Kishinev, Moldavia). 10

11 Results of Financial and Economic Activities Thanks to its activities in 2011 the Central Securities Depository received a profit in the amount of KZT mln, showing the increase of KZT mln (29.59 %) as compared to the previous year. Income Total amount of the Central Securities Depository s income received in 2011 made KZT mln, showing the increase of KZT 67.2 mln (8.05 %) as compared to 2010 (Figure 2). Principal source of the Central Securities Depository s income in 2011 was depository activities related services. The indicated income in 2011 amounted mln.tenge and increased by KZT mln (13.23 %). The percentage of the above income in the total amount of the Central Securities Depository s income in 2011 made %, that is 4.34% more year on year. Increase of income from depository activities is related to the increased of financial instruments in nominal holding. Operational income received by the Central Securities Depository from maintaining the Unified System of Personal Accounts in 2011 amounted KZT mln and decreased as Figure 2. Dynamics of KACD income and expenses for KZT, mln compared to 2010 by KZT 2.97 mln (20.63%). The shares of this income in the total amount of the Central Securities Depository s income in 2011 made 1.27 %, that is 0.45% less year on year. Decrease of income from maintaining the Unified System of Personal Accounts is related to the decreased registrars' instructions received by the Central Securities Depository in the third and forth quarter of Other operational income of the Central Securities Depository in 2011 decreased by KZT 0.38 mln as compared to Other operational incomes includes incomes from providing payment agent's services, maintaining bank accounts, setting and supporting automated work places, organizing trainings, as well as incomes from providing clients with services. Other income of the Central Securities Depository in 2011 decreased by KZT mln as compared to The share of above income in 2011 decreased from 7.16% in 2010 to 3.36% in Other income reflects earnings received from investing the Central Securities Depository's own assets as well as share of the Central Securities Depository's profit in RTSC LLP. In 2011 as compared to 2010 income from investing own assets increased by KZT 5.38 mln (22.04%) due to increase of amount of investment portfolio of the Central Securities Depository and its return. The Central Securities Depository's profit in the share of the in RTSC LLP decreased by KZT mln and that is because there is no income recognized in 2010 from recover of the book value of RTSC LLP's assets in its income Income Expenses

12 Expenses Total amount of expenses of the Central Securities Depository in 2011 made KZT mln, and showed the increase of KZT mln (43.84 %) as compared to 2010 (Figure 2). In the Central Securities Depository s expense pattern for 2011 the major share falls on personnel costs, which increased in 2011 as compared to 2010 by KZT mln (41.05 %). Share of these expenses in 2011 made %, while in 2010 it equaled to %. Increase of personnel costs is associated with the salary growth and increase in the number of personnel of the Central Securities Depository. Expenses for paying accounting company's services in 2011 increased twice more- by KZT mln. The expenses for paying international depositories' services increased due to huge of financial instruments on the account of the Central Securities Depository in the international depositories as well as increasing number of cased and huge of payment of services of depository receipts issuers. The share of the above mentioned expenses in the total expenses of the Central Securities Depository increased from 13.37% in 2010 to % in Other operational expenses of the Central Securities Depository in 2011 increased by KZT 20.3 mln (16.47 %). The share of these expenses decreased from % in 2010 to 23.83% in Other expenses of the Central Securities Depository in 2011 increased by KZT 0.09% mln (26.47 %). The share of other expenses decreased from 0.08 % in 2010 to 0.07 % in

13 DEPOSITORY ACTIVITIES Clients and other similar persons In accordance with the Law of the Republic of Kazakhstan "On securities market" clients of the Central Securities Depository shall be professional participants of the securities market, who are nominal holders of securities, as well as foreign depositories and custodians. According to the Rules of Execution of Depository Activities of the Central Securities Depository personal accounts shall be opened with the Central Securities Depository to the clients and the following legal entities: 1) National Bank; 2) those licensed by the authorized body to carry out dealer activities in the securities market; 3) those carrying out dealer activities without being licensed by the authorized body in accordance with the legislative acts of the Republic of Kazakhstan. Interaction of the Central Securities Depository with clients and entities entitled to open personal account with the Central Securities Depository (further "Clients"), shall be carried out in accordance with the law of the Republic of Kazakhstan, the Code of Rules of Central Securities Depository JSC and contract signed for nominal holding. As of January 01, 2012 number of legal entities that signed contracts for nominal holding with the Central Securities Depository was 73, including 2 legal entities that signed the above contract in Six deposit contracts with clients have been terminated over the fiscal year. (Complete list of entities that signed deposit contracts with the Central Securities Depository as of 01 day of a month is published on the official the Central Securities Depository Internet site: Personal accounts and subaccounts Total number of clients accounts opened with the Central Securities Depository was 71 as of January 1, Total number of subaccounts opened within the clients accounts with the Central Securities Depository increased by 118 compared to the previous year and made 12,371 subaccounts, including 73 subaccounts opened in the name of clients of the Central Securities Depository and 12,298 subaccounts opened in the name of clients customers. 13

14 Nominal holding General information Total of financial instruments in nominal holding as of January 01, 2012 made KZT trln, and showed the increase of KZT 0.3 trln (2.06 %) as compared to the previous year. Volume of government securities in nominal holding as of January 01, 2012 made KZT 2.61 trln or % of total of financial instruments in nominal holding and showed the increase of 0.50 % as compared to the previous year. Total of corporate securities in nominal holding as of January 01, 2012 made KZT 4.24 trln or % of total of financial instruments in nominal holding and showed the decrease of 4.61 % as compared to the previous year. State-owned block of shares are also in nominal holding. State-owned block of shares are registered on the personal accounts of clients entrusted in accordance with the law of the Republic of Kazakhstan with a task to organize and maintain share register thereby carrying out nominal holding of shares owned by the government and government organizations. These clients in their turn being professional participants of securities market are bound in accordance with provisions of law of the Republic of Kazakhstan "On Securities Market" to register financial instruments transferred to them for nominal holding on personal accounts with the Central Securities Depository. As of January 01, 2012 Figure 4. Dynamics of strcture and of financial instruments in nominal holding divided by months in 2011 KZT, bln SBS CS GS Figure 3. Dynamics of structure and of financial instruments in the nominal holding for KZT,bln SBS GS CS of state-owned block of shares in nominal holding made KZT 7.45 trln or % of total of financial instruments in nominal holding and showed the increase of 5.12 % as compared to the previous indicator (Fig. 3). In 2011 average annual of financial instruments in nominal holding made KZT trln and showed the increase of KZT 0.66 trln as compared to In average during the year the of financial instruments in nominal holding showed monthly increase of KZT 0.04 trln or 0.29 % (Fig. 4) January February March April May June July August September October November December 14

15 As of January 01, 2012, the nominal holding of the Central Securities Depository included: 392 issues of ordinary shares including those of non-residents (showing the increase of six issues as compared to January 01, 2011); 45 issues of preference shares (showing the decrease of 3 issues as compared to January 01, 2011); 248 issues of corporate bonds (showing the decrease of 14 issues as compared to January 01, 2011); 168 issues of government securities issued by the Ministry of Finance of the Republic of Kazakhstan (showing the increase of 23 issues as compared to January 01, 2011); 17 issues of short-terms notes of the National Bank (showing the increase of 1 issue as compared to January 01, 2011); Corporate bonds issued in compliance with the law of other states other than Kazakhstan, 69 issues (the decrease of 1 issue as compared to January 01, 2011); Government bonds issued in compliance with the law of other states other than Kazakhstan, 2 issues (showing the same rate of issue as compared to January 01, 2011); Municipal bonds of 1 issue (showing the same rate of issue as compared to January 01, 2011); 25 issues of units by the unit investment funds (showing the same rate of issue as compared to January 01, 2010). As of January 1, 2012 the Central Securities Depository had nominal holding accounts with the following foreign depositories: Clearstream Banking, S.A.; Euroclear Bank S.A./N.V.; As of January 01, 2012 the Central Securities Depository had nominal holding accounts with the following foreign registrars: Clearstream Banking, S.A; Central Securities Depository CJSC (Kyrgyz Republic). As of January 01, 2012 the Central Securities Depository had nominal holding accounts with the following registrars: Fondovy Tsentr JSC; Centre DAR JSC; Reestr-Service JSC; Registration system of securities JSC; Reestr JSC; Registrator Company JSC; Registrator Zerde JSC; Pervy Nezavisimy Registrator JSC; PROFIT-LINE JSC; Kazreestr JSC. As of January 01, 2012, financial instruments for the amount of KZT trln were registered on nominal holding accounts opened in the name of the Central Securities Depository with the registrar institutions. 15

16 Government securities Volume of government securities in nominal holding as of January 01, 2012 made KZT 2.61 trln showing the increase of KZT 0.02 trln (0.73 %) as compared to the reporting date of the last year. Volume of short-term notes of the National Bank as of January 01, 2012 made KZT 0.51 trln showing the decrease of KZT 0.39 trln (43.24 %) as compared to Volume of GTO as of January 01, 2012 made KZT 2.08 trln showing the increase of KZT 0.41 trln (24.53 %) as compared to MEUKAM showed maximum growth of of GTO from KZT 0.48 trln as of January 01, 2011 to KZT 0.77 trln as of January 01, MEUJKAM also showed significant growth of KZT 0.16 trln (31.03 %) (Fig. 5). Figure 5. Dynamics of structure and of GS in nominal holding for KZT, bln Notes NB МЕОКАМ МЕUКАМ МЕUJКАМ Other GSB Municipal GS Corporate securities Volume of corporate securities in nominal holding as of January 01, 2012 made KZT 4.24 trln showing the increase of KZT 0.58 trln (15.99 %) as compared to Volume of ordinary shares as of January 01, 2012 made KZT 1.55 trln or % of the total of corporate securities in nominal holding showing the increase of KZT 0.53 trln (51.65 %) as compared to Ordinary shares include shares issued in accordance with laws of the countries other than the Republic of Kazakhstan; their as of January 01, 2012 made KZT 0.16 trln and showed the decrease of KZT 0.06 trln (27.75 %) year on year. Volume of preference shares as of January 01, 2012 made KZT 0.11 trln or 2.64 % of the total of corporate securities in nominal holding showing the increase of KZT 0.27 trln (32.17 %) year on year. Figure 6. Dynamics of structure and of GS and of CS in nominal holding for Volume of bonds issued in compliance with the law of the Republic of Kazakhstan as of January 01, 2012 made KZT 2.32 trln or % of the total of corporate securities in nominal holding showing the decline of KZT 0.01 trln (0.6 %) as compared to Volume of bonds issued in compliance with the laws of the countries other than the Republic of Kazakhstan as of January 01, 2012 made KZT 0.26 trln or 6.03 % of the total of corporate securities in nominal holding showing the increase of KZT 0.02 trln (6.72 %) as compared to 2011 (Fig. 6). KZT, bln Prefernce shares Ordinary shares Bonds

17 State-owned block of shares Volume of state-owned block of shares in nominal holding as of January 01, 2012 made KZT 7.45 trln, showing the increase of KZT 0.9 trln (10.83 %) as compared to The bulk of the stateowned block of shares in nominal holding as of January 01, 2012 made ordinary shares in the amount of KZT 7.4 trln or %, showing the increase of KZT 0.89 trln (10.83 %) year on year. Share of preference shares in the total of state-owned block of shares in nominal holding as of January 01, 2012 made KZT billion or 0.62 %, showing the decrease of KZT 4.87 billion (9.49 %) year on year. 17

18 Securities holders Volume of financial instruments owned by resident clients as of January 01, 2012 made KZT 2.06 trln or % of the total of financial instruments in nominal holding showing the decrease of KZT 0.29 trln (12.38 %) as compared to January 01, Volume of financial instruments owned by the customers of resident clients as of January 01, 2012 made KZT trln or % of the total of financial instruments in nominal holding showing the decrease of KZT 0.55 trln (4.77 %) as compared to the last indicator. Volume of financial instruments owned by the customers of nonresident clients as of January 01, 2012 made KZT 1.29 trln or 9.06 % of the total of financial instruments in nominal holding showing the decrease of KZT 0.54 trln (71.09 %) as compared to the last index (Fig. 7). Figure 8. Dynamics of structure of securities holders (by econmic sector) for Central Bank Other Non-residents Depository organizations Financial organizations State non-financial organizations KZT, bln Figure 7. Dynamics of structure of securities holders (clients and their customers) for KZT, bln Customers of non-resident clients Resident clients Customers of resident clients If attributed to each sector of economy, principal holders of financial instruments shall be government nonfinancial organizations and their share makes %, and its major portion (96.89 %) is comprised of SBS. Share of nonresidents made 9.06 %, share of financial organizations (organizations carrying out certain types of banking operation, insurance companies, nongovernment pension funds, broker companies, pawnshops, exchange offices, etc.) showed insignificant decline and made %; share of deposit companies showed the increase up to % (Fig. 8). 18

19 Registered transactions Total of transactions registered by the Central Securities Depository in 2011 amounted to KZT trln showing the increase of KZT 3.66 trln (7.08 %) as compared to Total number of transactions registered by the Central Securities Depository in 2011 made 66,116 showing the decline of 14,098 as compared to In the of registered transactions substantial share belongs to automatic repo transactions by trade system of the trade organizer; their in 2011 made KZT trln showing the decrease of KZT 0.74 trln (2.93 %) as compared to the similar indicator of the last year and making % of the total of registered transactions. In 2011 substantial was also the of registered direct repo transactions in the amount of KZT trln, showing the increase of KZT 0.61 trln as compared to the same indicator of 2010 and making % of the total of registered transactions. Volume of placement operations registered by the Central Securities Depository given the placement transactions registered upon transfer of financial instruments into nominal holding decreased in 2011 by KZT 1.29 trln (22.03 %) and made KZT 4.56 trln. Share of placement operations in the total of registered transactions made 9.50 %. Volume of registered purchase and sale transactions of financial instrument inclusive of purchase and sale transactions registered upon transfer of financial instruments into nominal holding showed the decline of KZT 0.73 trln (42.84 %) and made KZT 0.98 trln. Share of registered purchase and sale transactions of financial instrument in the total of transactions registered made 2.04 %. Volume of transactions related to transfer of financial instruments into nominal holding and withdrawal of financial instruments from nominal holding excluding placement and purchase/sale operations being registered upon transfer of financial instruments into nominal holding and withdrawal of financial instruments from nominal holding, showed the decrease of KZT 0.24 trln (37.93 %). Volume of registered transactions on pledge of rights for financial instruments showed the decline of KZT 0.01 trln (33.65 %) and made KZT 0.04 trln. Volume of registered transactions on transfer increased by KZT 0.09 trln (4.09 %), redemption operations in 2010 decreased by KZT 0.39 trln (9.41 %). The of registered other transactions and operations in 2011 increased by KZT 0.25 trln ( %) (Fig. 9). Figure 9. Dynamics of structure of registered transactions for KZT, bln Automated repo Placement Other Direct repo Redemption Buy/sell

20 Primary securities market In 2011 of registered transactions on placing of financial instruments taking into account placing upon transfer of financial instruments into nominal holding and withdrawal of financial instruments from nominal holding made KZT 4.56 trln, showing decrease of KZT 1.29 trln in 2010 (22.08%), including: of transactions on placing of government securities made KZT 3.64 trln, including of transactions on placing of short-term notes of the National Bank made KZT 2.97 trln, GTO KZT 0.67 trln; of transactions on placing of corporate securities made KZT 0.24 trln; of transactions on placing of state-owned block of shares made KZT 0.67 trln. In total of placement share of placing of government securities made %, showing the increase of 8.3 % as compared to the same index of the last year. Share of placing of corporate securities declined and made 5.33 % of the total of placement. Share of placing of state-owned block of shares showed the increase and made 14.72% of total of placement (Fig. 10). In total of placing of government securities, share of of placing of short term securities made the largest portion %, share of of medium-term and long-term securities made 3.69 % and % respectively, showing the increase in the of placing of short term securities by KZT 0.39 trln (11.23 %) and making KZT 3.06 trln, and showing decline in the of medium-term securities by KZT 0.04 trln (23.77 %) and making KZT 0.13 Figure 10. Dynamics of of registered transactions by placement of financial instruments for trln, and showing increase in the of placing of long term securities by KZT 0,09 trln (28.97 %) and making KZT 0.44 trln. In total of placing of corporate securities the largest portion % falls on bonds; share of placing of ordinary and preference shares made % and 3.26 % respectively. Volume of placing of bonds showed decline of KZT 0.15 trln (45 %) and made KZT 0.19 trln and of placing of ordinary shares showed decline of KZT 0.03 trln (209 %) and made KZT 0.05 trln, of placing of preference shares showed decline of KZT 2.75 trln (53 %) and made KZT 7.91 trln. In 2011 the total of registered transactions of placing state owned block of shares made KZT 0.67 trln showing decrease of KZT 0.85 trln (55.79%) year on year. The transaction to place preference shares (state-owned block of shares) in 2011 were not registered. Number of placement transactions registered by the Central Securities Depository in 2011 made 1,851 showing the decrease of 829 (30.93%) as compared to KZT, bln CS SBS GS

21 Secondary securities market General information Volume of transactions with financial instruments in the secondary market and registered by the Central Securities Depository (purchase and sale transactions, including purchase and sale transactions registered while transfer of financial instruments into nominal holding and withdrawal of financial instruments from nominal holding, direct repo transactions and automatic repo transactions) in 2011 made KZT trln showing the increase of KZT 2.09 trln (5.37 %) as compared to the same indicator of the last year and making % of the total gross domestic product of the Republic of Kazakhstan (Fig. 11). Figure 11. Dynamics of of financial instruments transaction enetered into on the secondary market and registered by KACD and of GDP of the Republic of Kazakhstan KZT, bln Secondary market GDP Number of transactions registered in the secondary market in 2011 with financial instruments showed the decline of 10, as compared to 2010 and made 56,659 0 transactions with the result that average of one transaction registered in the secondary market made KZT bln showing the increase of KZT bln as compared to 2010 (Fig. 12). Figure 12 Dynamics of average of one registered transaction and quantity of registered transactions for KZT, bln Quantity of transactions Share of government securities transactions registered in the secondary market in 2011 showed the increase of 4.82 % as compared to the previous year and made % of the total of transactions registered in the secondary market. Share of corporate securities transactions registered in the secondary market (including state-owned block of shares) showed the decline of 6.69% and made 31.95% of the total of transactions registered in the secondary market. Share of government securities transactions registered in the secondary market showed the increase of % and made 0.09% of the total of transactions registered in the secondary market. Volume of government securities transactions registered in the secondary market in 2010 made KZT trln showing the increase of KZT 1.27 trln as compared to the same index of the last year. Volume of corporate securities transactions registered in the secondary market (including stateowned block of shares) in 2011 made KZT trln showing the decline of KZT 0,84 bln as compared to the same index of the last year. Volume of state-owned block of shares transactions registered in the secondary market in 2011 made KZT 0.03 trln showing the decline of KZT 0,02 bln as compared to the same index of the last year. Примечание [A1]: Не тот рисунок 21

22 Share of transactions registered in 2011 in the unorganized secondary market made % of the total of transactions registered in the secondary market showing the decrease of 0.51 % as compared to the similar indicator of the last year. Share of transactions registered in the organized secondary market showed decline and made % of the total of transactions registered in the secondary market(fig 13). Figure 13. Dynamics of of transactions (operations) registered on the organized and unorganized markets for KZt, mln unorganized market organized market Volume of transactions registered in 2011 in the organized secondary securities market made KZT trln showing the decrease of KZT trln as compared to the same index of the last year. Volume of transactions registered in the unorganized secondary securities market made KZT trln showing the decrease of KZT 0.84 trln as compared to the similar 0 indicator of the last year Volume of registered automatic repo transactions in 2011 made KZT 24,56 trln, showing the increase of 1.68 % and making % of the total of transactions registered in the secondary market. Volume of registered direct repo transactions in the unorganized secondary market in 2010 showed the increase of KZT 0.48 trln (4.12%) and made KZT trln. Share of the above mentioned transactions registered in the secondary market showed the increase from to % as compared to Volume of registered direct repo transactions in the organized secondary market in 2011 showed the decline of KZT 0.13 trln (93.48 %) as compared to 2009 and made KZT 0,01 trln. Share of the above mentioned transactions in the total of transactions registered in the secondary market showed the decline from 0.36 % to 0.02 %. Volume of financial instrument purchase and sale transactions registered in 2011 in the organized market showed the decline of KZT 0.38 trln (30.54 %) and made KZT 0.85 trln. Share of the above mentioned transactions in the total of transactions registered in the secondary market showed the decline from 3.17 % to 2.32 %. Share of financial instrument purchase and sale transactions registered in 2011 in the unorganized secondary market as in the previous years was insignificant and made 0.34 % of the total of transactions registered in the secondary market. 22

23 Government securities 32,116 transactions with government securities have been closed in 2011 for the total amount of KZT trln. Increase in the of transactions with government securities made KZT 1.27 trln as compared to 2010 and number of registered transactions dropped by 2,774 transactions. (Figure 14). Volumes of registered transactions on shortterm notes of the National Bank, MEOKAM, MEUKAM were the most significant and made KZT 18.72, KZT 2.35 and KZT 2.56 trln respectively. Share of transactions on short-term notes of the National Bank made % of the total of government securities transactions registered in the secondary market. Share of the total of MEOKAM, and MEUKAM transactions made 9.42 and % respectively of the total of government securities transactions registered in the secondary market. Share of registered MEKKAM transactions made 2.38 % of the total of government securities transactions registered in the secondary market. Share of registered МAOКАМ, MEUJKAM, MUIKAM and municipal securities transactions didn t exceed 3 % of the total of government securities transactions registered in the secondary market. In 2011 the major portion of government securities transactions registered in the secondary market made transactions closed in the organized market - KZT trln or % of the total of government securities transactions registered in the secondary market. Volume of government securities transactions registered in the unorganized secondary market made KZT 0.04 trln or 0.15 % of the total of government securities transactions registered in the secondary market. Corporate securities Figure 14. Dynamics of and quantity of GS transactions registered by КАСD on the secondary market for ,537 transactions on corporate securities have Figure 15. been closed in the secondary market in 2011 for Dynamics of and quantity of CS transactions registered by КАСD on the secondary market for the amount of KZT trln. Showing the decline of KZT 0.84 trln (6.69 %) as compared to KZT, bln pieces in the of corporate securities Volume Quantity transactions closed in the secondary market. So the number of corporate securities transactions dropped by 7, Volume of ordinary shares transactions registered in the secondary market made KZT trln in 2011 or 2.14 % of the total of corporate securities transactions registered in the secondary market, preference shares transactions made KZT 0.05 trln or 0.46 % and bond transactions made KZT trln or %. The major portion of corporate securities transactions in 2011 made transactions closed in the unorganized market for the amount of KZT trln or % of the total of corporate securities transactions closed in the secondary market. Volume of corporate securities transactions closed in the organized market made KZT 0.5 trln or 4.26 % of the total of corporate securities transactions closed in the secondary market (Fig. 15). KZT, bln Volume of transactions Quantity of transactions pieces

24 State-owned block of shares 6 transactions were closed on state-owned block of shares in the secondary market for the total amount of KZT 0.03 trln in Pledge of rights for securities As compared to 2010 of operations on pledge of rights for financial instrument showed the increase of KZT 10,25 bln (33.65%) and made KZT bln. Total of registered operations on pledge of rights for corporate securities (opening, closing and non-fulfillment) in 2011 made KZT bln, for government securities KZT 0.43 bln. The operations on pledge of rights for government securities were not registered in No operations on pledge of rights for government securities and state-owned block of shares have been registered in

25 Transfer of financial instruments into nominal holding and withdrawal of financial instruments from nominal holding Total of transfer of financial instruments into nominal holding related operations registered by the Central Securities Depository in 2011 made KZT 0.98 trln showing the decrease of KZT 1.25 trln (55.93 %) as compared to Total number of transfer of financial instruments into nominal holding related operations registered by the Central Securities Depository in 2011 made KZT 8, 096 showing the decrease of KZT 4, 551 (35.98 %) as compared to (Fig. 16) The transfer of government securities into nominal holding related operations for accounting period were not registered. Volume of transfer of state owned block of securities into nominal holding related operations made KZT 0.67 trln showing the decrease of KZT 0.85 trln (55.85 %) as compared to 2010 and made 68.52% of total of transfer of financial instruments into nominal holding related operations. Volume of transfer of corporate securities into nominal holding related operations made KZT 0.31 trln showing the decrease of KZT 0.4 trln (56.11 %) as compared to 2010 and made 31.48% of total of transfer of financial instruments into nominal holding related operations. Main of transfer of corporate securities into nominal holding related operations formed thanks to transfer of bonds into nominal Figure 17. Dynamics of structure and of operations related to transfer of CS into nominal holding for KZT, bln Bonds Shares Figure 16. Dynamics of and quantity of operations related to transfer of financial isntruments into nominal holdings for holding amounting KZT 0.22 trln showing the decrease of KZT 0.26 trln (53.94 %) and made 71.26% of total of transfer of corporate securities into nominal holding related operations. Volume of transfer of ordinary shares into nominal holding related operations made KZT 0.07 trln showing the decrease of KZT 0.14 trln (65.53 %) and made 24.18% of total of transfer of corporate securities into nominal holding related operations. Volume of transfer of preference shares into nominal holding related operations made KZT trln showing the increase of KZT 4.79 trln (51.90 %) and made 4.53% of total of transfer of corporate securities into nominal holding related operations. (Fig. 17) Total of withdrawal of financial instruments from nominal holding related operations registered by the Central Securities Depository in 2011 made KZT 0.26 trln showing the decrease of KZT 0.11 trln (30.19 %) as compared to KZt, bln Volume Quantity pieces