Financial Market - The Times Of Central Asia

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Financial Market

Moscow’s MOEX No Longer a Stakeholder in Kazakhstan’s Stock Exchange

Marking a significant move for the country's financial market, Kazakhstan Stock Exchange (KASE) has announced the withdrawal of Moscow Exchange PJSC (MOEX) from its shareholders. An updated list of shareholders, available on the official site of the Exchange, shows that as of October 11, 2024, the main shareholder of KASE remains the National Bank of the Republic of Kazakhstan, with a 47% stake. . According to reports, the conclusion of its cooperation with MOEX, KASE marks the end of a collaborative phase that began on October 10, 2018, following the signing of a Strategic Partnership Agreement between the exchanges. During this period, several key projects implemented to advance Kazakhstan's exchange market included modernizing trading and clearing systems, introducing central counterparty services across all trading segments, and launching new financial instruments, such as repo transactions with clearing certificates of participation. On September 30, 2024, Vladimir Krekoten, representative of MOEX, resigned from the KASE Board of Directors, having applied for early termination of his position. The Exchange expressed gratitude to MOEX for its contribution in realizing strategic tasks to expand the exchange market opportunities and create new products. KASE remains the leading exchange in Central Asia, providing universal opportunities for trading in corporate and government securities, currency transactions, derivatives, and bonds of international organizations. The Exchange is a member of the International Federation of Exchanges (WFE) and the Federation of Euro-Asian Stock Exchanges (FEAS) and actively participates in the UN Sustainable Stock Exchanges Initiative. In June, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) imposed sanctions against the Moscow Exchange (MOEX), the National Settlement Depository, and the National Clearing Center of the Russian Federation, after which, representatives of the exchange said they would consider continuing business relations with the Moscow Exchange (MOEX), subject to the restrictions on sanctions. On July 15, 2024, KASE Chairman of the Board Alina Aldambergen spoke out about the buyout of the Kazakh exchange's stake from the Moscow Exchange (MOEX).

Finance

PayPal Set for Integration in Uzbekistan Pending Central Bank Talks

PayPal, Alipay, UniPay, Apple Pay, and Google Pay can be integrated into Uzbekistan. By the end of this year, the Central Bank of Uzbekistan will negotiate with these international online payment companies and take measures to connect them to payment systems and banking services in Uzbekistan. Uzbekistan is the only country in Central Asia not connected to PayPal. Uzbeks who need PayPal use detours—they register through other countries, such as Kazakhstan. However, this is inconvenient and requires using the system's limited capabilities. Also, some people use this online payment system to use other toll-free numbers on the internet, even though it is unsafe. In 2021, PayPal announced that it has no plans to enter the Uzbekistan market. Independent programmers and freelancers in Uzbekistan use electronic platforms to sell their software and products to foreign customers. However, payments can only be made through the PayPal payment system on some specialized platforms, particularly Upwork, Fiverr, Envato, Storyblocks, and similar token sale systems.

Digitalization

Swedish Company to Help Turkmenistan Establish Fast Payment System

The Swedish IT company "CMA," specializing in software solutions for financial markets, has signed an exclusive agreement with Turkmen company "Abraýly Işler", at the International Conference “HI-TECH Turkmenistan 2024.” Noting the value of cooperation in creating a national system of fast payments, CMA Regional Director Maxim Nescheret stated, “We have already implemented similar projects in more than 50 countries, and we hope to share our experience with Turkmenistan in creating this important system.” CMA, founded in 1983, currently provides over 37 central banks and many commercial banks worldwide with solutions for instant payment systems, central depositories, and automated clearing houses. Built on CMA's advanced technology platform for high performance, scalability, and security, the service is customized to meet each client's needs. In addition to the fast payment system, CMA is engaged in discussion with Turkmenistan's stock market regarding the possibility of creating basic services, including a central depository and settlement center, to help attract external investments and expand cooperation with foreign investors. Although Turkmenistan is actively modernizing its banking sector and digital payments, including the introduction of a contactless payment system and mobile applications to facilitate transactions, challenges remain. One of the main issues is the need for infrastructure to support fast and contactless payments. Although local banks such as Halkbank have introduced mobile apps and terminals for contactless transactions, their usage remains limited. Moreover, people often lose money due to bank failures and technical problems.

Finance

Chinese Yuan to Become Kyrgyzstan’s Fifth Official Currency

The National Bank of the Kyrgyz Republic has announced that from next month the Chinese yuan will be an official currency of Kyrgyzstan. The yuan will join the Kyrgyz sum, the U.S. dollar, the euro, and the Russian ruble as official currencies, and an official exchange rate will be set. This measure aims to facilitate trade transactions and improve economic ties with China, one of Kyrgyzstan's largest trading partners. Introducing the yuan into official circulation will also help stabilize the country's financial system amid global economic uncertainty and allow entrepreneurs and financial institutions to manage their currency risks better. Notably, this initiative is being implemented against the backdrop of the yuan's growing influence in international settlements and its emergence as a global reserve currency. It also opens up new opportunities for Kyrgyzstan to participate in Chinese investment projects, which could positively impact the development of infrastructure and other key sectors of the economy. The change will take effect from September 1, 2024. The Chinese yuan exchange rate to the Kyrgyz sum will be calculated based on the cross rate with the U.S. dollar. This method is based on data from the agencies such as Reuters and Bloomberg.

Investment

U.S. Companies Seek Export Opportunities in Uzbekistan

According to a recent report, the U.S. State Department is in regular receipt of applications from U.S. companies in search of opportunities to export their products to Uzbekistan's markets. “Our products likewise require review and certification for import into Uzbekistan, so expediting that process would help U.S. agricultural and livestock products reach Uzbek consumers. U.S. suppliers of technologies, industrial equipment, and manufactured goods are also actively bidding on public procurement opportunities and working with partners in Uzbekistan,” explained a spokesperson for the department. The USA's readiness to help Uzbekistan implement the announced reform program, including economic issues was noted. Referencing the significant improvements in the investment climate created by recent economic reforms and the potential of further reforms to attract more investment and technical expertise to Uzbekistan, the department emphasized: “Generally speaking, we welcome and encourage multilateral efforts to support regional connectivity in Central Asia and the South Caucasus westward to Europe. Such efforts create a more secure, resilient, and prosperous region.” The U.S. State Department also noted that through the regional trade activities of the U.S. Agency for International Development (USAID) in Central Asia, the US is helping to increase the competitiveness of trade, entrepreneurship, e-commerce, and the private sector. As stated in the report, “Through the Partnership for Global Infrastructure, the U.S. is currently evaluating potential areas for infrastructure investment where it could contribute project advisory technical assistance, project preparation, and financing to tangibly move forward strategic projects in the Trans-Caspian International Transport Route.”

Financial Market South Korea Economy Export/Import Banking

South Korean Corporation Bank to Open in Kazakhstan

Microfinance organization BNK Finance Kazakhstan, part of the Korean corporation BNK Financial Group Inc., has been granted permission to transform into a second-tier bank. The news was reported by the Agency of the Republic of Kazakhstan on Regulation and Development of Financial Market's press service (ARFM). BNK Financial Group Inc. is the largest South Korean financial group with assets of $129 billion and a national rating of "AAA." The group has two banks with over 300 branches and "A2" international ratings. In 2021, BNK MFI received a license to carry out microfinance activities. Since then, the company has significantly increased its performance and capabilities and now ranks 13th in terms of assets in Kazakhstan's microfinance organizations sector. The decision by the Agency for Regulation and Development of the Financial Market of Kazakhstan (ARDFM) to issue a permit for BNK's voluntary reorganization into a second-tier bank was approved by a resolution on June 7. As noted by the press service, the appearance of a new foreign bank in Kazakhstan's financial market will strengthen competition in the banking sector and provide clients in Kazakhstan with financial services that adhere to international groups' advanced corporate standards. Earlier this month, during talks with the head of South Korea, Yoon Suk Yeol, Kazakhstan's president Kassym-Jomart Tokayev, cited Seoul as one of Astana's most important strategic partners in the Asia-Pacific region. Korea ranks fourth in foreign trade turnover and is among Kazakhstan's top ten largest foreign investors.