On June 12 2007, the Kazakhstan Agency on Regulation of Activities of the Regional Financial Centre of Almaty city (АRA RFCA) held a press-conference entitled "Results of the activities of RK Agency on regulation of RFCA for 2006 and first half of 2007 and plans for the future. The role of RFCA in stock market development.

June 12, 2007 - The President of the Republic of Kazakhstan, N.A. Nazarbayev, was the one who first thought up the project to create a Regional Financial centre of Almaty city (RFCA) and, he made it public during a speech at the Congress of Financiers of Kazakhstan in November 2004. Thus in 2005 RK Government made a decision to establish regional financial centre of Almaty city. The decision was conditioned by leading development of Kazakhstan financial sector among other CIS countries, by a sustainable growth of financial services share in GDP, and internal savings, by a start of financial capital expansion in CIS countries and formation of skilled staff in financial sphere.

The Company "Boston Consulting Group", which has directly participated in the creation and development of financial centers in Singapore and Thailand, was the one chosen and assigned, by the Government of the Republic of Kazakhstan, to implement this project. This Company's main task was to study the advantages and disadvantages of the development of the Kazakhstani financial market as well as the development of the recommendations for the legal infrastructure and management positions of the newly created regional financial center.

As of June 5, 2006 the Law of the Republic of Kazakhstan "On the Regional Financial centre of Almaty city" was adopted and the corresponding amendments were made in some 14 legislative acts of the Republic of Kazakhstan concerning the activities of the Agency and RFCA by the Law on it dated August 28 2006.

To date, the Agency had its presentations in Mangistau, Atyrau, Aktobe, Kyzylorda, Southern-Kazakhstan, Zhambyl, Karaganda and Northern Kazakhstan oblasts, and Astana and Almaty cities aimed at attracting issuers, participants and retail investors of various regions of the country to the special trading floor of RFCA (STF) within the framework of which memorandums of understanding and cooperation were made between the Agencyand oblast and city akimats. In accordance with these agreements, the work on attracting not less than three issuers from each region till the end of 2007 is performed.

Besides, Agency presented RCA in some foreign countries such as Great Britain, China, Singapore, Germany, South Korea, Baltic countries, Russia, Ukraine and etc. the most significant results of those trips were signing the memorandums of cooperation and understanding, in particular, with London, Frankfurt, Seoul, Hong-Kong and Warsaw stock exchanges. Signed documents describe the readiness to work out procedures of long-term cooperation, concrete actions on establishing relations between stock exchanges of the countries mentioned and RFCA.

At present, 14 issuers, i.e. "Astana-Finance" JSC, "Astabna-Nedvizhimost" JSC, "Bank centre Credit" JSC, "Kazakhstan Mortgage company" JSC, "Concern Tsesna-Astyk" LLP, "ECOTON+" JSC, "MAG" JSC, "Kazakhtelecom" JSC, "Kazkommertsbank" JSC, Kazkommerts International B.V., «Kazcat» JSC, «Temirbank" JSC, "ATF-Bank" JSC and «RESMI COMMERCE» LLP are lites in RFCA. Out of 55 securities, offered by these companies in stock market there are 15 stocks, 40 bonds. Today, RFCA trade volume is more than 43 m. USD. Market capitalization of shares is more than 5,3 bn. USD, while that of bonds is 3,6 bn.USD.

ARA RFCA is holding negotiations on entering of companies from different economy spheres - financial, constructing, manufacturing, agriculture and etc. in STF.

The Agency is planning to hold the seminar for national issuers to introduce the procedure of securities issuing in September of the current year in Almaty and Astana cities.

Adhering in the stock market development to the step-by step approach, Agency is mainly focused on forming the class of retail investors of "economic" mentality and outlook that would make private investments in securities market an essential part of Kazakhstan economy. In this regard, considerable work is being performed on raising population's knowledge; esp. cooperation with mass media is realized.

Thus, the Agency is planning to hold two workshops for journalists from all the regions of Kazakhstan.

In general, the following directions of work for stock market development and raising the attractiveness of the financial centre are provided by RFCA Development program till 2010:

• Providing the financial centre with modern stock exchange meeting international standards;
• Establishing clearing house for improving the clearing methods on concluded deals;
• Establishing national rating agency that will enable investors adequately evaluate risks of their investments;
• Establishing the deposits insurance fund for population in securities market;
  Study, development and introduction of new financial instruments such as Islamic instruments, derivatives;
• Study, development and introduction of new stock technologies, through securities transactions via internet trading;
• Financing strategic projects through issue of infrastructural securities and offering thenm in STF;
• Creating and holding national education programs, aimed at raising investment culture of the population which will facilitate additional inflow of funds of investors to stock market;
• Wide coverage of financial centre's activities via mass media, for bringing home and foreign issuers and investors to stock market;
• Creating conditions for providing local labor market with high-qualified experts in the field of securities market, finance and etc.;
• Improving the legislation and legal framework for efficiency of securities market functioning;
• Development of proposals to Government and local executive agencies on improving the Almaty city infrastructure (airport, hotels, roads, Internet).

Implementation of these tasks will raise compatibility of financial services rendered by RFCA, and in general, facilitate activation of stock market in the country.

Source: INTERFAX-KAZAKHSTAN NEWS AGENCY, http://www.interfax.kz