“Taking into account the high interest of Kazakhstani investors in foreign currency securities, at current rates, the risk-yield of securities may be rather attractive” - Askhat Yerzhanov, Head of Treasury Department at IC Freedom Finance
December 25, 2019
|An exclusive comment by Askhat Yerzhanov, Head of Treasury Department at IC Freedom Finance, on the admission of Ukraine-2028 sovereign international bonds to trades on the Kazakhstan Stock Exchange (KASE).|
Why did Freedom Finance decide to bring the sovereign Eurobond of Ukraine to the market of Kazakhstan?
The sovereign Eurobond of Ukraine was launched on the Kazakhstan Stock Exchange (KASE) in order to expand the range of investors to whom this paper will be available. Kazakhstani investors have long had access to the external public debt of Ukraine and other countries in the international markets. But the presence of the $200 thousand minimum lot size requirement for the purchase seriously limited the range of potential investors. Listing on KASE allowed to reduce this threshold to $1 000. In addition, the current risk/yield indicators of Ukrainian sovereign debt are quite attractive, there is also a good potential for price growth.
What amount will be available to Kazakhstani investors?
Technically, the available amount for purchase is limited only by the amount of the issue itself. But in reality, the product is aimed at retail investors with purchase volumes of less than $200 thousand.
How significant can be the interest of Kazakhstani investors in Ukrainian securities? Who can be a potential investor?
The main target audience of Ukrainian securities at KASE are private investors. The minimum purchase lot of $ 1000 and tax preferences for the purchase and sale of securities on the stock exchange are significant factors. In addition, these securities are of interest to insurance companies and investment funds again due to convenient lots and low costs compared to the operations on the international market.
Taking into account the high interest of Kazakhstani investors in foreign exchange securities, at current rates, the risk-yield of securities may be rather attractive.
Why is this issue chosen as the “first fruit”?
The profitability and duration indicators of this particular issue are the most attractive both for investors who want to fix the profitability, and for buyers aimed at generating income from the growth of paper quotes.
Are there plans to bring other Ukrainian securities to KASE?In the presence of high demand from investors, it is possible to bring securities with a shorter maturity to allow diversification of client portfolios in terms of duration.
Issue — Ukraine, 9.75% 1nov2028, USD
Country of riskUkraine
Redemption (put/call option)
М/S&P/F— / — / —
Company — Ukraine