KAZAKHSTAN STOCK EXCHANGE INC (KASE) Relevant as at July 1, 2008.

KAZAKHSTAN STOCK EXCHANGE INC (KASE)

Relevant as at July 1, 2008

COEVAL OF TENGE …

KASE was established on November 17, 1993 under the name of Kazakh Inter-bank Currency Exchange – two days after Tenge (the new national currency of Kazakhstan) was introduced on November 15, 1993.

Nowadays, November 15 is celebrated as the official "Day of Tenge".

"New" tenge (since 2006)

"Old" tenge (1993–2006)

NOW COMMERCIAL

KASE is a commercial joint-stock company with 72 shareholders (as of July 1, 2008). The Regional Financial Center of Almaty JSC is the largest shareholder. Other shareholders include: banks, brokerage firms, asset management companies, pension funds and other professional financial institutions.

Voting method: one share – one vote.

THE SIZE MATTERS

As of July 1, 2008

own capital $9.6 m

paid up charter capital $1.4 m

issued shares 450

offered shares 450

share balance value 2.6 m tenge

SO DOES THE PROFIT

assetsnet

profitreturn

on assetsreturn

on equity

2007 $11.9 m $1.8 m 17.8% 20.2%

2006 $8.3 m $2.2 m 32.5% 34.3%

2005 $5.2 m $1.3 m 29.0% 30.4%

Total number of members – 100 of which:

WE ARE BIG IN NUMBERS

Category "A" (with the right of participation in trades in all financial instruments, circulating on the special trading floor of the Regional Financial Center of Almaty ) – 48;

Category "B" (with the right of participation in trades in foreign currency ) – 30;

Category "C" (with the right of participation in trades in fixed-term contracts ) – 4;

Category "K" (with the right of participation in government securities ) – 80;

Category "P" (with the right of participation in trades in corporate serial securities, listed on the official list of the Exchange ) – 80;

Category "H" (with the right of participation in trades in corporate serial securities, admitted to circulation (trading) in the sector "Non-listing securities" of the Trading system of the Exchange, and state blocks of shares of privatized organizations ) – 46.

WE MAKE THE HISTORY (1)

Today KASE is the single universal financial exchange in Kazakhstan with brief but bright history:

1993 – first trades with foreign currency (US dollars)

1995 – first trades with T-bills

1996 – first trades with derivatives (KZT/USD exchange rate futures)

1997 – first trades with listed shares

1997 – first trades with state blocks of shares

1997 – first trades with non-listed corporate securities

1998 – launching of "nego" deals system on KASE (instead of over-the-counter securities market )

WE MAKE THE HISTORY (2)

1998 – first trades with eurobonds of Kazakhstan

1999 – first trades with listed corporate bonds1999 – first trades with municipal bonds (since 2005 the issuance of these bonds is prohibited)

1999 – launching of the "nego" repo market

2001 – first trades with bonds of international financial organizations (IFO)2001 – launching of "automatic" repo market (the most massive and active sector of the KASE market)

2002 – first trades with promissory notes2003 – first trades with foreign T-bills (Russia 2028 & Russia 2030 )

WE MAKE THE HISTORY (3)

2006 – first trades with foreign corporate bonds (JP Morgan and Merrill Lynch)

2006 – IPO of KazMunaiGas Exploration Production shares with the use of KASE settlement system

2006 – secondary distribution of KAZAKHMYS PLC (UK) shares with the use of KASE settlement system

2007 – special trading floor of the Regional Financial Center of Almaty city was founded on the base of KASE (founded to attract foreign issuers and investors)

2007 – launch of the new index on the share market – KASE Index, which continued the number series of KASE_Shares Index

2007 – commercialization of KASE

KASE – UNIVERSAL MARKET (1)

Repo (money) market constitutes for 63.2% of the total KASE turnover

30,8%

49,4%

2,8%

3,7%10,8%

Nego repo with corporate securities, USD 5,004.4 m

Autorepo with public securities,

USD 59,291.4 m

Corporate securities,USD 2,555.4 m (2.1%)

Public securities,USD 3,073.0 m

Autorepo with corporate securities, USD 11,993.1 mDirect repo with public securities,

USD 664.2 m (0.5%)

Currencies,USD 38, 783.2 m

STF RFCA,USD 455.3 m (0.4%)

6 m 2008:121,819.9

USD m

Repo (money) market constitutes for 63.2% of the total KASE turnover

30,8%

49,4%

2,8%

3,7%10,8%

Nego repo with corporate securities, USD 5,004.4 m

Autorepo with public securities,

USD 59,291.4 m

Corporate securities,USD 2,555.4 m (2.1%)

Public securities,USD 3,073.0 m

Autorepo with corporate securities, USD 11,993.1 mDirect repo with public securities,

USD 664.2 m (0.5%)

Currencies,USD 38, 783.2 m

STF RFCA,USD 455.3 m (0.4%)

6 m 2008:121,819.9

USD m

KASE serves the markets of: "nego" and "automatic" repo with public and corporate

securities foreign currencies (US dollar, euro, Russian rouble)public securities of Kazakhstan issued by the National Bank,

municipalities and Ministry of Finance (including international bonds of Kazakhstan)

IFO bonds and foreign T-billspromissory notesequities corporate bonds …

KASE – UNIVERSAL MARKET (2)

"regular" domestic bonds (nominated in Tenge or foreign currencies, with discount or coupon, with fixed or floating coupon)

international bonds of Kazakhstani issuersagency bonds (with the tax regime equal to the tax regime of

T-bills) infrastructural bonds (secured by the government guarantee)bonds of foreign issuers (previously registered outside

Kazakhstan) soon: bonds of foreign issuers (registered in Kazakhstan)

A GREAT VARIETY OF BONDS

REPO AND FOREX MARKET DOMINANCE

KASE repo market is specially designed for domestic purposes – to satisfy the needs of local pension funds and banks in short-term money borrowing and lending.

KASE foreign currencies market – the basic trading floor for the National Bank of the Republic of Kazakhstan to regulate the exchange rate of Tenge.

KZT/USD: the KASE exchange rate today = official exchange rate tomorrow.

STRIKING DYNAMICS (1)

0

50

100

150

200

250

300

350

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 01.07.2008

Repo

Corporate securities

Public securities

Derivatives

Currencies169.3USD bn

322.5USD bn

121.8USD bn

0

50

100

150

200

250

300

350

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 01.07.2008

Repo

Corporate securities

Public securities

Derivatives

Currencies169.3USD bn

322.5USD bn

121.8USD bn

STRIKING DYNAMICS (2)

0

50

100

150

200

250

300

350

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 01.07.2008

0

50

100

150

200

250

300

350

KASE, USD bn

% to GDP

GDP, USD bn

308.6%

169.3USD bn

322.5USD bn

121.8USD bn

0

50

100

150

200

250

300

350

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 01.07.2008

0

50

100

150

200

250

300

350

KASE, USD bn

% to GDP

GDP, USD bn

308.6%

169.3USD bn

322.5USD bn

121.8USD bn

MARKET CAPITALIZATION (USD bn)

0

10

20

30

40

50

60

70

80

90

100

2001 2002 2003 2004 2005 2006 2007 2008

Shares

0

2

4

6

8

10

12

14

16

2001 2002 2003 2004 2005 2006 2007 2008

Corporate bonds

as of June 30, 2008 –USD 95.2 bn

as of June 30, 2008 –USD 12.0 bn

0

10

20

30

40

50

60

70

80

90

100

2001 2002 2003 2004 2005 2006 2007 2008

Shares

0

2

4

6

8

10

12

14

16

2001 2002 2003 2004 2005 2006 2007 2008

Corporate bonds

as of June 30, 2008 –USD 95.2 bn

as of June 30, 2008 –USD 12.0 bn

LISTED COMPANIES (total)

17 2332

4968

7994

114126 134

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

TOTAL

17 1721

54

62

7669

25

40

6897

89

1

78564545

36

1122

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Shares

Corporate bonds as ofJuly 1

as ofJuly 1

17 2332

4968

7994

114126 134

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

TOTAL

17 1721

54

62

7669

25

40

6897

89

1

78564545

36

1122

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Shares

Corporate bonds

17 2332

4968

7994

114126 134

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

TOTAL

17 1721

54

62

7669

25

40

6897

89

1

78564545

36

1122

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Shares

Corporate bonds as ofJuly 1

as ofJuly 1

LISTED COMPANIES (by category)

14 189 8 8 12

2027 30

38

3941

7 9 1313

20

2732

31

3133

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Category "A"Category "B"Category "C"

Shares

21 236 11 6 7

17

29 29

3034 39

49

61

62 63

21

20

102

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Category "A"Category "B"Category "C"

Corporate bondsas of

July 1

as ofJuly 1

14 189 8 8 12

2027 30

38

3941

7 9 1313

20

2732

31

3133

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Category "A"Category "B"Category "C"

Shares

21 236 11 6 7

17

29 29

3034 39

49

61

62 63

21

20

102

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Category "A"Category "B"Category "C"

Corporate bonds

14 189 8 8 12

2027 30

38

3941

7 9 1313

20

2732

31

3133

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Category "A"Category "B"Category "C"

Shares

21 236 11 6 7

17

29 29

3034 39

49

61

62 63

21

20

102

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Category "A"Category "B"Category "C"

Corporate bondsas of

July 1

as ofJuly 1

LISTING COMPANIES (by industry)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000

2001

2002

2003

2004

2005

2006

2007

01.0

7.08

Energy/powerengineeringFinance

TelecommunicationservicesRaw materials sector

Industry

Main consumer sector

Public sector

Information technology

Health protection

Discretionary consumersector

Shares

2000

2001

2002

2003

2004

2005

2006

2007

01.0

7.08

Corporate bonds

Global Industry Classification Standard (GICS) of S&P has been used

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000

2001

2002

2003

2004

2005

2006

2007

01.0

7.08

Energy/powerengineeringFinance

TelecommunicationservicesRaw materials sector

Industry

Main consumer sector

Public sector

Information technology

Health protection

Discretionary consumersector

Shares

2000

2001

2002

2003

2004

2005

2006

2007

01.0

7.08

Corporate bonds

Global Industry Classification Standard (GICS) of S&P has been used

CS MARKET LIQUIDITY (1)

Total KASE turnover for 6 months of 2008 in shares – USD 1,784.2 m,in corporate bonds – USD 1,205.5 m

4,1

2,9

8,9

2,5

0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 June

2008

Corporate bonds

Shares

Turn

over

, USD

bn

Total KASE turnover for 6 months of 2008 in shares – USD 1,784.2 m,in corporate bonds – USD 1,205.5 m

4,1

2,9

8,9

2,5

0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 June

2008

Corporate bonds

Shares

Turn

over

, USD

bn

CS MARKET LIQUIDITY (2)

Average daily KASE turnover for 6 months of 2008 in shares – USD 13.0 m,in corporate bonds – USD 9.7 m

0

20

40

60

80

100

120

140

160

2004 2005 2006 2007 2008

SharesCorporate bonds

Daily

turn

over

, USD

m

Average daily KASE turnover for 6 months of 2008 in shares – USD 13.0 m,in corporate bonds – USD 9.7 m

0

20

40

60

80

100

120

140

160

2004 2005 2006 2007 2008

SharesCorporate bonds

Daily

turn

over

, USD

m

MAIN PROBLEMS OF THE MARKET

The main problems are:• lack of free-float equities (the heritage of case-by-case

privatization)• conservative policy of the main domestic investors ("buy

bonds and hold till maturity")

OUR INDEX

2 609

(30.06.08)

2 856

(19.07.07)

2 387

(20.08.07)

1 589

(05.06.06)

2 808

(12.02.07)2 394

(19.04.06)

2 858

(21.02.08)

0

700

1400

2100

2800

3500

4200

01

.01

.05

01

.04

.05

01

.07

.05

01

.10

.05

01

.01

.06

01

.04

.06

01

.07

.06

01

.10

.06

01

.01

.07

01

.04

.07

01

.07

.07

01

.10

.07

01

.01

.08

01

.04

.08

01

.07

.08

0

50

100

150

200

250

300

KASE Index

Market share deals volume, USD m.

682.0

216

(05.01.05)

689.3

503.3 391.6

KASE uses its own trading platform:

on-screen based electronic "Server – Client" system

remote access

electronic signature and electronic documents circulation

traffic encryption

on-line data saving

ON OUR TECHNOLOGIES

CONTACT US …

Internet: www.kase.kz

e-mail: [email protected]

phone: (+7 727) 237 53 00, 272 98 98, 237 53 11, 272 06 00

fax: (+7 727) 296 64 02, 272 09 25

address: 291/3a, Dostyk ave, Almaty, Kazakhstan