AIX Presents its Results for 1Q2024

Astana International Exchange (“AIX”, “Exchange”) is pleased to present its results for the first three months of 2024.

The AIX continues to demonstrate its resilience and viability as a business, surpassing expectations across all operational indicators. Consequently, it’s currently undergoing unprecedented growth in trading value, primarily fueled by robust activity in the block trading and corporate bonds market segments over the past few months. 

Assel Mukazhanova, CEO of the AIX, noted:

“We remain steadfast in our commitment to our strategic objectives and are dedicated to boosting trading volumes, which have demonstrated positive figures in the first three months of 2024. This strong start to the year motivates us to redouble our efforts and come up with business solutions that will effectively meet the needs of our clients.”

AIX results as of 1 April 2024:

• In the first three months of 2024, the trading turnover surged to over US$463 million, a remarkable 7-fold increase compared to the US$67 million recorded in the first quarter of 2023. This significant spike can be attributed to a series of block trades executed by international institutional investors, particularly those involving Polymetal International plc’s stock.
• As of now, the official AIX list boasts 165 securities offered by 101 companies, reflecting consistent growth with new listings escalating from 5 in the first quarter of 2023 to an impressive 21 in the same period of 2024. Since its inception, AIX has facilitated the raising of a total capital of US$4.8 billion.
• Presently, there are 37 trading members hailing from Kazakhstan, China, and various European countries, while the equity segment welcomes the addition of 3 new market-makers.

The ecosystem further expands with 13 custodians, including 3 international entities, and 10 global custodians directly or indirectly linked to AIX CSD.

IPO of Air Astana The highlight of the first quarter was the triumphal IPO of Air Astana JSC, the principal airline and the flag carrier of the Republic of Kazakhstan. The success of the IPO was clearly driven by the local retail investor base. It’s evidenced by AIX’s more than 29 thousand orders received for over KZT 100 billion, where half of that originated from retail investors.

The volume of orders on AIX for Global Depositary Receipts (GDRs) and shares amounted to $112.0m (equivalent of KZT50.6bn) and KZT49.6bn, respectively. As a result of the allocation, AIX investors have received GDRs worth of $71.6m (equivalent of KZT32.4bn) and shares totaling KZT15.6bn. Among those, the share of retail investors reached 56%, the share of institutional investors was 44%. 

Air Astana locally placed GDRs and shares totaling the equivalent of $215.0m, including $106.1m via AIX which comprised 49.3% of the total amount.

Over 3,400 applications received from retail investors via Tabys mobile app were satisfied for a total amount of more than KZT 500m.

As a component of the Air Astana IPO, the Astana International Exchange introduced a groundbreaking feature Kazakhstani investors known as a conditional trading, making a significant milestone in frontier markets.

This innovation revolutionized Kazakhstan’s stock market landscape by granting local investors the unprecedent opportunity to engage trading on the domestic exchange prior to the formal allocation of shares they subscribed to during the IPO. This unique offering encompassed both GDRs and Common Shares with settlements conducted in US dollars, fostering a new level of accessibility and flexibility for investors in the region.

Conditional trading volume (GDRs and shares) held for three and half days prior to unconditional trading on AIX was $7.8m within 1,998 deals.

The volume of Air Astana shares’ trading amounts to $22.1m over the course of two months since the IPO.

Block Trades

A block trade refers to a large order of securities being bought or sold, typically involving a significant number of shares or debt instruments for a substantial amount of money. These transactions are often arranged off the open market, directly between institutional investors, investment banks, or broker-dealers. Block trades are usually conducted to avoid impacting the market price of the security.

There is no obligation for AIX Trading Members to report negotiated deals to AIX. The negotiated deals are carried out in the Order Book and are automatically and immediately deemed to have been reported to AIX via the negotiated deal trade functionality of the AIX Trading Facilities. AIX reports to the marketplace the date and time of the trade, trade symbol of the Securities, trade price per Security, quantity of the Securities (volume), trade value in a dedicated Negotiated Deal Reporting section of its website at https://aix.kz/trading/block-trade-reporting/ on daily basis.

New products

The Exchange also launched a new debt product in October 2023 to help small and medium-sized enterprises (SME) use capital markets to obtain short-term tenge financing, subject to special conditions. Central Media Distribution LLP used this option to raise KZT1 bln. The nominal value of one bond is KZT1,000. The capital will be used for the business development of the Radio Lux FM, main asset of the company.

International cooperation

On 8 January 2024, the European Securities and Markets Authority (ESMA), which is the EU’s financial markets regulator and supervisor, recognized AIX as an eligible third-county trading venue for the purpose of transparency compliance under MiFID II / MiFIR. AIX was included into the positive assessed list of the ESMA’s Transparency opinion.

Being included in the ESMA’s positive assessment list implies that the European investment firms executing trades on AIX are exempt from the mandatory transaction reporting of such trades under MiFIR.

Reference:

AIX was formed in 2017 within the Astana International Financial Centre development framework. AIX shareholders are AIFC, the Shanghai stock exchange, the Silk Road Fund, and NASDAQ, which also provides the AIX trading platform. The exchange operates within a regulatory environment based on the principles of English Law, thus providing a reliable investment environment. The mission of AIX is to develop an active capital market in Kazakhstan and the region by providing clear and favorable conditions for attracting financing to private and public businesses. AIX develops special segments for mining companies as well as infrastructure projects under the Belt and Road initiative. www.aix.kz

The Astana International Financial Centre (AIFC) is an independent jurisdiction that started (AIFC) is an independent jurisdiction with a favourable legal and regulatory environment and a developed infrastructure for starting and doing business, attracting investment, creating jobs and developing Kazakhstan’s economy. www.aifc.kz