FinEx ETF has launched the FinEx FFIN Kazakhstan Equity ETF (FXKZ RM) on Moscow Stock Exchange. The fund is the world’s first ETF to provide targeted exposure to the Kazakhstan equity market.
Oleg Yankelev, Chairman of AMC FinEx Plus in Russia
The ETF tracks the Kazakhstan Stock Exchange Index, known as the KASE Index, which is the country’s foremost equity market benchmark.
The KASE consists of just seven of the 130 companies listed in Kazakhstan and represents the performance of the largest and most liquid stocks traded on the exchange, weighted by market capitalization.
Four sectors are represented in the index: financials (Centercredit Bank and Halyk Savings Bank), telecommunications (KazakhTelecom and Kcell), commodities (KAZ Minerals and Kaztransoil) and energy (KEGOC).
Kazakhstan, which is classified as a frontier market by most major index providers, has the second largest stock market in the Commonwealth of Independent States as of end September 2018 owing to some outsized market performance over the past few years.
Between mid-January 2016 and the end of September 2018, the Kazakhstan stock market returned 174%. KASE’s 2017 return of 59% put it amongst the leading returns across all major stock market indices globally.
KASE’s market cap has increased by 3.7 times since 2014, reaching 16.7 trillion Tenge (around $45 billion) at the end of September 2018.
According to FinEx, Kazakhstan may provide a beneficial opportunity for investors due to a rise in raw materials prices as well as improved quality of corporate governance. In addition, the firm notes that Kazakhstan is set to benefit significantly from China’s ‘Belt and Road’ initiative, playing a pivotal role in its development.
Oleg Yankelev, Chairman of AMC FinEx Plus in Russia, commented, “ETFs are fundamentally access tools for all types of investors. With the launch of the FinEx FFIN Kazakhstan Equity ETF investors can now more easily access this exciting market. Kazakhstan is rich in natural resources and is increasingly seen as having important diplomatic and economic roles to play in China’s relationship with the rest of the world.”
FXKZ shares can be purchased through any broker providing access to the Moscow Stock Exchange.
US ETF issuer Global X filed a registration statement with the SEC for a Kazakhstan ETF back in 2011, along with 21 other mostly frontier market ETFs. But the fund never made it to market.