Download UDK 336.76 Development mechanisms of the financial market of

UDK 336.76
Development mechanisms of the financial market of Kazakhstan
Taybek Zh.K., SarievaZh.A., Bekibaeva Sh. S., Mamytova K.K.
South Kasakhstan State University M. Auezov
Abstract
The financial market of Kazakhstan is the system of financial and economic relations arising in
the process of exchange of funds using cash as an proxy-asset .
Nowadays financial markets and financial structures have several types, such structural changes
occur by form of a financial instrument that is used in the international and foreign trade and by carrying
method of trading.
It is very important for us to consider the market belongs to this or any other category during the
classification of financial market.
The basic division of the financial markets depends on the fact exactly what kind of financial
instrument is used in trade transactions.
At the same types of financial companies and the financial mechanism of the market is complex
and important.
Keywords: Insurance, insurance market, insurance company, investment activity, securities
market, financial mechanism, financial crisis
Introduction
Financial market of Kazakhstan and the capital stock do not reflect the actual current state of the
economy and further reflection entirely, they do not provide funding, as generally sale and resale and the
game on the currency difference are taking place here.
Development of financial markets are prevented by defaults, the existence of money surrogates,
the continuing distrust of people in the financial and credit system and the existing financial institutions,
in particular the low level of financial literacy of the majority of Kazakh citizens.
There is no clear distinction between the primary and the secondary market yet, which is
represented in the major stock and commodity exchanges, absorbing the main flow of private securities.
In the current conditions of functioning of financial market the radical restructuring of the
banking and credit-monetary system is necessary for its orientation on the needs of the real sector of the
economy.
Research methodology
Kazakhstan slowdown of economic growth in recent years was largely due to a significant
reduction in domestic consumption of goods and services to the weakening of the national currency.
At the same time, despite the deterioration of certain external conditions, the adjustment of the
tenge exchange rate has supported economic growth with odd increase in net exports (similarly as for the
rest of the EAEU).
Sectoral trigger of GDP growth of both Kazakhstan and the rest of the EAEU countries continues
to be the services sector, despite a slight slowdown in the growth of their volumes in Kazakhstan.
For a full assessment of the financial sector we should get the detailed view of subject activities
of the financial market as a whole.
The insurance market of Kazakhstan is a special part of the overall financial market.
All kinds of insurance products and services are sold and bought in the insurance market. Most
of this demand reimbursement of financial and material expenses, a total loss determines the need for
financial and social relations between the parties in connection with the prevention, restriction and
overcoming all sorts of risks and losses.
The role of the insurance sector and the whole insurance market in the financial system of
Kazakhstan in general and in the financial market in particular is completely determined by two factors,
on the one hand there is an objective need for the insurance and financial protection and these procedures
lead to appearance of social-economic phenomenon - the development of the insurance market.
On the other hand, such monetary form of organization of the insurance market, as well as the
fund to ensure financial protection bind such market with a common financial market through insurance.
Insurance business is a prerequisite of the current social reproduction. The state and the insurance
sector can not provide material and social security of citizens without the insurance system, as well as
they can not systematize the field of material protection.
The volume of insurance premiums transferred to reassurance, and the aggregate amount of the
insurance premium amounted to 83 567.3 mln. tenge or 31.8% of the total.
100%
90%
80%
94.9
105.3
100.4
108.8
102
101.7
70%
unallotted income
60%
50%
34.9
27.5
41.9
37.2
23.4
22.1
104.3
112.8
128.5
128.9
2012
year
2013
year
2014
year
2015
year
the unallotted income for the
reporting period
40%
authorized capital
30%
20%
76.4
89.5
2010
year
2011
year
10%
0%
Figure 1 Shareholders equity of the insurance sector and their structure
According to the figure on the reporting day, the net profit of insurance companies amounted to
171 757.1 million. tenge, that in comparison with the previous year by 3.8 above.
The ratio of net profit on total assets amounted to (ROA) 24,2%. On balance the ratio of
shareholders' equity (ROE) amounted to - 24.0%.
The insurance market does not only dynamically influence on the process of expanded
reproduction, but also it influences actively through the insurance fund on financial flows in the economy.
Material form of organization of such insurance relations includes insurance in the general scope
of the financial market.
Money Marketis the system of economic and financial relations on the provision of cash and
credit for up to one year.
The system of economic relations on the provision of funds for a period exceeding one year was
named the capital market.
Money market, along with the capital market is part of more general financial category i.e. the
financial market.
At the moment there is taking place the mobilization of capital in the financial market, lending,
money exchange operations and allocation of financial resources in the production. A set of supply and
demand for capital lenders and borrowers in different countries form the global financial market.
The loan market of Kazakhstan is the economic space within which is taking place the process of
the movement of loanable money-capital in the form of loans. Loans and money are issued for urgency
conditions and repayment.
On the basis of this composition of participants involved in the process the credit market can be
divided into several types, firstly, monetary relations arise between the National Bank and commercial
banks.
The second-tier banks and their borrowers, legal entities and individuals who need loans
cooperate on the loan market.
The system of loan relations in Kazakhstan is built in order to improve the construction of the
entire country's banking system.
The National Bank of Kazakhstan is the main source of credit resources on the capital market,
providing loans to commercial banks and implementing currency issue.
If we talk about trends in lending in the current difficult times, the volume of issuance of new
loans to economy on the basis of the second half of 2015 decreased by 18.8% compared with the second
half of 2014, and amounted to 5090 bln..
Overall, the banking sector provided 9344 bn. loans to the economy in 2015, which is 11.8%
lower than in 2014. This show that banks are tightening lending programs.
On the retail lending market as in the first half of 2015, maintained the trend in the reduction in
activity. During the second half of 2015 the volume of new loans to the population decreased by 24.9%
compared with the volumes of extradition for the second half of 2014.
In recent years, the stock market was characterized by low liquidity due to the lack of highquality financial instruments, as well as the general stable trend to the decline of volumes in inner
organized stock market.
Actually bank loans are more often used as sources of funding by issuers, and as an investment
tool by people.
With limited resources funding continued to be the main factor to reduce or delay the current
supply and demand in the segment of retail lending.
The domestic market was characterized by a large number of government securities issues in
circulation, and in conditions of low trading activity could not serve as a reliable basis for the
construction of the yield curve necessary to determine the "risk-free" benchmark in the securities market.
The condition of the environment has become a major determinant of financial stability in the
Republic of Kazakhstan. Risks emanating from Russian Federation, the largest trading partner and
member of the Customs Union and Common Economic Space associated with the sanctions entered
against it, significant fluctuations of the ruble exchange rate and the overall deterioration of the economic
situation in the Russian economy, were intensified by the sharp and widespread decline in world oil
prices.
In 2016 the financial market of Kazakhstan was characterized by a high degree of volatility as
the volume of transactions and the rates and yields of various financial instruments, at the background of
which were formed the conditions for amplification of the speculative behavior of market participants,
unmotivated by operating necessity of economic agents.
In general, good tendencies are mentioned by all types of financial market trends. In addition, it
should be noted that the negative dynamics was recorded in prices for these shares on foreign stock
markets.
Moreover, if the reducing cost of stocks of Kazakhstan's companies were dictated by the negative
exchange rate expectations of investors, then in foreign markets decline was due to, on the contrary, longterm expectations of investors, based on macroeconomic factors that are emerging in Kazakhstan, such as
slowing GDP growth rates, a drop in energy prices, which are the main export facilities, and a decrease of
sovereign credit ratings, etc.
Conclusion
In conclusion, we can say that the financial sector of Kazakhstan, which possesses unique natural
and financial potential of development, becomes the basis for development of country into the global
economic environment, the factor of the external economic and foreign matter in the long term. In
prospect it should create not only additional tools to overcome social and economic problems of farm
differentiation and increase the competitiveness of regions, but also should increase the sovereignty of the
country in a globalizing economy and provide alternative means of its economic progress and
stabilization of economic growth.
Reference
1. Zykova M. E. Marketing in insurance business // Moscow, 2012 y.
2. Arkhipov A.P. Insurance: textbook / A.P.Arkhipov. - M .: KNOURS, 2012 y.-288 p.
3. "Sentras Insurance" statistics. Almaty-2015.
4. Statistical data of national bank of RK. 2016.