OREANDA-NEWS. March 03, 2010. In compliance with 2007-2010 Development Strategy Kazakhstan Stock Exchange (hereinafter - KASE) in 2010 started the project on the futures market instruments trades recommencement. The project goal is the KASE products line extension that will allow operating on the exchange investors forming more balanced risk portfolios, reported the press-centre of KASE.

Among advantages of the futures market instruments putting into KASE are as follows:

- possibility to insure basic assets change risks;

- possibility to turn a profit through arbitrary transactions between the spot-futures or futures-futures markets, and prices as well as other market parameters fluctuation;

- possibility to use the efficient financial trigger formed as results of turning a profit through the basic assets prices change with the data provision only on basic assets partial secure;

- possibility to put the general limit on the futures market deals on KASE, and not for each contractor, which is the over-the-counter market standard.

Previously KASE tried to launch trades in the futures market instruments, including the US dollar rate to tenge futures in 1996 and 1999, option contracts in 2000, the US dollar rate to euro futures in 2001, futures to the yield of international securities of the Republic of Kazakhstan in 2002, and deliverable futures for affined gold in 2008.

As a matter of fact, the exchange market existed only for mentioned initial instruments. On the rest the trades volume either insignificant or deal were not made as the market participants were not interested in these instruments, and the contracts basic assets low liquidity. In spite of the fact that the trades volume of futures of the US dollar rate to tenge grew from 1999 to 2004, the futures contracts market on KASE yet has died out. The most essential reasons that led to the futures market stagnation in 2004, as noted by KASE, are the basic assets prices high volatility, the risk management system inadequacy, and well developed over-the-counter inter-bank forward currency futures market.

In order to improve the futures market trades attractiveness and settlements safety, KASE intends to introduce the modern risk management system, having analyzed the international experience in this area and the leading world exchanges lessons learned. KASE plans to introduce the limits system to restrict prices deviation and participants maximum positions, as well as the margin and guarantee fund fees system aimed at timely settlements on deals in case of  a caused by one or several participants.                                    

In KASE judgment, at present the futures market most needed instrument is the futures of the US dollar rate to tenge due to the basic asset high liquidity. First of all shall be opened trades in this instrument.

In addition, during 2010 KASE plans to open trades in affined gold, traded on KASE the most liquid shares rate and KASE Index value futures.

In the sequel, other futures market instruments can be traded depending on the demand on behalf on KASE members and their clients.