Investing for beginners: how to get started

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Getting started investing requires a wise approach. And it doesn’t matter at all how much money you have. The key to success is planning and having a specific goal, financiers say. The topic of investment is gaining popularity among Kazakh residents. The Kazakhstan Stock Exchange (KASE) calculations confirm this trend. At the end of July alone, it registered 180,000 individual accounts opened for investment in securities. That’s almost 50,000 more than it was at the beginning of the year.

“The KASE representatives are very happy about this dynamic, which is quite indicative. In our view, it is primarily related to two factors. First, it is the growth in the financial literacy of individuals. Also, in the last year and a half or two, we have seen a very high rate of digitalization of brokerage services. These include the creation of mobile applications by brokerage organizations, as well as the possibility of remote client identification and remote opening of accounts,” said Natalya Khoroshevskaya, Deputy Chairperson of Kazakhstan Stock Exchange.

Despite this, the list of tools for investing in the local stock market remains limited, and some are not available at all. That is why Kazakh residents have to go to foreign platforms. It is rare for domestic companies to go public, although this could have a beneficial effect both on their financial condition and on retail investors.

“When there are more private players in the market, the shareholder always makes sure that everything works well and that the company’s capitalization grows. Private property is always better and much more efficient than public property. When it’s in private hands, then everyone, the employees, the owners and the top management, is always interested in good performance,” noted Arman Batayev, founder of Finmentor.kz.

According to Arman Batayev, most Kazakh companies have the potential to go public. However, few people use it. The reason is that the public status required by an IPO is not in the interests of top management.

“As a rule, abroad, it is possible to buy shares that are traded on the stock market at a discount or at a low price. And therefore top management is always interested in the company's IPO, so it can ensure the growth of these options, shares. Unfortunately, these amendments have not been made in our country,” Batayev added.

Experienced players recommend Kazakh residents who have decided to invest not to waste time. The situation on the market is favorable. However, skilled investors recommend investing not in a single company, but in a pool, and no more than 20 percent of the available capital.

 

Translation by Assem Zhanmukhanova

Editing by Galiya Khassenkhanova