Kazakhtelecom's stock registered a significant drop, exceeding 50 percent.

Kazakhtelecom's stock registered a significant drop, exceeding 50 percent.

The Kazakhstan Stock Exchange (KASE) has temporarily halted trading in the preferred shares of JSC "Kazakhstan Telecom" due to a substantial price decrease. According to a report by the exchange, the last executed deal on May 23, 2025, saw the shares priced at 50,330.00 tenge each, whereas trading was halted on May 26, 2025, following a deal at 23,800.00 tenge per share.

The suspension of trading in the premium category of KASE-listed "Kazakhstan Telecom" shares follows a decrease of 30% or more from the previous trading day's closing price. The trading halt is--as per the rules of exchange trading--automatically implemented in KASE's main trading modes.

The sharp decline in the preferred shares was likely due to news regarding dividend payments, as suggested by Damir Seisebaev, Director of the Asset Management Department of JSC "UD Capital." The decrease in share price was apparently a result of a relatively small number of shares being sold, which established a discount based on historical trends.

Further analysis reveals a similar situation occurred in January 2025, when the price of "Kazakhstan Telecom's" preferred shares dropped by 33.09%. At that time, the decrease was attributed to low liquidity and investor behavior on the market.

On May 22, 2025, ordinary shares of "Kazakhstan Telecom" experienced a 31.51% decrease. This decrease was linked to investors fixing profits after the record date for dividend payments.

Preferred shares are types of shares that offer fixed dividends and are generally less risky compared to common shares, although they typically do not carry voting rights. Additionally, some preferred shares can potentially be converted into common shares.

The decision to resume trading in these shares will depend on an assessment of the underlying factors causing the suspension and a review of the current market situation, as per the rules governing exchange activities on KASE.

It is worth noting that "Kazakhstan Telecom" shares are part of the KASE Index, which also includes shares from nine other companies: "Air Astana," "Bank CenterCredit," "National Bank of Kazakhstan," "Kcell," KEGOC, "National Company "KazMunaiGas," Kaspi.kz, "National Atomic Company "Kazatomprom," "KazTransOil."

Additionally, the Agency for the Protection and Development of Competition launched an investigation into "Kazakhstan Telecom" regarding allegations of monopolistic high prices for internet services.

Recently, Power International Holding (PIH) from Qatar purchased a 100 percent stake in LLP "Mobile Telecom-Service" (including Tele2 and Altel) from "Kazakhstan Telecom."

[Enrichment Data]:

1. The recent volume of trading on KASE has been influenced by a combination of broad market conditions, the nature of preferred shares, Kazakhstan's economy with its heavy reliance on commodities, specific company-related or regulatory factors, and index and market structure impacts.
2. Preferred shares are similar to fixed-income securities, featuring fixed dividends and limited voting rights. Their price sensitivity to changes in interest rates, credit risk perceptions, and inflation may contribute to the decline observed in Kazakhstan Telecom's preferred shares.
3. The Kazakhstan economy's dependence on oil and commodity prices, as well as forecasts pointing to downward pressure on oil prices in 2025, can influence Kazakhstan Telecom’s earnings, investor confidence, and, consequently, stock performance.
4. Regulatory concerns such as corporate governance issues, market reforms, or liquidity problems specific to Kazakhstan Telecom or the telecom sector within Kazakhstan may have played a role in waning shareholder confidence leading to the sell-off in the preferred shares.
5. The structure of the KASE Index and associated trading requirements could potentially affect liquidity and demand for preferred shares, with reclassification risks or reduced eligibility for index inclusion possibly contributing to reduced institutional investor interest, which in turn can trigger price declines.
6. The temporary halt in trading of "Kazakhstan Telecom's" preferred shares on KASE, as a result of a substantial price decrease, may be indicative of a larger trend in the finance and business sector, suggesting a need for careful investing in the stock-market.
7. In light of the regulatory investigation against "Kazakhstan Telecom" for allegations of monopolistic high prices for internet services, investors may want to consider the potential risks and rewards before making investments in this business.

Read also: