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27STOCK MARKET INSTRUMENTS AS AN EFFECTIVE CATALYST FOR INCREASING THE INVESTMENT ACTIVITY OF ENTERPRISES
Abdikerimova G.,
candidate of Economic Sciences, Associate Professor M.Auezov South Kazakhstan State University, Shymkent, Kazakhstan
5 Tauke Khan Street Kydyrbayeva K. doctoral student, 8D04110 M.Auezov South Kazakhstan State University, Shymkent, Kazakhstan
5 Tauke Khan Street
Abstract
The article examines the problems of the development of investment processes, using the tools of the stock market, taking place in Kazakhstan. The theoretical aspects of the relationship between savings, investment and economic growth in the framework of various economic schools are considered, and the patterns that influence the formation of investment processes are summarized. The article substantiates the need to increase the importance of using the mechanisms of the financial market of the Republic of Kazakhstan in order to transform savings into investments. The paper identifies the key trends and shortcomings in the development of investment processes in Kazakhstan, and reveals the disproportions in the development of the Kazakhstan securities market. The dynamics of a number of key indicators are given: the ratio of own and borrowed funds in the structure of sources of financing for investment activities; the structure of investments in fixed assets attracted using securities market instruments. The functional role of the Kazakhstan securities market as a mechanism for the transformation of savings into investments is evaluated, and emphasis is placed on the need to give it an investment orientation.
Keywords: stock market, investment, securities, efficiency, stock market instruments, globalization.
Investing in the financial market provides greater opportunities for diversification of investment activities. Industry diversification involves investing in financial instruments of issuers of various industries. In developed markets, there is a growing opportunity to benefit from investing in such industries as software manufacturing, healthcare, and banking.
The globalization of the financial market is reflected in the development of the diversification capabilities of global institutional investors. In developed markets, there is considerable interest among institutional investors in investing in hedge funds and exchange-traded funds. Financial risk becomes global. The interconnection of the Kazakhstan financial market with the rest is being strengthened.
Investment management is an important area of the company's activity. Its main goal is to ensure the maximum possible profit in the current or long-term periods. This requires the development of management tasks that allow the implementation of investment objectives, taking into account a certain level of riskiness and liquidity of investments, as well as providing the possibility of rapid reinvestment of capital, in the event of changes in internal and external factors, the possibility of implementing social development programs. Thus, the implementation of financial and real investment management is important for achieving or maintaining a stable position and strong positions in the financial market [1, c. 335].
The implementation of investment activities is associated with the refusal of the company from part of the current profit, investing it in its own development, in projects, in securities or cash, counting on the return on these investments in the future. For financial investments, it is more typical to use temporarily available
funds to purchase securities that can be sold in a short time, in case of a need for cash. Capital investments, to a greater extent, are focused on the long-term development of the company, often, for their implementation, it is necessary to attract funds from various borrowed sources. The company also has the opportunity to use financial market instruments in order to attract funds, in order to finance its development or current activities [2, c. 94].
It is important to emphasize that the Kazakhstan market for financial investments is characterized by a fairly high level of risk, as well as low liquidity of most financial instruments. The return on investment in securities can often be lower than on alternative investment options. These factors make the stock market unattractive for investment investments.
One of the methods to increase the inflow of investment resources in the financial market is to expand the ways of making investments for a wider range of potential investors. To achieve this, various methods can be used, one of which is the development of mutual investment funds, which allow you to accumulate the funds of potential investors through the sale of shares, and carry out investment activities with their help. By accumulating significant amounts of cash, mutual funds are able to make larger investments. The advantage of this method of investment is the availability of investment for persons who do not have special knowledge about the functioning of the financial market.
At the moment, there is a positive trend in the growth of the capitalization of mutual funds, but their share in the total volume of financial investment is not large. This is due to the lack of awareness and financial literacy of potential investors, as well as the unstable
economic situation that prevents the formation of free cash or savings.
More active involvement of investors in the activities of funds is required, which can be achieved by publishing information about the activities of these funds, their advantages, ways of making investments and the benefits received by depositors.
The activities carried out will contribute to the implementation of the re-distribution function of the financial market, and the companies that have received investments will have more opportunities for development. In the future, this may lead to an increase in the efficiency of the financial market as a source of investment formation, since an increase in the number of transactions with securities contributes to an increase in their liquidity, which is one of the factors of market competitiveness.
The implementation of these measures requires the participation of the State. The situation in the financial market is unfavorable, and self-regulation of the market is not effective. To mitigate the manifestations of the crisis situation, state intervention is necessary, and the application of the Keynesian economic model is currently quite relevant.
Today, the financial market is part of the global financial and economic instability, the origins of which are located outside of Kazakhstan [3, p.122]. Over the past decades, the republic has become economically stronger and has successfully integrated into the world markets in many positions, in particular, it should be noted the high degree of integration of the banking system into the world financial system. At the same time, it should be noted that this integration process was accompanied by an excessive increase in external borrowing and, as a result, increased vulnerability of the national economy to external risks.
In modern conditions, the directions of development of the financial sector should take into account the
changes taking place on a global scale. Against the background of the strengthening of integration processes, coordinated unified approaches to the regulation of national financial markets are being developed [4, p. 6]. The Republic of Kazakhstan and its financial market do not remain independent of global trends. The best international practices and regulatory standards are being actively implemented.
In accordance with the adopted Concept of Financial Sector Development until 2030, the goal is to create a competitive financial sector and increase its efficiency in the redistribution of resources in the economy on the basis of the best international standards, including the OECD standards. This task is expected to be achieved in several stages.
The analysis allows us to conclude that market regulation is objectively necessary in Kazakhstan. First, it is directly related to the urgent need to find resources to finance urgent needs, both for public sector enterprises and for private entrepreneurs. Secondly, to finance the state budget. Third, due to the formation of new indirect mechanisms of control over the money supply by the National Bank of the Republic of Kazakhstan.
The main indicator of the state of the securities market is the indicator of its capitalization. As can be seen from the presented data, the capitalization of the non-state securities market is characterized by unstable trends. The decline in indicators occurred in 2014-2020 as a result of the emerging negative trends in the global capital markets.
As of October 1, 2020, the total capitalization of the KASE stock market amounted to about 32 trillion tenge, or 46% of GDP (Figure 1), of which 17.7 trillion tenge is accounted for by the capitalization of the stock market, and 14.3 trillion tenge is accounted for by the volume of corporate debt in circulation.
bonds —*— ratio to GDP. % (light axis)
Pic.1. KASE capitalization
Since 2014, KASE's capitalization has grown by 286%, increasing both due to the growth of the stock market by almost 4 times, and due to the growth of the bond market by 2 times. The growth was caused by an increase in the number of shares from 79 to 138 issues and bonds from 75 to 261 issues in the official list of
KASE and an increase in their value. The capitalization of the AIX stock market is about 6.9 trillion tenge.
According to the World Bank statistics, in 2019 Kazakhstan is at the level between the countries of Central Europe and the Baltic States and Turkey (Figure 2).
According to the GIC/WEF report for 2019, Kazakhstan ranks 68th out of 141 countries in terms of
KASE's market capitalization to GDP, which is significantly higher than the comparative indicators for other sectors of the financial sector of Kazakhstan (for example, in terms of «Loans issued to the private sector to GDP» (93rd place) or «Insurance premiums to GDP» (113th place).
In the ranking of the World Federation of Exchanges, according to preliminary results for May
2020, KASE ranks 47th in terms of market capitalization among all stock exchanges that are members of the World Federation of Exchanges.
Information on AIX is not available, because as of today, the AIFC exchange is not a member of the World Federation of Exchanges.
Cyprus Hungary Kazakhstan Center.Europe Sri Lanka Oman Tunisia Turkey Pic.1. Equity market capitalization to GDP, in %
The subsequent improvement of Kazakhstan's position in international rankings in terms of market capitalization can be achieved, to a greater extent, by conducting new IPOs on the domestic securities market, or by increasing the market capitalization and value of companies already listed on the stock exchange.
Currently, the total number of active issues of securities registered in the State register of equity securities is 1,638. The KASE list includes a wide list of securities and other financial instruments available to investors, including: 138 issues of shares and 3 issues of GDRs; 261 issues of corporate bonds, of which 43.8% are Eurobonds, 66.5% are quasi-public sector bonds.; 271 issues of government securities, of which 125 issues of the IFC, 99 issues of municipal bonds of local executive bodies, 24 issues of short-term notes of the NBK and 23 issues of government securities of foreign states, such as the Sultanate of Oman, the Russian Federation, the Turkish Republic, Ukraine and the United States; 30 issues of securities of MFIs, such as the
Pic. 2. IF investment portfolio as of 01.01.2014
EBRD, the Asian Development Bank, the Eurasian Development Bank and the International Finance Corporation; 9 issues of investment fund units and 4 issues of ETFs, of which one is on the KASE index; 281 types of automatic repo with different maturities and securities pledged; 5 currency pairs and 6 types of futures.
Additionally, the AIX listing today includes 10 issues of shares/GDRs, of which 5 issues are dual-listed, i.e. the AIX exchange is not the main exchange for trading these securities, 15 issues of bonds, including IFRC euro notes and 34 bonds intended for private placement, 7 issues of securities of the ETF/ETN funds.
The assets of investment funds invested in securities amounted to 128.4 billion tenge. A significant part of the assets of investment funds invested in securities were investments in non-state securities of foreign is-suers-75.7%, investments in non-state securities of issuers of the Republic of Kazakhstan made up 14.8% of the investment portfolio (Figure 3).
SsB RK
Pic. 3. IF investment portfolio as of01.10.2020
Compared to the beginning of 2014 (Figure 4), the share of non-state securities issued by the Republic of Kazakhstan increased from 5.3% to 14.8% and the share of non-state securities issued by foreign issuers decreased from 83.8% to 75.7%.
In 2018, a number of measures were implemented aimed at activating collective forms of investment by liberalizing the legislation regulating the activities of investment funds. In particular, the requirements for the creation and operation of investment funds have been simplified, namely, the requirements for the minimum size of the assets of a mutual investment fund and the number of unit holders have been eliminated, the investment opportunities of investment funds have been expanded by revising the investment limits, and restrictions on the investment of assets of a risk investment fund and a real estate fund have been eliminated.
In the future, it is planned to continue the policy of liberalizing the legislation on investment funds in order to activate collective forms of investment, including by providing access to the placement and circulation in the trading system of the stock exchange of shares and units of investment funds of risky investment, liberalizing restrictions on the investment of assets of investment funds in financial instruments.
Currently, almost 129.4 thousand accounts are open to investors in the Central Securities Depository (Figure 20), of which 127.3 thousand are open to individual investors.
In many respects, the increase in the retail investor base was achieved due to the IPO of two Kazakhstani companies: in 2012 - «KazTransOil» JSC and in 2014-KEGOC JSC within the framework of the state program «People's IPO». As a result of these IPOs, the retail investor base increased by 76 thousand accounts.
In order to attract investors to the stock market and simplify the terms of trade, since 2016, brokers have been able to provide electronic client services, which simplified access to the market for regional investors and allowed investors to trade financial instruments on the Kazakhstan stock market using remote access systems. Today, the number of ECB clients who use electronic services and trade through direct access systems is about 63 thousand, or 50% of the total number of investors.
In the future, it is planned to increase the share of retail investors through the privatization of national companies on the stock market, as well as increase the level of penetration of brokerage services among the population through the introduction of new tools for establishing relationships remotely.
Thus, as studies show, the lack of development of the securities market leads to a number of adverse consequences for the financial industry in particular, and the economy of Kazakhstan as a whole. One of these negative influences is the acute shortage of long-term financing (for a period of more than five years) for the real sector of the economy, there is a shortage of «long money». Currently, the sources of long-term financing are mainly used as loans: from state financial organizations and from commercial banks (to a lesser extent).
However, the developed stock market, as the world practice has shown, can effectively solve the problem of the shortage of long-term financing, especially for capital-intensive projects. And the securities market in Kazakhstan, of course, has a significant potential for development.
The Kazakh market is dominated by the situation when large shareholders buy large blocks of shares in companies in order to maintain control over the companies. In the future, these shares are not sold. Thus, in accordance with the norms adopted by international analysts, we can assume that these shares are simply not present on the market. With bonds, the situation is similar-institutional investors hold them, as a rule, until they are extinguished. This indicates the absence of a speculative component in the Kazakhstan securities market and the isolated nature of transactions with securities.
The peculiarity of the Kazakh economy is that the financing of the development of enterprises is carried out mainly at the expense of the own funds of the enterprises themselves and at the expense of loans received from second-tier banks.
In recent years, important quantitative and qualitative changes have taken place in the country's economy as a whole and in the financial market. The evidence supporting these changes is the recognition by the European Union and the United States of Kazakhstan's economy as a market economy and the assignment by three leading reputable international Agencies-Moody's, Standard & Poor's and Fitch [5, p. 122].
The effective functioning of the stock market in Kazakhstan is hindered by a number of problems. Some of them are systemic in nature, reflect the relative youth of the Kazakhstan securities market and suggest equally systematic measures to overcome them. Others are more of a local temporary nature and are associated with the impact on the market of the global financial crisis that broke out two years ago, the impact of which is still noticeable today.
Among the main factors constraining the development of the securities market:
- impact of negative macroeconomic trends;
- increasing trends of globalization, manifested in the mutual penetration of stock market instruments outside the country;
- insufficient performance of rating agencies that determine the pricing of stock instruments;
- high transaction costs, complex listing procedures, the need to pass an audit;
- the reluctance of the founders to lose control of the company as a result of the «dispersion» of the share capital with the additional issue of shares-this explains the fact that most of the issues, unfortunately, are of a technical nature;
- lack of understanding of management about the feasibility of companies entering the stock market through the issue of corporate securities;
- incorrect pricing, yield on securities does not reflect the real state of affairs of issuers;
- imperfect technical infrastructure, lack of qualified intermediaries, small number of listed companies.
References
1. Overview of Dow Jones Averages // www.djaverages.com, 2016. P.12
2. FIA Annual Global Futures and Options Volume: gains in North America and Europe offset declines in Asia-Pacific//www.fimag.fia.org, 2016. P.81
3. Buitron, Carolina O and Esteban Vesperoni. Spill over Implications of Differences in Monetary
Conditions in the United States and the Euro Area. International Monetary Fund, 2015. P. 112
4. Handbook of modern finance. Editor d.e. Logue. Warren, Gorham&Lamont. Boston - New York, 1984, c. I-32
5. Mark Aarons, Vlad Ender, Andrew Wilkinson. Securitization Swaps: A Practitioner's Handbook. - January, 2019, P.232
ECOLOGICAL TAX: ESSENCE, CALCULATION METHODOLOGY AND ACCOUNING
REPRESENTATION
Podolianchuk O.
Candidate of Economic Sciences, Associate Professor, Head of the Department of Accounting and Taxation in the Fields of the Economy, Vinnytsia National Agrarian University
Abstract
The article examines the essence of the environmental tax, its components and functions. The interrelation of the main factors in the field of ecological taxation is determined. The state of emissions of pollutants and carbon dioxide into the atmosphere for recent years has been assessed, the dynamics of the ratio of the environmental tax to the indicators of tax revenues and gross domestic product has been analyzed. The low efficiency of the ecological tax and the system of ecological taxation in general has been established. The composition of environmental tax payers is described, the object, tax base, calculation mechanism and the procedure for forming a tax return are revealed. A critical assessment of the essence of environmental accounting and accounting of environmental activities. Taking into account the research of scientists and their own opinion, the objects of accounting for environmental activities are identified and a system of analytical accounts for accounting for environmental tax liabilities is proposed.
Keywords: ecological tax, accounting, environmental accounting, Environmental activities, accounting for ecological.
Formulation of the problem. The current business conditions of business entities are unbalanced, preference is given to the economic component with the secondary social and environmental relations. The latest technologies and the development of society affect the environmental problems associated with the preservation and restoration of the natural environment. They occupy an important place among the global problems of mankind to ensure compliance with the priorities of sustainable development. One of the traditional and effective tools used by governments around the world to reduce the harmful effects of economic activity on the environment is resource payments, which include environmental taxes and rents.
The environmental tax is currently considered as one of the incentives for the rational use of nature and is the subject of research by scientists in various fields.
The purpose of the study is to reveal the essence of the environmental tax, its components and accounting generalization.
Analysis of recent research and publications. The study of problematic aspects of environmental taxation, accounting for environmental activities and tax liabilities is devoted to the work of many scientists: Gangal L.S., Gnatieva T.M., Deria V.A., Zamula I.V., Lepetan I.M., Ocheretko L.M., Prokopishina O.S. and others. Taking into consideration the importance of sci-
entific developments, the issues of accounting for environmental tax are relevant, because accounting information is a source of management decisions for sustainable development of the enterprise.
Presenting main material. The history of the environmental tax dates back to 1920, when economist A.K. Pigou introduced the idea of environmental taxation. The purpose of this was to influence the behavior of those responsible for environmental pollution through taxes, as well as to stimulate environmental activities through certain subsidies. In 1973, the European Union introduced an environmental action program that provided for the "polluter pays" principle. European countries have begun to actively apply the practice of environmental taxation. In Ukraine, the environmental tax was first introduced in 1992 and has undergone a difficult path of formation, as it was regularly changed and clarified (change of name, object of taxation, rate, intended use, procedure and collection authorities, etc.). During its existence, it was replaced by a fee for environmental pollution and a fee for environmental pollution. After the adoption of the Tax Code of Ukraine, the environmental tax was re-enacted and today we have a clear legal definition of the environmental tax and its basic elements.
According to Art. 14.1.57 of the Tax Code of Ukraine (TCU), environmental tax - is a national obligation payment, which copes with the actual volume of
