Raising Capital

The decision to suspend the circulation of securities is directed by the authorized body of the issuer, the registrar and the central depository.

Registrar and Central Depository shall suspend the registration of securities transactions, the circulation of which is suspended in the system registry of holders of securities and accounting nominee of the notification of the authorized body to suspend the circulation of securities.

The nominal holder shall, within twenty-four hours after receiving notification of the central depository notify his client about the suspension of registration of securities transactions on the client's account in the accounting system of nominee securities.

After the elimination of violations of renewal of registration of securities transactions in the system registry of holders of securities and accounting nominee securities shall be made by written notice to the authorized body, directed by the issuer, the registrar and the central depositary not later than three calendar days after the decision to renew the registration of transactions with securities.

The decision to cancel registration of shares traded on the secondary market of securities, made by the authorized body in relation to the general meeting of shareholders of joint stock company for cancellation of share issue in the case of company restructuring (except adherence to this joint-stock company of another legal entity, or evolve from this company of a new joint stock company) or liquidation.

For cancellation of registration of shares the issuer shall submit to the authorized body:

1) copy of a court decision to invalidate the state registration of authorized shares or compulsory liquidation (reorganization of the issuer) or a copy of the minutes of the General Meeting of Shareholders (the decision of the shareholder, which owns all the voting shares) company to cancel registration of authorized shares in connection with the reorganization or liquidation of the company ;

2) a certificate of state registration of authorized shares of authorized shares issue prospectus, reports on results of placement of shares and notice of the authorized body approving the report on placement of shares.

Conditions and procedure for cancellation of registration of authorized shares established regulations of the authority.

Prohibited from committing civil transactions in shares, the issuance of the authorized body which decided to cancel.

The issuer shall, within seven calendar days from receipt of notification of the authorized body of cancellation of share issue to publish this information in a printed publication in Kazakh and Russian languages.

The decision on cancellation of share issue directed by the authorized body of the issuer, the registrar and the central depository, which must of receipt of notice of cancellation immediately produce a suspension of the registration of all securities transactions, the issue of which was subject to cancellation.

Procedure for termination of register of holders of securities in connection with the cancellation of registration of authorized shares established regulations of the authority.

In the period of equity securities in the secondary market securities, the issuer must comply with the established laws of the Republic of Kazakhstan and the prospect of issue of securities order of payment of income on securities.

Income on equity securities and bonds in nominal value of redemption shall be paid to persons who are entitled to receive them at the beginning of the last day of the period for which these payments are made (at the time in place of the registrar, which maintains the register of holders of securities) .

Payment of income on equity securities and bonds' face value at maturity by the issuer of their own or through the services of Paying Agent.

Conditions and procedures for payment of income on government securities the issued by the Government of the Republic of Kazakhstan, National Bank of Kazakhstan or local executive bodies established by legislation of the Republic of Kazakhstan.

The decision on the election of the paying agent for payment of income on non-equity securities and corporate bonds face value at maturity taken by the authority of the Issuer in accordance with its charter.

If a decision on the use of a paying agent prospectus issue of securities shall contain the following information about the payment agent:

1) The full name of the paying agent;

2) location and details of the paying agent and all its branches, which will carry out the payment of income (bonds' face value) of securities.

If you change the paying agent the issuer is obliged to make changes to the prospectus of securities issue and submit them to the authority for registration within seven calendar days from the date of such change.

In the case of non-payment and partial payment of the fault of the issuer's income from equity securities and bonds' face value at maturity of the issuer is obliged to pay the holders of securities the amount of the principal obligation and the penalty for each day of delay, calculated on the basis of the official refinancing rate of the National Bank of Kazakhstan on day of the monetary obligation or respective part. [7, c.53]

 

 

2.2 Issue and conversion of bonds

 

Issuer, created in the legal form of joint-stock company shall have the right to issue bonds within the bond program under the following conditions:

1) do not have the facts of default;

2) to break-even operations for the past three years;

3) comply with the requirements of the auction for issuers applying for the inclusion of bonds issued within the bond program, a list of the auction.

The Issuer may carry out a variety of structure bond issues within the bond program.

Requirements for the conditions and procedure for early repayment of bonds issued within the bond program, the special conditions and restrictions to be executed by the issuer, issuing the bonds within the bond program, established by prospectus bond program.

The Issuer shall be entitled to a subsequent bond issue, when you contact them previously issued bonds in the secondary securities market of the Republic of Kazakhstan with regard to the specifics, if the issuer to comply with one of the following conditions:

1) the date of submission to the authority of documents for state registration of the bond issuer has the minimum required rating from one rating agency in accordance with the requirements established by regulations of the authority, and for the most recent quarter prior to submission to the authority of documents for state registration bonds, the value of leverage does not exceed two and will not exceed that amount as a result of placement of the new issue of bonds;

2) the newly issued bonds are mortgage bonds;

3) the date of submission to the authority of documents for state registration of the bond issuer has no cases of failure or untimely performance of obligations to repay previously issued bonds or payment of interest on the bonds in circulation on the secondary market.

The bank or organization that carries out certain banking operations, shall be entitled to a subsequent issue of bonds previously issued for circulation of bonds on the secondary market, subject to the requirements established by regulations of the authority.

The issuance of bonds with maturities of three months or less shall be entitled to the issuer whose securities are listed on the Stock Exchange the highest category of listing.

Placement and circulation of bonds with maturities of not more than three months are provided in the Trading System Stock Exchange.

Conditions and procedure for state registration of the bonds with maturities of three months or less established regulations of the authority.

Issuer, created in the legal form of joint-stock company shall have the right to issue convertible bonds. Possibility to issue convertible bonds shall be provided by the charter company.

Conversion of bonds into shares of joint-stock company is conducted in accordance with the terms and procedure of converting bonds into shares of the issuer's prospectus set the bond issue. [8, c. 197]

 

 

2.3 Investment Capital

 

Financial resources are used now to fund current spending and investment. Investment is the use of financial resources in the form of long-term investment capital (investment). Investments are made legal or natural persons who in relation to the degree of commercial risk fall on investors, entrepreneurs, speculators, the players. Investor - someone who by investing capital, mostly foreign, thinks primarily about minimizing risk, the intermediary in the financing of investment. Entrepreneur - a person who invests his own capital in determining the risk ..

Investments are risky (venture), direct, portfolio, annuity.

Venture capital - a term used to refer to risky investments. Venture capital is an investment in the form of issuing new shares, made in new areas of activity related to high risk. Venture capital invested in unrelated projects based on a quick return on investment. Investments are usually made through purchase of shares of the company-client or providing it with loans, including the right to convert these loans into shares. Risky capital investment due to the need to fund small innovative firms in the areas of new technology. Venture capital combines various forms of investment: loan, equity, business. It acts as an intermediary in the foundation of starting high-tech firms, called ventures.

Direct investments - investments in the authorized capital of the entity to generate income and eligibility for participation in running the business entity.

Portfolio investments relate to the portfolio and represent the purchase of securities and other assets. Portfolio - a set put together various investment property, employees instrument to achieve specific investment objectives of the investor. The portfolio may include securities of the same type (stocks) or the various investment securities (shares, bonds, savings and certificates of deposit, mortgage certificates, insurance, etc.).

Principles of formation of the investment portfolio are safety and return on investment, growth, liquidity of investments. Under the security presumes invulnerability investment to shocks in the market of investment capital and revenue stability. Security is usually achieved at the expense of profitability and growth investments. Increase investments may only shareholders. Under the liquidity of a financial resource is the ability to participate in the immediate purchase of goods (works, services). Thus, the cash have greater liquidity than the non-cash. A set of small denominations has greater liquidity than a set of large denominations. Liquidity of investment property - is their ability to quickly and without loss in value to turn into cash. The most illiquid real estate has. None of the investment property has all the properties listed above. Therefore, a compromise is inevitable. If the security is reliable, then the yield will be low, since those who prefer reliability, will offer a higher price and yield shot down. The main objective in forming the portfolio is to achieve the most optimum combination between risk and returns for investors. In other words, an appropriate set of investment tools designed to reduce the risk of the depositor to a minimum and at the same time to increase his income to the maximum.

Method for reducing the risk of serious loss is the diversification of the portfolio, ie the acquisition of a number of different securities. Risk is reduced when capital is distributed among many different securities. Diversification reduces risk by ensuring that potential low income single securities will be offset by higher income from other securities. Minimizing risk is achieved through the inclusion of portfolio securities wide range of industries not related closely to each other to avoid synchronization of cyclical swings in their business activity. The optimal value - from 8 to 20 different types of securities.

Considering the question of creating a portfolio, the investor must determine for themselves the parameters that he would be guided by:

- Choose the best type of portfolio, which come in two forms: a portfolio that focuses on obtaining a preferential income from interest and dividends, portfolio, aimed at the preferential growth of the market value of its constituent investment property;

- Rate is acceptable to a combination of risk and return portfolio and, accordingly, to determine the share of portfolio securities with different levels of risk and return. This problem stems from a general principle, which operates the stock market: the higher the potential risk is the security, the higher the potential revenue it should have, and vice versa, rather than income, the lower the rate of return. This problem is solved by analyzing the circulation of securities in the stock market. Mainly bought securities known corporations that have good financial performance, in particular, the large size of the share capital.

When buying stocks and bonds of a company investor should proceed from the principle of financial leverage. Financial leverage is the ratio between bonds and preferred shares, on the one hand, and ordinary shares - on the other.

Financial leverage is a measure of financial stability of the joint stock company, which is reflected in the yield of portfolio investments. The high level of leverage - the phenomenon is dangerous because it leads to financial instability.

- Determine the initial composition of the portfolio.

Depending on the investment objectives of the depositor may a portfolio that offers greater or lesser risk. On this basis the investor may be aggressive or conservative.

The aggressive investor - an investor who is inclined to a high degree of risk. In its investment activities, he focuses on the acquisition of shares. The conservative investor - an investor who is inclined to a lesser degree of risk. He gets mostly bonds and short-term securities.

- Select a scheme for further portfolio management. In this case, the following options.

Capital investment requires consideration of the processes of inflation and deflation. Inflation - the depreciation of paper money and non-cash, do not swap for gold. Inflation can be defined as an overflow channel of currency relative to the mass of commodities, resulting in a rise in prices. Inflationary processes occurring in the world constantly. If inflation is 2 - 3% per year, then it is usually called "soft" and it does not require any emergency measures. High inflation (10% or more per year) indicate the patient's economy. Deflation is associated with falling prices. Small rates of deflation - a great joy for consumers, but for the economy as a whole the appearance of deflation, an undesirable, since it leads to economic recession, a sharp deterioration in economic conditions, business and ultimately to stagnation in the economy, ie, an economic crisis. [9, c. 86]

Inflation is very painful for lenders and borrowers make life easier. Borrowers benefit from unexpected inflation, as they pay debts to cheap money.

 

 

2.4. Discounting of capital and income

 

Financial resources, material which are based on money, have a time value. Temporary value of financial resources can be viewed in two ways. The first aspect is connected with the purchasing power of money. Cash at the moment and after a certain period of time with equal face value have very different purchasing power. Thus, 100 m. after some time at the rate of inflation will be 50% of the purchasing power of only 50 tenge. In the present state of the economy and inflation funds not invested in investment activity or deposited in the bank, quickly depreciate. The second aspect is related to handling money as capital and revenue from that traffic. Money as quickly as possible to make new money.

The additional income is determined by the methods of discounting income. Discounting of revenues - bringing income to the time of investment.

Discounting of income used to assess future cash flows (profits, interest, dividends) from the position of the moment. An investor making a capital investment, guided by the following provisions. Firstly, there is a constant depreciation of money, and secondly, it is desirable to periodically flow return on capital, and in an amount not lower than a certain minimum. The investor has to evaluate how much income he receives in the future and what the maximum amount of financial resources allowed to invest in this case based on the projected rate of return. [10, c. 256]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONCLUSION

 

Any project that is initiated for commercial gain, is considered as a source of future income generated by investments made ​​during a one-time investment and costs of this nature.

 

In other words, a certain amount of liquid assets (depending on the sources of funding - their own, borrowed, borrowed) is transformed into the enterprise in the capital - fixed and circulating capital, designed to produce large volume of liquid funds in the course of its productive use.

 

In this study we examined the main ways to increase capital:

  - Issuance of securities;

- Issue and appeal bonds;

- Discounting of capital and income;

- Capital investment.

 

I must say that now occupies a special place commercial loans, leases, bonds, under which lenders serves no one but several individuals.

 

 

 

 

 

 

 

 

 

 

 

REFERENCES

 

1. Brigham Y., L. Gapenski Financial Management: Full course: In 2 volumes / translated. from English. ed. VV Kovalev. - St. Petersburg.: The School of Economics, 1997.
2. Van Horn, JC Fundamentals of Financial Management: Trans. from English. / Ch. Ed. YV Series Falcons. - Moscow: Finances and Statistics, 1996. - 800. - (Series on Accounting and Auditing).
3. Vilensky, PL, Livshits, VN, SA Smolyak Evaluating the effectiveness of investment projects. - M., 2002.
4. Banks and Banking: A Textbook for High Schools / Ed. EF Zhukov - Moscow 1997
5. The Act of January 8, 2003 № 373-2 «On Investment."
6. The Civil Code of the Republic of Kazakhstan. - Almaty, 2009
7. Banking: A Textbook for economic specialties universities / Ed. OI Lavrushina .- Moscow: Finances and Statistics, 2000
8. Biermann, S. Schmidt, Economic analysis of investment projects. - M., 2000.
9. VV Kovalev methods of evaluating investment projects. - M., 1998.
10. Finansovy Management: Theory and Practice: A Textbook / Ed. HH Stoyanova. - M.: Perspective, 1998.