Kyrgyz Brokers Dream of a Trading Frenzy the Former Soviet Country Sets Up a Stock Exchange

Article excerpt

THEY have seen the news clips of smoothly analytical brokers and the frenzy of traders on the New York Stock Exchange floor.

They believe that the American stockbroker is "a well-trained professional who thinks only about the stock exchange and has no time for anything else."

"It is our dream to work like that," says Zhamal Dootayulu, one of eight young Kyrgyz brokers lounging at their desks around the otherwise empty floor of the Kyrgyz Stock Exchange.

This is probably the world's newest stock exchange, a key building block in transforming this new country's formerly Soviet economy into a functioning free market. It opened in May. Four companies are listed. There is even a kind of simplified mutual fund.

It isn't the Big Board in Manhattan, but when the average Bishkek resident wants to buy or sell shares of one of these companies, he or she can walk right onto the battered wooden trading floor of the stock exchange and execute a deal, no matter how humble. As many as 200 to 300 people at a time have crowded into the former conference hall.

Volumes are not large. The biggest trading day in recent months was 47,000 Kyrgyz soms in total volume - about $4,500. A slow recent day traded 700 soms - $67.

But the action is getting bigger. Within a year, says Paul Jones, a Price Waterhouse adviser to the exchange, the exchange will have a senior board with about 30 companies listed and a junior board with 30 to 50 companies. At that point, a substantial portion of this new nation's economy in effect will be trading in the open market. That market will have helped in raising needed capital for those companies.

Kyrgyzstan became an independent country in 1991, after the breakup of the Soviet Union. The government owned everything. Last year, the government privatized about 600 formerly state-owned companies. It gave coupons to Kyrgyzstan citizens - the number adjusted for age and years of work - that could be redeemed for???"=???/change. And they were just paper, for people who lacked a way to eventually convert them to cash, he says.

The stock exchange was initially formed a year ago as a place to trade coupons in an efficient, civilized way. Coupon-trading is still the major business here.

Coupons brought private ownership to people, usually the employees of former collectives. Some pay dividends. But they bring no new cash to the enterprises. The next step was the stock market, created by 11 initial investors who each bought a seat for $5,000 apiece. …