About the reasons for the growing interest in government securities and the dynamics of their market in Kyrgyzstan, 24.kg spoke with the acting general director of KSE, Aida Chodulova.
Photo Aida Chodulova. Acting General Director of KSE
— What are government securities and what is their significance?
— In conditions of instability in global markets, more and more investors are choosing instruments with government guarantees. Government securities are debt instruments issued by the Ministry of Finance. Since May 2023, two types of GS have been regularly issued on the KSE:
GKO-2 — government treasury bonds with a maturity of two years;
GKV-12 — annual government treasury bills.
The funds raised from the issuance of GS are used to finance national projects, cover budget deficits, and refinance government debt. By investing in GS, the investor essentially lends to the government and receives a guaranteed income.
— What is the trend in interest in government securities?
— The demand for GS shows impressive results. In 2024, the trading volume of government securities on the KSE amounted to over 3.7 billion soms, which already indicated a high level of trust from investors.
In 2025, interest grew even more: in just the first ten months, the volume of transactions reached 7.3 billion soms, which is almost double the figures of the previous year.
Among the investors are not only individuals but also banks, insurance companies, investment and pension funds. GS are becoming a necessary element of a balanced portfolio for large market participants.
— What types of government securities exist?
— GS are divided into several categories based on maturity:
Short-term. Government treasury bills (GKV) — discount securities with a term of 3, 6, or 12 months. The nominal value of one unit is 100 soms.
Long-term. Government treasury bonds (GKO) — instruments with a term of more than one year and coupon income.
Currently, GKV-12 (12 months) and GKO-2 (2 years) are traded on the KSE. Both types of securities have category A in the KSE listing, confirming their high transparency and reliability. Moreover, income from GS is not subject to income tax and profit tax.
Note: Listing is the process of including securities in the official exchange list and monitoring their compliance with established requirements.
The weighted average yield based on auction results is: GKV-12 — about 10.5%, GKO-2 — about 13% per annum.
— What advantages do GS have?
— GS have seven main advantages:
1. Reliability and government guarantee. Obligations on GS are fully supported by the Ministry of Finance.
2. Transparent income. The investor knows in advance how much they will earn.
3. Low risk. The volatility of GS is significantly lower than that of corporate instruments.
4. Liquidity. Securities can be sold at any time through brokers or banks.
5. Budget provision for payments. All expenses related to GS are accounted for in the state budget in advance.
6. Possibility of REPO transactions. This provides the investor with flexibility in managing liquidity.
7. Accessibility for all categories of investors, including foreigners.
— What income can be obtained and where to purchase GS?
— GKV-12 are sold below par — for example, at 86-87 soms. After a year, the investor will receive 100 soms, ensuring an income of 13-14 soms per security.
GKO-2 has a coupon of 5% per annum with payments twice a year. The nominal value is returned after two years.
GS can be purchased by both individuals and companies — residents and non-residents. To do this, it is enough to contact KSE trading participants, such as brokers or commercial banks. An updated list is available on the exchange's website (kse.kg).
— What are the future plans for the GS market?
— The Kyrgyz Stock Exchange, together with the Ministry of Finance, is actively working on modernizing infrastructure and improving access to government securities:
1. Increasing financial literacy. The exchange actively disseminates educational materials on social media, explaining the principles of the stock market and the advantages of GS to the population.
2. Transferring all GS to the KSE platform. Since September 15 of this year, the government owns 62.17% of KSE shares, which is an important step towards improving the exchange infrastructure. In the near future, a complete transfer of all types of GS from the National Bank to the exchange is planned.
3. Digitalization and technical modernization. KSE is implementing mobile solutions, electronic identification, and remote account opening. In 2025, a major modernization project will start: new server equipment will be purchased, the QUIK system will be implemented, and a new trading platform is being tested.
4. Increasing liquidity. The exchange is preparing to launch a market maker institution, which will ensure stable quotes and accelerate transactions in the GS market.
— Can we consider GS as a tool for financial stability?
— The implementation of comprehensive measures to develop the market for government securities will not only attract new investors but also enhance transparency, liquidity, and efficiency of the stock market as a whole. GS already play an important role in Kyrgyzstan's financial system, and further development of the exchange infrastructure will make these instruments even more accessible and convenient for all investors.
