A Review of the Hierarchy of Effects Model

Nowadays, those in the current economic climate Kazakh companies need to additioanal improve change their mentality, start to think globally?

Indeed, in today's changing economic conditions, it is especially important to apply the global approach to management. The competition for capital increases. In particular, If we analyze at 2007: of the 33 companies from the CIS which listed its shares on the London Stock Exchange, 23 were Russian (they raised $29.4 billion, or 86 percent of all capital raised by the three countries combined), four were Kazakh (they raised $3.8 billion, or 11 percent) and six were Ukrainian (they raised $1.1 billion or 3 percent). Nevertheless, the Ukrainian companies compensated the relatively lower amount of capital raised with good performance after their IPO's. In Ukraine, the IPO showed the greatest return through the end of the year - 36 percent, while the performance of Russian IPO's was 13 percent, and Kazakh IPO's actually lost 10 percent. In order to successfully compete with other emerging markets companies, local companies must raise their standards to the highest international standards - not only in financial and operating activities, but also in terms of corporate governance (http://silkroadintelligencer.com).

The Hong-Kong Stock Exchange has attracted attention of interest in Kazakh issuers. Can we expect a displacement in emphasis to Eastern markets?

Currently, all nine Kazakh companies that conducted IPO's overseas have issued their shares on the LSE, which is the largest exchange in Europe. Without a doubt, companies can offer their shares on other global exchanges but, in our opinion, the investors' activity on the London exchange will always be the highest. At the same time, we cannot underestimate the potential of our Eastern neighbors. It's not impossible that there are companies or banks that are already