Majilis, the Lower Chamber of the Kazakhstani Parliament, has reportedly approved a new draft law "On Joint-Stock Companies". The law provides for different procedures to establish joint-stock companies and simplifies the proceedings for partnerships. To facilitate the registration procedure, the authorised capital of a company will now be divided into stated and paid-in capital. Under the new law, it will no longer be necessary for companies to re-register every time authorised capital is increased or a new issue of a share made. Instead, it will only be necessary to announce the total sum of shares and then to make paid-in issues in tranches within the announced sum. The law will protect minority shareholders by improving the legal status of preferred shares and by allowing shareholders to enter a company's management via their representatives. According to the assistant to the Chairman of the National Securities Commission Nurdin Damitov, the new law will encourage investment in the domestic market.

On 4-5 June, Almaty hosted the second international investment conference "Kazakhstan Investment Summit" which was attended by representatives of 160 companies from 24 countries. At the opening ceremony, President Nursultan Nazarbaev said that as a result of US $500 of per capita investment over the period of 1993-1997, Kazakhstan is a leader among CIS countries. The President reminded conference participants that the total value of contracts Kazakhstan has concluded with foreign companies for the next 10-15 years is US $40bn. Nazarbaev stressed that he supports an active regulatory role of state in economic processes, with special attention paid to enhancing the investment climate. Speaking on the recent government move whereby certain contracts with foreign companies were terminated, the President said that he supported the government in most of the cases. He added however, that investors would not be subject to further sanctions unless they breach contracts or break Kazakhstani laws. The President announced that an advisory council of foreign investors would be established to assist him in the improvement of the investment climate. The first meeting of the council is to be held in September.

According to President Nazarbaev, an investment summit will now regularly be held in Almaty on the first Thursday/Friday of June and will be called the 'Almaty Investment Summit'.

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Speaking at the summit, the First Deputy Prime Minister and Chairman of the State Investment Committee Uraz Zhandosov, said that the government would soon publish a number of programmes for the major sectors of the national economy to speed up reforms. In particular these include further steps in the privatisation programme which will provide procedures to handle non-solvent enterprises. The laws "On Bankruptcy" and "On Joint-Stock Companies" will also be adopted to facilitate regulation in this sphere. According to Zhandosov, the government intends to clarify its trade policy with regard to further market liberalisation including the gold market. A new land reform will enable private ownership of land.

The government intends to continue administrative reform and to implement the first stage of the Blue Chip Programme by the end of the year, whereby the state share in the first five companies will be sold (See below). Greater focus will be placed on small and medium-sized businesses. In 1997 loans to small and medium-sized businesses totalled KZT 22.9bn (US $299m) which represents 32% of total loans worth KZT71.9bn (US $937m) extended to the real sector.

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The National Securities Commission (NSC) intends to force professional market players to only trade on the exchange, Aben Bektasov, head of the NSC revealed at the investment summit. This is expected to make the market more transparent and liquid. The NSC is currently devising an appropriate regulation towards this aim. To date, most trading in shares actively goes unreported, while the daily volume of trade on the market is US $500,000. The current capitalization of the Kazakhstani market is US $1.5bn. Of the 72 brokers and dealers, which include 42 banks, Kazkommerts Securities has the highest capitalization—US $14.2m. Speaking about pension funds in Kazakhstan, Bektasov said that they are expected to total around US $400m by the end of the year. However, most funds are likely to go to the liquid government securities market and, to a lesser extent into the stock market.

The National Bank of Kazakhstan does not see any reason to raise the rate of refinancing, which is currently 18.5%, the Chairman of the NBK Kadyrzhan Damitov disclosed to the Interfax news agency. According to him, traded volumes of the US Dollar have markedly increased on the AFINEX recently, although currently they are starting to fall again.

At a press conference held on June 5 following the investment summit, Uraz Zhandosov stated that in addition to the four Kazakhstani "blue chips"—AktobeMunaiGas, MangystauMunaiGas (5% to be sold in each), Ust-Kamenogorsk Titanium and Magnesium Plant (15.5%), and Jezkazgantsvetmet (5-20%, 10% of shares in Halyk Savings Bank will also be put up for sale on the Kazakhstan Stock Exchange in the third quarter of this year. Zhandosov added that this year the government targeted a total revenue of KZT45bn (US $588m) from the Blue Chip Programme and that this target is expected to be reached. Total privatisation revenues to date this year are estimated at less than US $100m.

According to the Committee for Statistics and Analysis, the consumer price index in Kazakhstan was 0.3 p.p. in May, down 0.2 p.p. compared to April. Inflation has totalled 4.4 p.p. since the beginning of the year. Prices for food products and services increased in May by 0.6 p.p. and 0.1p.p., respectively (by 6.0 p.p. and 5.2 p.p. since the beginning of the year). Prices for non-food products decreased 0.1p.p. in May (increasing by 0.3 p.p. since the beginning of the year).