The common share price of Kazakhstan-based Freedom Holding Corp (NASDAQ:FRHC), formerly BMB Munai, Inc., has expectedly eased, dropping from their 52-week highs of $14.44, to $13.34, less than two weeks after trading began at NASDAQ.
NASDAQ is the second-largest stock exchange after the New York Stock Exchange (NYSE) drawing a market capitalization of $10 trillion. By listing at the prestigious American capital market, the financial service company becomes the first from Kazakhstan to get a nod from US regulators.
Freedom Holding Corp is an investment bank and retail brokerage firm focusing on Eastern Europe and Central Asia markets. It is also a major investor of Kazakhstan’s Kcell KCELL.KZ, controlling a five percent stake acquired through open-market purchases.
Besides brokerage, the group offers other operations as underwriting services and counselling through their subsidiaries registered under Freedom Finance. Freedom Finance serves over 10,000 clients from 70 locations through their proprietary trading platform, TraderNet. They also have executive offices in the United States and Russia with established headquarters in Almaty, Kazakhstan.
FRHC Approved and Listed at NASDAQ
Their announcement that their listing application had been reviewed and accepted by the US States Securities and Exchange Commission (US SEC) attracted attention to the shares of the financial service firm, which rallied, hitting a new 2019-high of $14.44 when trading began on Oct 15, 2019 under the ticker symbol, FRHC. Before NASDAQ listing, the company’s common stock had been listed at OTCQX Best Market and included in the OTCQX Best 50 list in January 2019.
Of the NASDAQ listing which took five years to prepare, the Chairman and Chief Executive Officer of Freedom Holding Corp, Timur Turlov, said:
“We expect this listing will facilitate our efforts to communicate our vision to a broader audience and further develop strategic synergies we see between investors and investment opportunities in our region and those in the U.S. and other international financial markets.”
Aforementioned, the listing at NASDAQ capital market is not only a significant expansion and a move that will increase the client base, but given their wide array of financial services, the company would easily leave a mark and draw more retail high net worth investors.
The facilitation by Freedom Finance, with headquarters in Almaty, Kazakhstan, will further lift the profile of the company. Freedom Finance is the biggest and most active brokerage provider in the country with a noticeable presence in Uzbekistan.
The Moscow Investor Exposure, Listed at SPB and Rated by S&P
On Oct 22, Freedom Holding Corp also announced that their common shares had been approved for listing at the Saint-Petersburg Exchange (SPB Exchange). Timur Tirmlov, the 31-year-old CEO, was hopeful of getting listed in Moscow previously acknowledging that the financial firm was under the radar of deep-pocketed investors who “do not work with a company that is not listed.”
The listing at SPB Exchange will now see its shares included in Russia’s Russell 2000 or 3000, an index made up of small-cap companies. Most importantly, the listing is strategic as it would “increase their visibility as a leading retail brokerage in the region” while simultaneously placing them “on the sight of investors” attracted to their wide geographic base spanning through Central Asia, Eastern Europe through to the United States where it is now a holding company.
Commenting on the listing, Turlov said:
“Our listing on the SPB Exchange continues our practice of expanding our market presence by listing on securities exchanges where we have a strong client presence. In addition to our principal market listing on Nasdaq, our shares will now trade on exchanges in Russia and Kazakhstan.”
Earlier, the S&P had assigned its Kazakhstan subsidiary, JSC Freedom Finance, a credit rating of B-, a decision that Timur said: “compared favorably with the B anchor SACP that S&P assigned to regional financial service companies.” The indicator, he explained, was an indicator of their risk sensitivity and how they planned to manage it while exploring more opportunities as they leverage the rating for a business.
FRHC Outlook
In their Q3 2019 report to the SEC as mandated under Req 10-Q, Freedom Holding Corp had $429.1 million in assets up from $350 million in the previous quarter. Similarly, their revenue had increased from $7.4 million to $29 million. Combined, this pushed the market cap of FRHC to $774.96 million and a $8.21 million profit during the quarter. Presently, there are 58.09 million in outstanding shares, a public float of 15.15 million, earnings per share at $0.37 and an impressive P/E of 36.
Compared, FRHC is higher than the financial sector standard, and even better than Bank of America’s which stands at 11.48. Given their proven track record and their innovativeness in their approach to offering personalized financial service and retail trading, analysts reckon that FRHC is technically bullish in the medium to long term.
Furthermore, their presence in the US further amplifies their reach, giving Freedom Holding Corp the platform needed for them to strike partnerships in Latin America and even Canada, cementing their position as a go-to platform for financial services. Already, they have a deserved presence in Kazakhstan and is a preferred agent in Central Asia for pre-IPO and IPO allocation.