Over the past five years, Kyrgyzstan's stock market has been actively developing, and investing in shares has become one of the tools for generating additional income. However, many beginners face the question: where to start? Ulan Korchubekov, Director of BNC FINANCE brokerage company, shared the key steps that will help you get oriented and invest with minimal risks.

Step 1: Choosing a broker

The first step to starting trading on the stock market is choosing a broker, as all transactions with securities on the stock market are carried out through professional participants in the securities market. There are two ways to find a broker: either by searching online for companies offering brokerage services or by contacting the Kyrgyz Stock Exchange, which can provide a list of active brokers along with their contact details. However, before choosing a broker, it is essential to review their market experience and verify their licenses, which are issued by the state regulator (State Financial Supervision Authority). To ensure reliability, you can visit the broker's office to examine their licenses and confirm their credibility.

Step 2: Signing the contract

After selecting a broker, the next step is to sign a brokerage service contract. To do this, you only need to provide your passport and the broker will open a brokerage account in your name. This account will enable you to buy and sell securities on the stock market through the broker.

Step 3: Choosing a company to invest in

Once your account is open, you need to choose a company whose shares you want to purchase. It is important to pay attention to several key points: first, the company's presence on the stock exchange listing, which confirms its financial stability; second, the company's financial indicators, such as profit, growth and debt load; third, the history of dividend payments to shareholders. Review all available information about the company to make an informed decision.

Step 4: Placing an order with the broker

Once you have selected a company and decided to purchase its shares, the next step is to place an order with the broker to buy them. You can give the order verbally (for example, over the phone or via a messaging app), after which the broker will prepare a document that you need to sign and return. This document is an integral part of your contract with the broker and confirms that you authorize him or her to execute the transaction for the purchase of shares.

Step 5: Transferring money to the broker's account

After signing the order, you will need to transfer money to the broker's account. The account details are provided in your contract, and the transfer can be made from your personal account or by depositing cash at the bank.

It should be noted that broker fees usually range from 2% to 3% of the transaction amount, which should be taken into account when planning your investments.

Step 6: Finalizing the transaction and shareholder registry

After the funds are credited to the broker's account, they will begin to execute your order to purchase shares on the stock exchange. Once the shares are acquired, the broker will transfer them to your personal account in the shareholder registry, which is maintained by an independent registrar. By contacting the registrar, you can obtain an extract from the shareholder registry confirming your ownership of the securities.

Monitoring and tracking your investments

Currently, the MegaPay app allows users to purchase government securities online. The app lets you view and manage your investments in government securities through a personal account. In the near future, there are plans to expand the functionality to enable the purchase of not only government but also corporate securities.

Taxes on investment income

Income from securities transactions is subject to income tax. The tax rate is 10% of the difference between the purchase and sale price of the security. This means that if you bought shares for 100 KGS and sold them for 150 KGS, the tax will be levied on the 50 KGS difference between the purchase and sale.

Can problems arise?

In the stock market, as in any other field, risks can arise. For example, if a broker fails to meet his or her obligations, you will need to contact the State Financial Supervision Authority or the judicial authorities. To avoid such situations, it is essential to thoroughly research the broker before signing a contract, check their licenses and ensure the reliability of the company.

Tips for beginner investors

One of the main tips for beginners is not to invest all your funds in the shares of one company. To minimize risks, it is essential to diversify your investments and purchase shares of several companies across different sectors. Additionally, always check the broker's reputation before signing a contract. Work only with trusted and licensed companies to avoid fraud.