| NOTE 5 - TRADING AND AVAILABLE-FOR-SALE SECURITIES AT FAIR VALUE |
NOTE 5 - TRADING AND AVAILABLE-FOR-SALE SECURITIES AT FAIR VALUE
As of March 31, 2021 and 2020, trading and available-for-sale securities consisted of:
|
|
March 31, 2021 |
|
|
March 31, 2020 |
|
|
|
|
|
|
|
|
Corporate debt |
|
$ |
334,763 |
|
|
$ |
58,519 |
|
Non-US sovereign debt |
|
|
333,619 |
|
|
|
28,495 |
|
Corporate equity |
|
|
47,340 |
|
|
|
69,530 |
|
US sovereign debt |
|
|
10,828 |
|
|
|
- |
|
Exchange traded notes |
|
|
9,638 |
|
|
|
- |
|
Total trading securities |
|
$ |
736,188 |
|
|
$ |
156,544 |
|
|
|
|
|
|
|
|
|
|
Certificate of deposit |
|
$ |
- |
|
|
$ |
5,076 |
|
Mutual investment funds |
|
|
- |
|
|
|
672 |
|
Debt securities |
|
|
- |
|
|
|
405 |
|
Preferred shares |
|
|
- |
|
|
|
284 |
|
Equity securities |
|
|
1 |
|
|
|
1 |
|
Total available-for-sale securities, at fair value |
|
$ |
1 |
|
|
$ |
6,438 |
|
As of March 31, 2021, the Company held debt securities of two issuers which individually exceeded 10% of the Company’s total trading securities - the Ministry of Finance of the Republic of Kazakhstan and the Kazakhstan Sustainability Fund JSC of $293,451 and $193,677, respectively. As of March 31, 2020, the Company held debt and equity securities of three issuers which individually exceeded 10% of the Company’s total trading securities - debt securities of KazAgroFinance JSC of $30,253, and equity securities of Kcell JSC and KEGOC JSC of $21,754 and $21,750, respectively.
The Company recognized no other than temporary impairment in accumulated other comprehensive income.
The fair value of assets and liabilities is determined using observable market data based on recent trading activity. Where observable market data is unavailable due to a lack of trading activity, the Company utilizes internally developed models to estimate fair value and independent third parties to validate assumptions, when appropriate. Estimating fair value requires significant management judgment, including benchmarking to similar instruments with observable market data and applying appropriate discounts that reflect differences between the securities that the Company is valuing and the selected benchmark. Depending on the type of securities owned by the Company, other valuation methodologies may be required.
Measurement of fair value is classified within a hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The valuation hierarchy contains three levels:
|
· |
Level 1 - Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets. |
|
· |
Level 2 - Valuation inputs are quoted market prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets, and other observable inputs directly or indirectly related to the asset or liability being measured. |
|
· |
Level 3 - Valuation inputs are unobservable and significant to the fair value measurement. |
The following tables present trading securities assets in the Consolidated Financial Statements or disclosed in the Notes to the Consolidated Financial Statements at fair value on a recurring basis as of March 31, 2021 and 2020:
|
|
|
|
|
|
|
|
Fair Value Measurements at
March 31, 2021 using
|
|
|
|
Weighted
average
|
|
|
|
|
|
Quoted Prices in Active Markets for Identical Assets |
|
|
Significant Other Observable Inputs |
|
|
Significant unobservable
units
|
|
|
|
interest rate |
|
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt |
|
|
9.22 |
% |
|
$ |
334,763 |
|
|
$ |
334,403 |
|
|
$ |
- |
|
|
$ |
360 |
|
Non-U.S. sovereign debt |
|
|
8.06 |
% |
|
|
333,619 |
|
|
|
333,619 |
|
|
|
- |
|
|
|
- |
|
Corporate equity |
|
|
- |
|
|
|
47,340 |
|
|
|
28,630 |
|
|
|
1 |
|
|
|
18,709 |
|
U.S. sovereign debt |
|
|
1.68 |
% |
|
|
10,828 |
|
|
|
10,828 |
|
|
|
- |
|
|
|
- |
|
Exchange traded notes |
|
|
- |
|
|
|
9,638 |
|
|
|
9,638 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total trading securities |
|
|
|
|
|
$ |
736,188 |
|
|
$ |
717,118 |
|
|
$ |
1 |
|
|
$ |
19,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities |
|
|
- |
|
|
$ |
1 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1 |
|
Total available-for-sale securities, at fair value |
|
|
|
|
|
$ |
1 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1 |
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
March 31, 2020 using
|
|
|
|
Weighted
average
|
|
|
|
|
|
Quoted Prices in Active Markets for Identical Assets |
|
|
Significant Other Observable Inputs |
|
|
Significant unobservable
units
|
|
|
|
interest rate |
|
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate equity |
|
|
- |
|
|
$ |
69,530 |
|
|
$ |
58,271 |
|
|
$ |
- |
|
|
$ |
11,259 |
|
Corporate debt |
|
|
9.51 |
% |
|
|
58,519 |
|
|
|
58,519 |
|
|
|
- |
|
|
|
- |
|
Non-U.S. sovereign debt |
|
|
5.22 |
% |
|
|
28,495 |
|
|
|
28,495 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total trading securities |
|
|
|
|
|
$ |
156,544 |
|
|
$ |
145,285 |
|
|
$ |
- |
|
|
$ |
11,259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities |
|
|
- |
|
|
$ |
1 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1 |
|
Debt securities |
|
|
6.48 |
% |
|
|
405 |
|
|
|
- |
|
|
|
405 |
|
|
|
- |
|
Certificate of deposit |
|
|
0.66 |
% |
|
|
5,076 |
|
|
|
- |
|
|
|
5,076 |
|
|
|
- |
|
Mutual investment funds |
|
|
- |
|
|
|
672 |
|
|
|
672 |
|
|
|
- |
|
|
|
- |
|
Preferred shares |
|
|
- |
|
|
|
284 |
|
|
|
- |
|
|
|
284 |
|
|
|
- |
|
Total available-for-sale securities, at fair value |
|
|
|
|
|
$ |
6,438 |
|
|
$ |
672 |
|
|
$ |
5,765 |
|
|
$ |
1 |
|
The table below presents the Valuation Techniques and Significant Level 3 Inputs used in the valuation as of March 31, 2021 and 2020. The table is not intended to be all inclusive, but instead captures the significant unobservable inputs relevant to determination of fair value.
Type |
Valuation
Technique
|
FV as of March 31,
2021
|
FV as of March 31,
2020
|
Significant Unobservable Inputs |
% |
|
|
|
|
|
|
Corporate equity |
DCF |
$18,408 |
$11,259 |
Discount rate |
10.4% |
|
|
|
|
Estimated number of years |
9 years |
Corporate equity |
DCF |
$301 |
- |
Discount rate |
19.4% |
|
|
|
|
Estimated number of years |
9 years |
Corporate debt |
DCF |
$360 |
- |
Discount rate |
16.5% |
|
|
|
|
Estimated number of years |
9 years |
The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the year ended March 31, 2021:
|
|
Trading
securities
|
|
|
Available-for-sale securities |
|
Balance as of March 31, 2019 |
|
$ |
504 |
|
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
Sale of investments that use Level 3 inputs |
|
|
(497 |
) |
|
|
- |
|
Purchase of investments that use Level 3 inputs |
|
|
10,430 |
|
|
|
- |
|
Revaluation of investments that use Level 3 inputs |
|
|
829 |
|
|
|
- |
|
Foreign currency translation |
|
|
(7 |
) |
|
|
(1 |
) |
Balance as of March 31, 2020 |
|
$ |
11,259 |
|
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
Sale of investments that use Level 3 inputs |
|
|
(2 |
) |
|
|
- |
|
Purchase of investments that use Level 3 inputs |
|
|
834 |
|
|
|
- |
|
Revaluation of investments that use Level 3 inputs |
|
|
6,978 |
|
|
|
- |
|
Foreign currency translation |
|
|
- |
|
|
|
- |
|
Balance as of March 31, 2021 |
|
$ |
19,069 |
|
|
$ |
1 |
|
The table below presents the amortized cost, unrealized gains and losses accumulated in other comprehensive income/(loss), and fair value of available-for-sale securities as of March 31, 2021 and 2020:
|
|
March 31, 2021 |
|
|
|
Assets
measured at amortized cost
|
|
|
Unrealized loss accumulated in other
comprehensive income/(loss)
|
|
|
Assets
measured
at fair value
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities |
|
|
1 |
|
|
|
- |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2021 |
|
|
1 |
|
|
|
- |
|
|
|
1 |
|
|
|
March 31, 2020 |
|
|
|
Assets
measured at amortized cost
|
|
|
Unrealized loss accumulated in other
comprehensive income/(loss)
|
|
|
Assets
measured
at fair value
|
|
|
|
|
|
|
|
|
|
|
|
Certificate of deposit |
|
$ |
5,050 |
|
|
$ |
26 |
|
|
$ |
5,076 |
|
Mutual investment funds |
|
|
696 |
|
|
|
(24 |
) |
|
|
672 |
|
Debt securities |
|
|
456 |
|
|
|
(51 |
) |
|
|
405 |
|
Preferred shares |
|
|
306 |
|
|
|
(22 |
) |
|
|
284 |
|
Equity securities |
|
|
1 |
|
|
|
- |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2021 |
|
$ |
6,509 |
|
|
$ |
(71 |
) |
|
$ |
6,438 |
|
The total balance as of March 31, 2020, was held in reserve by the Company to satisfy the “deferred distribution payments” described in Note 4 - Restricted Cash.
|