Kazakhstan Chamber of Commerce in the USA


Archive for the ‘Finance’

EBRD forecasts economic growth in Kazakhstan 0

Posted on May 15, 2017 by KazCham

Kazakhstan Embassy in Washington, D.C.

Baku, Azerbaijan, May 10
By Elena Kosolapova – Trend:
The European Bank for Reconstruction and Development (EBRD) forecasts economy growth rate in Kazakhstan to increase to 2.4 percent in 2017 after 1 percent in 2016, Regional Economic Prospects report of the bank said.

The growth will be supported by stronger exports from the improved oil price outlook, targeted public investments and higher foreign direct investment inflows.

EBRD noted that monetary conditions have been eased in Kazakhstan, the exchange rate has stabilized and inflation is on a downward trend (inflation decreased from 17.7 percent year-on-year in July 2016 to 7.7 per cent in March 2017).

Meanwhile the legacy of high non-performing loans (around $9.6 billion, or 16.4 percent of the loan portfolio as of end-March 2017) continues to weigh on the banking sector, given the presence of off-balance sheet structures that have absorbed the legacy NPLs.

The bank noted that Kazakh government has allocated $6.5 billion to support banks facing insolvency risks, and a possible merger of several banks is being discussed.

“Continued implementation of the government’s reform agenda is likely to lead to further improvements in the country’s institutional capacity and its business climate,” the report said.

According to the EBRD, in 2018 growth in Kazakhstan is expected to increase to 3.5 percent, driven by accelerated production at the Kashagan oil field, boosting oil exports, and higher foreign direct investment from China and other countries.

The bank also noted that large state support programs, backed by significant fiscal buffers, will continue to drive growth. Inflation is expected to remain within the 6-8 percent range set by Kazakh National Bank in 2017, and decline further in subsequent years.

Follow the author on Twitter: @E_Kosolapova

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Daniel Witt, President of International Tax and Investment Center in Kazakhstan 0

Posted on February 15, 2017 by KazCham

The reforms announced by President Nazarbayev on 25 January are significant constitutional reforms. I believe they represent another step forward in a modernization of democracy in Kazakhstan and really they modernize the structure in the system of your Constitution, of your Government, of the contract between the President, and the Government, and the Parliament, and the People. And all of this reflex that Kazakhstan is a different country today than 10 years ago or 25 years ago when you became newly independent.

Sitting here in Washington, DC President Trump talks about Making America Great Again, and I think President Nazarbayev through this set of reforms and the Third Modernization’s set of reforms will continue to make Kazakhstan Great again and forever. 

Source: 24Khabar

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EIB provides €200m to support green projects in Kazakhstan 0

Posted on December 05, 2016 by KazCham

Centil Law Firm BI@centil.law

Long-term funding for SMEs in Kazakhstan and finance projects involving climate change adaptation and mitigation and environmental protection are set to be available as the European Investment Bank (EIB) signs two financing contracts for €150 million and €50 million.

The EIB funds will help to implement the “Concept for the Transition of the Republic of Kazakhstan to a Green Economy”, as climate action and environmental protection are Kazakhstan’s key policy objectives. This will contribute to the improvement of industrial competitiveness by fostering cleaner and greener production investments, renewable energy generation, resource efficiency and climate-resilient infrastructure projects.

The EIB is joining forces with a well-established partner, JSC DAMU Entrepreneurship Development Fund (DAMU), a state-owned development institution created by the government to support the development of Kazakhstan’s SME sector that will on-lend the EIB funds to selected financial intermediaries.

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Japanese steel plant launched in Kazakhstan 0

Posted on November 28, 2016 by KazCham

Centil Law Firm BI@centil.law

The Tokyo Rope Almaty plant launched in Almaty on 7 November 2016 will produce a variety of metal products, including heavy-duty grids for the further production of gabion systems used for the prevention and elimination of emergency situations.

The projected capacity of the plant is 5,000 tonnes of metal products per year during the first phase, a capacity that is set to increase. It is expected that the company’s output will not only be utilised in Kazakhstan, but will also be supplied to CIS states and other countries.

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Swiss businesspeople to invest in Kazakhstan 0

Posted on November 26, 2016 by KazCham

Centil Law Firm BI@centil.law

Swiss businesspeople have met with local counterparts in search of new cooperation options and discussed plans for expanding partnerships. In particular, foreign investors have proposed a number of interesting projects related to banking, transport logistics, construction, healthcare and tourism. They are interested in Kazakhstan because it provides them with a link to the Chinese market. From there, they are also ready to enter the Russian market.

One of the outcomes of these meetings has been the signing of a Memorandum of Understanding between the Kazakh Chamber of Commerce and the Chamber of Commerce Switzerland-Russia/CIS.

During the course of the negotiations, a Swiss construction company offered to build a brick factory in Kazakhstan. As noted by investors, a special combination of cement and wood will enable homes to retain heat better. One of the advantages of the project, according to business officials, is the low cost of products. In addition, there will be no need to import building materials from abroad.

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Kazakhstan to create a cargo airline 0

Posted on November 21, 2016 by KazCham

Centil Law Firm BI@centil.law

This task is assigned to the national carrier Air Astana together with the state logistics operator Kazakhstan Railway. According to the railway operator, the new cargo airline will begin flights in 2017, with China, Europe, Iran, Russia and Turkey among the first destinations.

Kazakhstan is now actively working on the development of freight hubs in the country’s airports. This year, the air hub of Karaganda was the first air harbour in Kazakhstan, which has been validated according to the requirements of European aviation authorities RA3.

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Kazakhstan opens first trade centre in Shanghai’s free trade zone 0

Posted on November 20, 2016 by KazCham

Centil Law Firm BI@centil.law

Kazakhstan’s first trade centre has opened in Shanghai’s free trade zone. The shopping centre will offer products manufactured in Kazakhstan only. This is a great opportunity for Kazakh entrepreneurs to enter the 30-million Shanghai market that is located next to the three provinces with a total population of 200 million people. For Chinese buyers, the centre provides better access to eco-friendly consumer products.

Kazakh producers are planning to sell fish, beef and mutton. China imports 7 million tonnes of meat every year, and Kazakhstan can meet some of this demand. The Chinese government will soon give permission for importing fish products from Kazakhstan and Kazakh producers will be assisted in selling their goods. Businesses will be assisted with paperwork and translations and will receive consultations.

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ADB to provide $200 million for SMEs in Kazakhstan 0

Posted on November 19, 2016 by KazCham

Centil Law Firm BI@centil.law

The Asian Development Bank (ADB) has approved a $200 million equivalent loan to provide much-needed financing in local currency to micro, small- and medium-sized enterprises (MSMEs) in Kazakhstan.

The loan will be channelled through the Damu Entrepreneurship Development Fund, a government-owned agency mandated to provide loans and guarantees to MSMEs through qualified microfinance organisations and local banks. The ADB loan will be provided in tenge to reduce currency-related risks for financial institutions and their borrowers.

In addition to the loan, the ADB will provide a technical assistance grant of $500,000, financed by the Government of Luxembourg through the Financial Sector Development Partnership Special Fund to help improve the credit risk management of selected financial institutions and expand financing opportunities for MSMEs.

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Kazakhstan Bonds Are Better Than U.S. Treasurys 0

Posted on November 10, 2016 by KazCham


Believe it or not, over the last three months, Kazakhstan bond investors have done a better job preserving wealth than those holding Treasury debt. In fact, Treasury bonds and Kazakhstan bonds, both investment grade (though KZ obviously on the low end of the scale) have seen their prices rise and yield contract. But since August, there has been a great unwinding of old-QE economy debt and KZ stands as the perfect testament to that. How can this little known asset be one of the best bond markets around?

The last time Kazakhstan issued a sovereign bond was in 2015 for 2024 and 2044 bonds yielding around 4.6% and 6.2% respectively in dollars. But as of Wednesday, the 2024s were yielding just 3.6%, a full 100 basis points lower.

In other words, Kazakhstan bonds have buyers. U.S. government debt has sellers.

“If this keeps up, I think you have to go and buy bonds elsewhere for a better return,” says Jan Dehn, head of research at Ashmore Group in London, a $52.6 billion emerging markets fund manager with holdings in Kazakhstan. “For an investment grade credit, their yield is okay. Their ability and their willingness to pay debt is very high. You have more indebted investment grade countries in the West that pay outright negative yields,” he says.

Something is happening in the developed economies. They are recognizing that negative interest rates are bad for financials. Zero interest rates are not doing what they were supposed to, get corporations to invest, and quantitative easing has been all about the major central banks, namely the Federal Reserve and European Central Bank, buying and selling bonds and debt derivatives at a penny more than they bought them the day before, pushing yields to the floor. That trade is unwinding. Countries like Kazakhstan that are seen as a generally low credit risk will benefit, even as volatility is expected once the QE trade draws down.

Moody’s changed its outlook on Kazakhstan debt to negative in April, which is a 12 month warning that KZ might lose its investment grade title. Oil prices were of course to blame. But on Oct. 31, Fitch affirmed KZ’s BBB rating with a stable outlook.  Good news.

Kazakhstan’s economy is the best of the ‘Stans. “It’s even much more interesting for investors than Ukraine, for example,” says Arent Thijsen, a fund manager with Blauwtulp Wealth Management in Rotterdam.

The currency, clobbered over the last three years, has been strengthening since February. UBS in London and Renaissance Capital in Moscow expect the currency to remain stable rather than move in one direction for long, according to reports published in early October.

Says Dehn in London, “If for some reasons KZ loses its investment grade, I would buy more.”

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Kazakhstan among Top Global Improvers in Doing Business Report 0

Posted on November 09, 2016 by KazCham

Astana Calling

The 2017 World Bank Doing Business report, released Oct. 25, noted Kazakhstan is among the 10 most-improved economies, climbing 16 positions since 2015. The country is ranked 35th among 190 nations in the category “ease of doing business.”

Joining Kazakhstan on the top improvers list, the result of implementing at least three reforms in the past year, are Brunei, Kenya, Belarus, Indonesia, Serbia, Georgia, Pakistan, the United Arab Emirates (UAE) and Bahrain.

“This significant improvement has been ensured by four of 10 indicators; namely, by facilitating the procedures for obtaining permits for construction, ease of registering property, improving the protection of the rights of minority investors and contract enforcement. It is a good achievement for Kazakhstan,” Centre for Strategic Initiatives senior partner Olzhas Khudaibergenov told The Astana Times.

Improved performance in the Doing Business ranking typically indicates a lower level of income inequality and reduced poverty.

Read more at Astana Calling

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