Kazakhstan Chamber of Commerce in the USA

KazCham



UnionPay International enters all-round cooperation with Kazakhstan’s Halyk Bank 0

Posted on June 15, 2015 by KazCham

May 27, 2015 – UnionPay International announces it has entered into all-round cooperation with Halyk Bank of Kazakhstan. The cooperation between the two sides will encompass a wide range of fields, including issuance of local bankcards, provision of innovative services and foreign student support. To herald the inauguration of their partnership, Cai Jianbo, CEO of UnionPay International, and Umut Shayakhmetova, President of Halyk Bank, jointly attended the signing ceremony.

Evolution of role sees fund gearing up for ‘People’s IPO’ 0

Posted on December 25, 2011 by Alex

The heart of Kazakhstan’s economy, Samruk-Kazyna has, since its inception, played a crucial role in the country’s industry and economy. Now the fund is ready to float some  of its assets at discounted prices to retail investors. By Clare Nuttall

Kazakhstan’s sovereign wealth fund Samruk-Kazyna put to work billions of US dollars to support the economy during the global economic crisis. With Kazakhstan growing strongly, the fund’s role has evolved – it is now responsible for creating new industries and increasing efficiency in the economy’s most important companies.

This year will see further dramatic changes, as minority stakes in some of its largest and most attractive companies are floated on the domestic stock exchange. Samruk-Kazyna was created in the depths of the crisis through the merger of two existing organizations – holding company Samruk and investment company Kazyna – in October 2008, and its importance to the Kazakh economy cannot be overestimated. Its subsidiary companies include the national rail and postal companies, electricity grid operator Kegoc, state oil-and-gas giant National Company KazMunaiGas, nuclear company Kazatomprom, national air carrier Air Astana, and three of the top four banks. It is also the parent of the Damu small enterprise fund, private equity fund of funds Kazyna Capital Management, and other  financial organizations.

Overall, Samruk-Kazyna manages assets worth in excess of $70 billion, accounting for around 40 percent of the economic activity in the country. It has a total of 404 subsidiaries and affiliated companies. As of March 2010, Samruk-Kazyna announced it had invested KZT897 billion ($6.1 billion) from Kazakhstan’s National Fund to support the economy during the crisis. Its largest financial commitment was to the banking sector, where it invested some KZT486 billion.

Other anti-crisis measures included supporting the real-estate sector (KZT360 billion), support for small and medium-sized enterprises (KZT120 billion) and implementing industrial and infrastructure projects (KZT121.5 billion).

Samruk-Kazyna became the majority shareholder of  BTA Bank and Alliance Bank, injecting liquidity when both were on the brink of collapse in February 2009. Today, a debt restructuring for the two banks has been agreed with creditors.

At the same time, the fund took minority stakes in Kazakhstan’s other big-four banks, Halyk Bank and Kazkommertsbank. Now that GDP growth in Kazakhstan has returned to pre-crisis levels, Samruk-Kazyna is starting to divest some of the assets it acquired during the crisis. The fund has already exited its investment in Halyk, selling the stake back to the bank and its majority shareholder Almex.

Kazkommertsbank could buy back its shareholding in the near future. A sale of BTA to Russia’s Sberbank is still on the cards and Samruk-Kazyna is also looking at potential exit routes for Alliance, but it is adamant that it will sell its shareholdings only if the price is right.

Post crisis, Samruk-Kazyna is involved in raising the efficiency of its subsidiaries, and is the main conduit for big foreign investment projects. The emphasis within Kazakhstan has shifted toward production of processed and value-added products, rather than being purely a supplier of raw materials.

Several of the priority projects within the 2010-14 Accelerated Industrial and Innovative Development program are aimed at achieving this goal. Samruk-Kazyna is already working to diversify and industrialize Kazakhstan. The ‘breakthrough projects’ under the Samruk-Kazyna umbrella include reconstruction of the Atyrau refinery, modernization of the national electricity grid and construction of several new power stations. Within Samruk-Kazyna, two holding companies created in late 2008 are responsible for the chemicals and metals sectors, respectively. The United Chemicals Company was set up to develop a national chemicals industry and reduce Kazakhstan’s dependence on imports of products such as fertilizers. Tau Ken Samruk is the holding company for the Kazakh government’s stakes in metals and mining companies. While oil and gas still account for the lion’s share of Kazakhstan’s exports, metals and mining have been growing in importance in recent years.

Soaring metals prices, and the steady growth in demand from neighboring China in particular, have provided an impetus for Kazakhstan to increase its output. The government stakes in two major London Stock Exchange-listed mining companies – Eurasian Natural Resources Company (ENRC) and Kazakhmys – are held within Tau Ken Samruk. Both companies have an immense presence in the Kazakhstan mining sector, as well as internationally.

Kazakhmys is the largest copper producer in Kazakhstan and one of the top 10 producers worldwide. ENRC – a diversified natural resources group – has a presence in China, Russia, Brazil and Africa, as well as in Kazakhstan. This year has already seen significant changes for Samruk-Kazyna. On April 12, Timur Kulibayev was promoted to chairman as part of the post-elections reshuffle. Kulibayev, the son-in-law of Kazakh president Nursultan Nazarbayev, was previously the company’s deputy chairman.

The fund’s main task this year will be to carry out the ‘People’s IPO’ program, under which shares in companies that are wholly or partly owned by Samruk-Kazyna will be offered at a discount to retail investors and pension funds. In addition to raising funds for expansion, the program is also intended to stimulate the domestic capital market.

At least some of the IPOs are due to take place by the end of this year. Companies expected to be part of the first wave of IPOs include power-generation company Samruk-Energo, electricity grid operator Kegoc, postal service Kazpost and KazMunaiGas Exploration and Production. In the following two years, IPOs of other companies – including Kazatomprom, National Company KazMunaiGas, and railway operator Kazakhstan Temir Zholy – are planned.

SOURCE: Invest in Kazakhstan, 2011, p. 45-46

Kazakhstan Daily News Roundup – August 17, 2011 0

Posted on August 19, 2011 by Alex

ENERGY:

Tethys narrows losses in first half of 2011 (SRI)

MIE Holdings acquisition of BMB Munai’s Emir Oil approved by Kazakh Ministry of Oil and Gas (SRI)

Caspian states review oil spill response (UPI)

BUSINESS AND ECONOMY:

Halyk Bank H1 net income up 27%
(SRI) – Halyk Bank, Kazakhstan’s second-largest lender by assets, said on Tuesday its net income grew by 26.9% year-on-year to KZT21.1 billion ($144 million) in the first half of 2011.

Samruk-Kazyna gives up control of Development Bank of Kazakhstan, other assets
(SRI) – In a move to reorganize the management of state-owned assets, the Kazakh government transferred control of the Development Bank of Kazakhstan and other entities from Samruk-Kazyna to other government agencies, the Kazakhstan-Novosti news agency reported.

Indicators – August 16, 2011 (Reuters)

METALS AND MINING:

Kazakhstan raises steel output in Jan-July (SRI)

Frontier Mining receives second $5 million tranche for Benkala copper project (Proactive Investors)

POLITICS:

Profile: Aset Isekeshev – Minister of Industry and New Technologies, Deputy Prime Minister
(SRI) – Aset Isekeshev, one of Kazakhstan’s most influential politicians, serves as the Deputy Prime Minister and Minister of Industry and New Technologies.

SOCIETY:

Almost 40% of Kazakhs oppose hijabs – poll (Interfax)

SOURCE: http://silkroadintelligencer.com/2011/08/17/

 

Kazakhstan Daily News Roundup – August 18, 2011 0

Posted on August 19, 2011 by Alex

ENERGY:

On the move: Shell-led oil consortium names new head
(SRI) – Caspi Meruerty Operating Company B.V. (CMOC) has named Aslan Shapabayev the venture’s director general, the Trend news agency reported on Wednesday, citing the press office of Kazakh oil company KazMunaiTeniz.

Lukoil to abandon two offshore exploration projects in Kazakhstan (SRI)

Fluor awarded CPC expansion contract (SRI)

KazMunaiGas shareholders approve intergation of NBK subsidiary (SRI)

BUSINESS AND ECONOMY:

Halyk to buy back 50% of preferred shares in 2011 – CEO
(SRI) – Halyk Bank, Kazakhstan’s second-largest lender by assets, may buy back more than half of its preferred shares held by the state-owned holding and investment company Samruk-Kazyna by the end of the year, Reuters reported on Wednesday.

Kazakhstan to harvest 18.9 million tonnes in 2011 – forecast (SRI)

National Fund for Innovation to set up two venture funds (Interfax)

Indicators – August 17, 2011 (Reuters)

METALS AND MINING:

Glencore rumored to seek a stake in ENRC again
(SRI) – The world’s largest commodity trader Glencore International AG plans to acquire a 14.59% stake in Eurasian Natural Resources Corporation (ENRC) from one of the company’s founders, Alexander Mashkevich, Israeli news portal IzRus reported on Wednesday.

ENRC corporate governance review to be concluded mid-September (SRI)

ENRC first-half income grows 29% on higher commodity prices (SRI)

Ex-head of ENRC set for board as charges dropped – FT (Reuters)

Mining Machines supplies equipment to Kazchrome (Interfax)

SOCIETY:

Kazakhstan to buy Russian helicopters for ambulance aviation (Trend)

Striking oil workers’ leader sentenced in Kazakhstan (RFE/RL)

SOURCE: http://silkroadintelligencer.com/2011/08/18/

 

Kazakhstan Daily News Roundup – May 4, 2011 0

Posted on May 04, 2011 by KazCham

ENERGY:

CPC expansion, regardless of Bosporus bypass – KMG head (New Europe)

World Wide comments on Kazakhstan arbitration (Marketwire)

BUSINESS AND ECONOMY:

Kazakhstan tries to beef up exports
(bne) – Kazakhstan wants to take advantage of its proximity to the world’s largest beef importers. The country’s abundance of pastureland and history of nomadic herding is a good start, but investment in modern technologies and good breeding stock are going to be equally important.

Mittal rumored to buy KazStroyService
(SRI) – Lakshmi Mittal, the India-born billionaire, plans to buy a 35% stake in Kazakh engineering, procurement and construction firm KazStroyService, India’s Business Standard reported on Sunday.

A new Silk Road beckons from Central Asia, igniting dreams in Kazakhstan
(Washington Post) – A thousand years after the Silk Road began disappearing into the wind-blown steppe, the people of Kazakhstan are awaiting a modern, paved, high-speed version carrying 21st-century jewels such as jobs, indoor plumbing and connections to the global economy.

Kelimbetov to end stint on Sberbank’s supervisory board (SRI)

Kazakhstan to raise per capita income by 50% by 2016 – Nazarbayev (SRI)

Halyk posts biggest first-quarter profit among Kazakh lenders (Bloomberg)

Venus Airport Investments takes over Almaty airport (Interfax)

Kazakh president wants ‘road map’ for new international currency (RFE/RL)

Indicators – May 3, 2011 (Reuters)

POLITICS:

Obama, Kazakh leader talk ‘democratization’
(AFP) – President Barack Obama spoke with the Kazakh leader Saturday about the central Asian country’s need for “greater democratization,” the White House said in a statement.

Kazakhs ratifies agreement with US on air transit of supplies and troops (AP)

Two former top Kazakh judges detained for suspected corruption (RFE/RL)

SOCIETY:

Magnitude 5.4 earthquake hits Kazakhstan – USGS (Reuters)

SOURCE: http://silkroadintelligencer.com/2011/05/04/kazakhstan-daily-news-roundup-may-4-2011/

Kazakhstan Daily News Roundup – April 27, 2011 0

Posted on April 27, 2011 by KazCham

ENERGY:

Former Deputy Minister named head of MangistauMunaiGas
(SRI) – Asset Magauov, former Deputy Minister of Oil and Gas, has been appointed the new head of MangistauMunaiGas, a subsidiary of Kazakhstan’s national oil and gas company KazMunaiGas.

BUSINESS AND ECONOMY:

BTA wrote off $3.3 billion in last 12 months
(SRI) – BTA Bank, Kazakhstan’s third-largest by assets, wrote off KZT481 billion ($3.3 billion) of loans in the 12 months to April 1, Bloomberg reported on Tuesday.

Sberbank aims to triple investment in Kazakhstan
(Reuters) – Sberbank’s Kazakh unit aims to grow net income this year by carving a larger niche in the local market and together with its Russian parent plans to boost investment in the country to almost $1 billion.

Kazakhstan said to seek sale of Alliance Bank stake to EBRD after bailout
(Bloomberg) – Kazakhstan wants to sell a stake in Alliance Bank to the European Bank for Reconstruction and Development (EBRD), potentially making it the first of the Kazakh banks that defaulted during the financial crisis to attract an international investor, said three people familiar with talks.

Kazakhstan’s ATF Bank plans $276-million stock issue
(Reuters) – Kazakhstan’s ATF Bank , majority owned by Italian bank UniCredit SpA , plans to raise $276 million by issuing 7.66% of its ordinary shares.

EBRD extends trade finance guarantee facility to VTB Kazakhstan
(SRI) – The European Bank for Reconstruction and Development (EBRD) has extended a $20-million trade finance guarantee facility to VTB Kazakhstan.

Halyk Bank allocates $37.8 million for 2010 dividend
(SRI) – Halyk Bank, Kazakhstan’s second largest lender by assets, said on Tuesday it would allocate KZT5.5 billion ($37.8 million) from its 2010 net profit to pay dividends on its preferred shares.

Kazakh 2011 GDP growth may accelerate to 7% – Kelimbetov (Reuters)

National Bank of Kazakhstan: Exchange rates April 27, 2011 (Kazakhstan Today)

Indicators – April 26, 2011 (Reuters)

METALS AND MINING:

KazakhGold reduces net loss by 60% in 2010
(SRI) – KazakhGold, the Kazakhstan-focused subsidiary of Russian miner Polyus Gold, reported a net loss of $57.3 million in 2010, compared with a loss of $143.7 million in 2009.

SOCIETY:

High rollers hit Kaz Vegas, a far cry from Las Vegas (EurasiaNet)

REGIONAL:

Energy-rich Central Asia, Gulf states plan new rail route (Reuters)

Disappointed by West, Uzbekistan turns to China (AFP)

Turkmen president hosts horse beauty contest (AFP)

SOURCE: http://silkroadintelligencer.com/2011/04/27/kazakhstan-daily-news-roundup-april-27-2011/

Kazakhstan Daily News Roundup – March 16, 2011 0

Posted on March 16, 2011 by KazCham

Kazakhstan Daily News Roundup – January 20, 2011 0

Posted on January 20, 2011 by KazCham

HEADLINES:

Kazakhstan recovers $143 million from Karachaganak venture – customs committee
(SRI) – Kazakhstan’s customs authorities recovered KZT21 billion ($143 million) in 2010 from Karachaganak Petroleum Operating (KPO), the Western-led consortium developing the Karachaganak gas condensate field, the customs committee said in a statement on Wednesday.

Russian group buys Ablyazov’s flagship real estate project in Moscow
(SRI) – Eurasia Logistics, controlled by Mukhtar Ablyazov, the fugitive former head of Kazakh BTA Bank, has sold the Northern Domodedovo logistics center in late 2010, Russia’s RBC Daily newswire reported last week.

Unicredit dismisses talks of selling Kazakhstan subsidiary
(SRI) – Unicredit, the Italian banking group, has no plans to exit Kazakhstan or any other Eurasian markets, the head of the group’s Central and Eastern Europe division said on Wednesday.

BUSINESS AND ECONOMY:

Halyk Bank to issue 10-year Eurobonds (SRI)

National Bank of Kazakhstan: Exchange rates January 20, 2011 (Kazakhstan Today)

Indicators – January 19, 2011 (Reuters)

POLITICS:

Kazakh rights activists say Zhovtis parole denial linked to referendum (RFE/RL)

Former Kazakh officials on trial for ‘high treason’ (RFE/RL)

REGIONAL:

Gazprom to buy more Central Asian gas in 2011 (Reuters)

Shifting Afghan drug trade threatens Central Asia (Reuters)

Source: http://silkroadintelligencer.com/2011/01/20/kazakhstan-daily-news-roundup-january-20-2011/

Kazakhstan Daily News Roundup – January 11, 2011 0

Posted on January 11, 2011 by KazCham

HEALINES:

Halyk mulling Eurobond; appoints managers
(SRI) – Halyk Bank is reportedly considering a Eurobond issue, Halyk Finance, the Kazakh bank’s investment banking subsidiary, said on Monday.

Oil and gas production rises in 2010
(SRI) – Kazakhstan’s oil and gas condensate production reached 79.5 million tonnes in 2010, up 4% from the previous year, the State Statistics Agency reported.

BUSINESS AND ECONOMY:

Kazakhtelecom preliminary income $210 million in 2010 – CEO (SRI)

Kazakhstan Temir Zholy income triples in 2010 (SRI)

First Kazakhstan-made Talgo train to be put into service in 2011 – KTZh head (Interfax)

Kazakhstan industrial output rose 10% in January to December (Bloomberg)

Kazakhstan to allocate over KZT262 billion for road development in 2011 (Interfax)

National Bank of Kazakhstan: Exchange rates January 11, 2011 (Kazakhstan Today)

Indicators – January 10, 2011 (Reuters)

POLITICS:

Kazakhstan to chair OSCE forum for Security Cooperation in 2011 (TREND)

SOURCE:  http://silkroadintelligencer.com/2011/01/11/kazakhstan-daily-news-roundup-january-11-2011/

Back to Growth 0

Posted on January 05, 2011 by KazCham

As Kazakhstan emerges from the economic slowdown, the country is moving from strength to strength and is working to diversify and industrialize its economy. Clare Nuttall reports

THE UPTURN IN commodity prices in late 2009 was a considerable boost for the Kazakh economy, immediately creating confidence that the crisis was over. With the restructuring of debt at two top banks, the foundations are now being laid for future growth.

This optimism was vindicated in the first quarter of 2010, when according to government data, GDP grew by 7.1 percent year-on-year. “The major economic figures are positive,” says Grigori Marchenko, governor of the National Bank of Kazakhstan, the central bank.

Kazakhstan has maintained a high level of reserves thanks to the rise in oil prices. As of February 2010, the central bank’s net reserves were more than $27.5 billion, and the National Fund’s reserves more than $25.2 billion – totaling $52.7 billion. This was somewhat higher than the pre-crisis level of $47 billion despite the use of National Fund money to support the economy during late 2008 and 2009. In addition to injecting liquidity into the top four banks, the Kazakh government, through the Samruk-Kazyna state welfare fund, also provided a multi-billion dollar support package. Directed at sectors including real estate, agriculture and infrastructure, the package helped to shore up the economy and keep unemployment under control during the first three quarters of 2009.

The problems in Kazakhstan’s banking sector are now close to resolution, with an agreement on the restructuring of Alliance Bank’s debt already signed. The creditors of Kazakhstan’s largest defaulter, BTA Bank, were due to restructure the bank’s $10 billion of debt over the summer. It is expected to remove much of the uncertainty that plagued the market through 2009.

The government’s focus is now on encouraging banks to start lending again, in order to channel funds into the real economy. The country’s top banks including Halyk Bank, Bank CenterCredit, and ATF Bank have substantial liquidity but so far have been cautious about lending. “The key objective for 2010 is to motivate banks to lend again,” says Marchenko.

So far the economic recovery has been largely linked to higher commodity prices. In addition to oil and gas, Kazakhstan has also made progress with production of other commodities. It overtook Australia and Canada to become the world’s largest uranium producer in 2009, and data for the first

quarter of this year showed a 63 percent rise in uranium production. The country’s largest diversified mining companies ENRC and Kazakhmys also reported an increase, and are pushing ahead with major investment projects.

Within the oil and gas sector, the opening of two pipelines at the end of 2009 open up the potential for exports to China. The Kenkiyak-Kumkol oil pipeline links existing pipelines in Kazakhstan, making it possible to export oil from west Kazakh oilfields to China, as well as to deliver oil to South Kazakhstan. The Central Asia-China gas pipeline, which opened in December 2009, runs from Turkmenistan via Uzbekistan and Kazakhstan to China.

While there have been some cutbacks to investment in the hydrocarbons sector, international investors have been under considerable pressure to keep up with their investment commitments. The massive offshore Kashagan development is due to start commercial production in 2012 and provide a major boost for the Kazakh economy.

The government has already given considerable thought to how to efficiently channel revenues from Kashagan into the wider economy. On January 21, President Nursultan Nazarbayev outlined plans to diversify and industrialize the economy in his annual state of the nation address, which set out the country’s development aims for the next decade.

“We need, first, to prepare the economy for the post-crisis development, then to achieve steady growth of the economy through forced industrialization and infrastructure development,” Nazarbayev said in his address.

“Thirdly, to actively invest in the future to achieve competitiveness of our human capital, fourthly, to provide Kazakhstani citizens with quality social infrastructure, housing and utilities. Fifthly, we must strengthen international cooperation, increase our national security, and further develop international relations.”

Some $8 billion is due to be transferred each year from the Nation Fund to the budget, with most of the money due to be used for industrialization programs; 162 projects, with a total cost of 6.5 trillion tenge, have been identified. The main aims include the upgrade of Kazakhstan’s existing petrochemicals plants, the construction of a new gas processing plant, and the completion of new power stations at Balkhash, Moinak and Ekibastuz. Development targets for the processing, agriculture, industry, energy and transport sectors have also been set.

“In the past there have been various diversification programs that for one reason or another did not succeed. The newly announced program is more promising,” says Michael Weinstein, the European Bank for Reconstruction and Development’s country director for Kazakhstan. “The priority sectors Nazarbayev has selected are the right ones. Rather than looking at high-tech sectors, the government is targeting sectors such as pharmaceuticals, chemicals, petrochemicals, metals, construction materials and fertilizers – the things the country needs.”

In addition to state funding, the government also hopes to attract foreign investment for key projects. The country already has a long-term goal of entering the top 50 countries on the World Bank’s Doing Business index (in 2010 it was in 63rd place). There are also specific plans to cut the cost of starting a business by 30 percent in the 2010 financial year.

Kazakhstan is in discussions with around 70 companies presently looking to sign new deals in the country, according to Timur Nurashev, chairman of the investment committee within the Ministry of Industry. “There are large and medium-sized companies, in chemicals, tourism, food production, machinery, metallurgy, light manufacturing and consumer products, who are really interested in investing,” he says. “They are American, Turkish, Korean, European and Chinese.”

A new law on special economic zones (SEZs) is currently being drawn up and is due to be considered by the Kazakh parliament within the next six months. A new SEZ for metallurgy may be built in the northern city of Pavlodar, and a second on the Chinese border.

In January, Kazakhstan became a founding member of the Customs Union, also comprising Russia and Belarus. It is hoped this will encourage investment to international firms planning use the country as a base for the entire common market. The government is also planning to continue with negotiations to enter the World Trade Organization.

“Kazakhstan is a good platform for companies to enter the Russian market,” says Nurashev. “We are positioning Kazakhstan not only as a market of 16 million, but 170 million with Russia and Belarus. It is also a gateway to the Central Asian region.” ?

Clare Nuttall is an Almaty-based correspondent for Business New Europe.

SOURCE: Invest in Kazakhstan 2010.



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