Invest in Kazakhstan
The dynamics of the rapidly changing Kazakh market require the advice of a local professional player with the necessary knowledge, skill, and experience. We work with foreign investors to identify investment projects that meet their needs, maximize the support they receive from the Kazakh government’s foreign investment initiatives, and ensure their compliance with all the necessary laws and regulations.
Kazakhstan’s Financial Sector
Kazakhstan has created a sound financial system and stable macroeconomic framework. Official policy supports credit allocation on market terms and the further development of legal, regulatory, and accounting systems that are consistent with international norms.
A general attitude of authorities toward foreign portfolio investors is positive, though foreign clients may only trade via local brokerage companies or after being registered as members of the Kazakhstan’s Stock Exchange (KASE). The KASE, which has operated since 1993, is an insignificant source of investment. The number of listed companies dropped from 354 in 2010 to 142 in 2017. The government’s 2013 decision to consolidate all pension savings into a single state-owned pension fund practically froze the stock market, as private pension funds, which until that time were Kazakhstan’s main institutional investors, ceased to operate. Trading is dominated by block trades, and the spreads are extremely wide. Traditionally, the foreign exchange is a main segment of trades. In 2017, 52.6% of KASE trades were in foreign exchange, repo transactions comprised a further 46.4%, and government and corporate securities trading accounted for roughly 1.0% of KASE volume. By the end of February 2017, the stock market capitalization was $47.4 billion, and corporate bond market capitalization was $24.7 billion.
The National Bank of Kazakhstan owns 50.1% of KASE shares and plans in the future to reset the stock exchange through creating an alternative stock market in Astana as a part of the International Financial Center project.
Astana International Financial Center
Astana International Financial Centre (AIFC) is a financial hub for Central Asia, the Caucasus, EAEU, the Middle East, West China, Mongolia and Europe. The Centre will be situated within EXPO-2017 and supported by modern infrastructure & the latest technology.
Kazakhstan’s largest companies turn to international capital markets to meet their financing needs. With rapid economic growth and a highly attractive pipeline of IPOs/SPOs in the Central Asia, there is an increasing need for liquid and efficient regional stock market.
Developing the AIFC capital market is a major strategic direction whose successful implementation is crucial for the AIFC. The primary objective is to develop a liquid and well-balanced capital market with a broad range of financial instruments. A new high-tech exchange platform based on best international practice will be created within the AIFC in cooperation with a strategic partner from among the leading stock exchanges.
The AIFC promotes the development of Asset Management industry not just in Kazakhstan, but in the region as a whole. Astana has competitive advantages that can establish the city as a regional centre for asset management. These advantages include a significant amount of funds available for management, a favourable tax climate, as well as economicl and political stability. Global leading asset management firms are being attracted to the AIFC,to establish the required financial infrastructure for the creation of a successful financial centre.
Islamic finance is one of the major strategic directions that provides financial solutions that are in accordance with Islamic law.
Five countries – Malaysia, Saudi Arabia, Iran, the United Arab Emirates and Kuwait – account for about 80% of the Islamic finance market.
The AIFC aims to to become a regional hub for Islamic finance, creating favourable conditions for the operation and development of Islamic financial institutions.
FinTech is a segment of companies that provides new financial solutions by leveraging technology and is currently considered as the fastest-growing sector - with total investments growing from $3.9 billion (2013) to $19.1 billion (2015). The FinTech sector has a great potential to enhance the ever-evolving financial network by providing increased access to the financial system, increased competition, lower costs and improved risk management.
FinTech is quickly gaining popularity and has become one of the main strategic directions activities for the developemtn of the AIFC. The AIFC contributes to FinTech development in the Central Asia by creating the most favorable conditions for FinTech startups - including modern infrastructure, flexible regulations and investment promotion.
High Net-Worth Individuals from Central Asia and EAEU own significant accumulated wealth;
and mostly place their liquid assets on deposit, or use the services of foreign banks - due to the limited number of investment solutions in the local market.
The AIFC supports the development of the Private banking sector in conjunction with the development of the asset management market and expertise. The AIFC opens investment opprtunities for HIgh Net-Worth Individuals in the region , and invites international Private Banking firms to set up their offices within the Centre.
"Green" finance — is a new and dynamic trend in the world of the financial industry, catalysing transition to the "green" economy and sustainable development. "Green" financial products and services consider environmental factors, provide support for environmentally responsible investments, and stimulate the development of low carbon technologies, projects, industries, and business.
In continuation of the “Future Energy” theme of the EXPO – 2017 theme , the AIFC facilitates the development of “green” finance by providing the necessary conditions and infrastructure.
EDB: Kazakhstan's economy to grow by 3.2%