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bne March 2018 Companies & Markets I 15
Kazakhstan to spend $60mn annually for three years on Astana International Financial Centre
bne IntelliNews
Kazakhstan will allocate around $60mn for the development of the recently launched Astana International Financial Centre (AIFC) over the next three years, Astana Times reported on February 12, citing AIFC Governor Kairat Kelimbetov.
The AIFC is a financial services hub to be run as a free economic zone modelled on Dubai’s International Financial Centre. The AIFC's big selling point is its legal regime based on English common law. That has stirred some interest among international investors who are entitled to tax breaks. The government is targeting legal and financial services
“The AIFC also holds cryptocurrency ambitions”
companies, international banks and traders. The AIFC nominal head is Lord Harry Kenneth Woolf, who was appointed the presiding judge in December. The financial services hub is seen by some as a potential tax haven for investors, as the tax authorities tighten their inspection regime.
“[Similarly to] the world’s leading financial centres created recently in such cities as Dubai and Abu Dhabi, we plan to not depend on budget financing in three to five years, but to use the opportunities of private investments,” Kelimbetov said.
Kazakh authorities say they hope to attract $40bn in investments into the country within the next 10 years.
The AIFC, Bloomberg and Atameken Business Channel (ABC- TV) have signed a tripartite partnership agreement, ABCTV said in a statement on January 18. Bloomberg will also open an office in Astana. While Bloomberg is set to be AIFC’s foreign media partner, ABCTV will stand as its local counterpart.
Among recent projects is an international IT start-up hub as well as a “green” technologies centre developed in partnership with the UN. The two projects alone are expected to attract invest- ments worth $40bn into the country, according to Kazakh media.
The AIFC website announced in December that the financial centre has entered into a partnership with the Microsoft BizSpark programme for the duration of one year. Under the
programme, fintech start-ups “get free licensed Microsoft software for design, development, product testing and
placing services on the internet, as well as expert support
of corporation and its partners by participating in Microsoft BizSpark”. Moreover, the AIFC said in December the fintech start-ups will also benefit from the financial hub’s cooperation with Amazon Web Services (AWS). Specifically, selected startups will participate in the AWS Activate programme, which is aimed at supporting young companies by providing them with free access to cloud resources and technological infrastructure necessary for business development.
The AIFC planned to launch a new stock exchange in January, but the launch may have been at least partially delayed as
the news of the plans for its launch are still circulating in the Kazakh media. No official statement has been made regarding its launch since the beginning of January. The country's existing bourse in the largest Kazakh city Almaty is widely regarded as a flop and analysts are none too sure that this second go in the capital will be a success either.
However, the new exchange is 25.1% owned by the Shanghai Stock Exchange (SSE), which might lend it some credence.
Moreover, Nasdaq stock exchange has signed an agreement in May last year to provide trading technology infrastructure to AIFC and has officially become a shareholder and “strategic partner” for the AIFC’s new bourse. Nasdaq’s exact share in the Astana International Exchange (AIX) is unclear.
The bourse is aiming to attract most of the major flotations planned under Kazakhstan’s privatisation programme. Sover- eign wealth fund Samruk-Kazyna is currently preparing seven state-owned companies for IPOs. The government, which
has contended with a plunge in revenues from oil, previously said it plans to sell stakes of at least 25% in 45 large state- owned companies. Initially, it hopes to attract investors via
the planned IPOs of Air Astana and the world’s second largest uranium miner Kazatomprom in 2018. Kazatomprom has already hired JP Morgan as its lead adviser for a London listing planned for 2018.
The AIFC also holds cryptocurrency ambitions. Maltabased investment company EXANTE signed in October a memorandum of cooperation on developing Kazakhstan’s cryptocurrency markets as well as “positioning the AIFC as an international financial technology centre”.
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