Page 18 - Kazakh Outlook 2022

6.2 Stock Market

Kazakhstan has been hoping to expand its second bourse, the Astana
International Exchange (AIX), to create a functional securities exchange
market—as compared to the Kazakhstan Securities Exchange (KASE)
in Almaty, seen as Kazakhstan’s first failed attempt at kicking off a
bourse. The AIX’s potential for expansion, however, relies on the
Kazakh government’s willingness to continue IPOing stakes in major
state-owned firms in order to draw much needed liquidity. Kazakhstan’s
big privatisation programme has continued to suffer postponements
introduced by authorities due to a lack of favourable market conditions
in the past few years. Given the situation with the coronavirus pandemic
and associated uncertainties, it is likely that the authorities may
postpone planned listings once again in 2022.

The only glimmer of an IPO moving ahead comes in news from
Bloomberg that state-owned Kazakh airline Air Astana is looking to
carry out an IPO in 2022. According to four anonymous people, the firm
has approached banks, but talks are still at an early stage for a share
sale, sources told the news agency. The deal could be difficult to sell
given the ongoing impact of the pandemic on global air travel. Two of
the sources said there was no certainty that Air Astana would decide to
proceed with a share sale in 2022.

6.3 Foreign Investment

The volume of foreign direct investment (FDI) in the Kazakh economy
grew by over 30% y/y in the first half of 2021, according to latest official
data.

The increase was mostly seen in the fields of information and
communications (9.4-fold y/y increase), accommodation and food
services (+66.1% y/y) and manufacturing (+57.2% y/y). Fixed
investment in non-extractive sectors grew by over 11% y/y. A dynamic
growth in investments was noted in the sectors of construction
(2.1-fold), manufacturing (+50.5%), agriculture (+40.5%) and trade
(+34.2%), according to official data.

As seen with the swift recovery in FDI during 2021, further
improvements in global economic conditions in 2022 coupled with
further removal of restrictions and a rebound in global demand should
improve prospects for FDI growth in Kazakhstan.

The Kazakh Ministry of Foreign Affairs said in May that it anticipated

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