Kazakhstan

Kazakhstan May Merge Oil, Pension Funds

Kazakhstan may merge its $23 billion state pension fund with the $57 billion oil fund in order to streamline their management, President Nursultan Nazarbayev said on Monday, Reuters reported. The state pension fund suffered a credibility crisis this year when its former chief executive Ruslan Yerdenayev and other managers were charged with embezzlement over a purchase of bonds issued by a local company in exchange for bribes. The trial started last month. Lawyers have told Kazakh media the executives - who have been sacked by the fund - have denied the charges against them.
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Kazakhstan is running out of time to get the banking system back on its feet. Even after undertaking its biggest rescue since the 2009 global credit squeeze with a 2.4 trillion-tenge ($7.6 billion) bailout of Kazkommertsbank, the rest of the nation’s lenders will require at least 500 billion tenge more to mend balance sheets, according to National Bank of Kazakhstan Governor Daniyar Akishev. But the state aid will come with strings attached, Bloomberg News reported.
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Shockwaves from a default by the biggest bank in Azerbaijan are spreading to its neighbor on the opposite shore of the Caspian Sea, Bloomberg reported. Already burned by the International Bank of Azerbaijan’s missed payment and its effort to wrest a 20 percent principal writedown in a proposed debt restructuring, investors are starting to wonder if Kazakhstan’s Kazkommertsbank is the next domino to fall. Its $250 million of subordinated bonds are trading below par only two weeks before maturity, a sign the bank’s ability to come through is in doubt.
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The bankruptcy of Toshiba Corp's U.S. unit Westinghouse Electric Co will have no negative impact on the finances of its minority shareholder Kazatomprom, the Kazakh uranium miner said on Wednesday. Kazatomprom said in a statement that it held a put option that would allow the firm to sell its entire 10 percent stake in Westinghouse back to Toshiba at the price of the original purchase, Reuters reported. Kazatomprom, which paid $540 million for the stake in 2007, did not explicitly say whether it would execute the option.
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Kazakhstan’s Halyk Bank may have to inject at least 230 billion tenge ($738 million) into Kazkommertsbank, the troubled lender it’s set to buy for less than $1 after a state bailout, according to two people with knowledge of the matter. The cash, coming after the government stumps up 2.4 trillion tenge to shift off Kazkommertsbank’s balance sheet its loans to BTA Bank, would enable the lender to keep operating, the people said, asking not to be identified given the sensitivity of the matter.
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Kazakhstan is considering a 2.1 trillion-tenge ($6.5 billion) plan this year to restore banks to health, widening its budget deficit and tapping its oil wealth fund to cover the costs, Bloomberg News reported. Finance Minister Bakhyt Sultanov proposed the additional spending Monday in a presentation to the cabinet, according to a website statement.
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For a man working to restore investor confidence in Kazakhstan’s central bank, the profit that governor Daniyar Akishev made betting bank money on the correct outcome of Britain’s Brexit referendum will go some way to convincing sceptics that he is a man with the smarts for the task, the Financial Times reported.
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Kazakhstan’s president certainly caught the imagination of the City of London. In closed-door meetings last week, Nursultan Nazarbayev and other Kazakh officials said the commodity-rich central Asian nation would unload hundreds of companies, including its industrial crown jewels, in the most ambitious privatisation drive since its independence from the Soviet Union, the Financial Times reported.
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Kazakhstan is set to embark upon its most ambitious privatisation plan since independence from the Soviet Union in 1991, offering stakes in its largest state-owned enterprises to international investors in preparation for eventual stock market flotations, officials told the Financial Times on Tuesday. The move coincides with a warning from Nursultan Nazarbayev, president, that the world faces “economic turbulence” that for many emerging market countries could dwarf the impact of the global financial crisis of 2008-09.
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In Texas or the North Sea, oil companies struggling with falling prices are firing thousands of employees. In Kazakhstan, it is not so simple, the Financial Times reported. The central Asian nation was a poster child of the past decade’s oil boom, building a futuristic capital on the steppe with its hydrocarbon riches, but this year’s tumble in prices has pushed many of Kazakhstan’s Soviet-era oilfields into the red.
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