FEAS Yearbook FEAS Yearbook 2012 | Page 77

FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2012 KAZAKHSTAN STOCK EXCHANGE CAPITAL MARKET DEVELOPMENT AND ECONOMIC OUTLOOK Economic and Political Environment 2011 was a year when Kazakhstan celebrated its 20th Independence anniversary. During the years of independence Kazakhstan managed to achieve economic growth of average 8%, political stability, supported by large natural resources reserves and timely reforms. A number of developments have taken place in the political system of the country. Early presidential election was conducted in April 2011 and incumbent President Mr. Nursultan Nazarbayev has won it with astonishing 95.5% votes. This proves the ubiquitous support he has among the population and approval of his actions and political course. The lower house of Parliament, Mazhilis, was dissolved in November 2011, and on January 15, 2012, an early election was held. This resulted in changes in political parties representation in Mazhilis, with three parties instead of one. Subsequently, this led to changes in the Cabinet, with Prime-Minister unchanged. Continuing integration within the Eurasian Economic Community framework leads to establishing Common Economic Space (CES) between Republic of Kazakhstan, Russian Federation and Republic of Belarus that will fully operate from July 2012. Under CES three countries will establish comfortable conditions for free trade and movement of goods, services, capital and labor. CES is the result of successful operation of Customs Union and is developed on the principles of the World Trade Organization. In 2011, Kazakhstan has made an important step towards development of Islamic financing. In the beginning of June 2011, the World Islamic Economic Forum has taken place in Astana, gathering business leaders from more than 50 countries. During the Forum Islamic Development Bank signed contracts to provide US$ 10 ml for development of farm enterprises in Kazakhstan. This event is of a great significance more so due to the plans on formation of the regional center of Islamic financial center in Kazakhstan. It is also worth noting that Kazakhstan will chair the Organization of the Islamic Conference until July, 2012, being the second Central Asian country after Tajikistan to chair it since its inception in 1969. Moreover, European Bank for Reconstruction and Development held their 2011 Annual Meeting in Astana, in May 2011. This event brought together the members of EBRD Board of Governors, leaders in world banking industry, investors, policy-makers and government officials to discuss recovery issues in the region and provide guidance to Bank’s operations for the next period. Economic Performance 2011 was a positive year for Kazakhstan. The planned GDP growth of 7% has been achieved and surpassed – Kazakhstan economy production has amounted to KZT 27.3 tr or US$ 186.20 bn for 2011 with 7.5% growth. The unemployment rate has decreased to 5.4%. Budget deficit has lowered to 0.7% of GDP. Net international reserves have grown to US$ 28.8 bn. National Fund assets have increased to US$ 43.7 bn. Kazakhstan’s trade balance for 9 months of 2011 has already exceeded previous year indicator and has made up to US$ 36.3 bn. Current account surplus has amounted to US$ 11.3 bn for 9 months of 2011. Considering Kazakhstan’s improving fiscal and external flexibility, sizeable natural resources, and high inflow of foreign direct investments, Standard & Poors has increased country’s long- and short-term foreign currency ratings to ‘BBB+/A-2’ from ‘BBB/A-3’. In the same time, Fitch Ratings has upgraded Kazakhstan’s Long-term foreign and local currency Issuer Default Ratings to ‘BBB’ from ‘BBB-’ and ‘BBB+’ from ‘BBB’, respectively. According to the Fitch Ratings GDP growth is expected to be 6% in real terms in the following years while the budget surplus will be obtained even if oil prices will slump to the level of US$ 80 per barrel of Brent crude. KAZAKHSTAN ECONOMIC CHARTS AND TABLES Indicator GDP, US$ bn GDP, Change. % Unemployment, % Budget Balance, % of GDP CPI, % US$/KZT Net International Reserves, US$ bn National Fund, US$ bn Sovereign Debt, US$ bn Export, US$ bn Trade Balance, US$ bn Current Account Balance, US$ bn 2010 2011 145.96 7.0 5.8 -2.5 8.0 147.4 27.7 31.0 21.9 60.8 28.9 3.0 186.20* 7.5 5.4 -0.7 7.4 146.6 28.8 43.7 22.8 66.7** 36.3** 11.3** * Operational data for 2011 (official data will be released in April, 2012) ** Data as of October 01, 2011 Key Information Contacts Financial Institutions’ Association of Kazakhstan www.afk.kz/eng/ National Bank of Kazakhstan www.nationalbank.kz Ministry of Finance of the Republic of Kazakhstan www.minfin.kz Central Securities Depository www.csd.kz Kazakhstan Agency for Financial Market and Financial Organizations Regulation and Supervision www.afn.kz PAGE 75