Tag Archives: sovereign wealth fund

Kazakh airline to prepare an IPO

JUNE 16 2016 (The Conway Bulletin) – Peter Foster, CEO of Kazakhstan’s flagship airline Air Astana, said the company will seek financial advisors this autumn to prepare an IPO in 2018. Mr Foster said that the company will list in Kazakhstan and in other more liquid markets, such as London or Singapore. Britain’s BAE Systems owns 49% of Air Astana, Kazakhstan’s sovereign wealth fund Samruk-Kazyna owns 51%.

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(News report from Issue No. 285, published on June 17 2016)

Kazakh President orders $712m economic stimulus

ALMATY, JUNE 15 2016 (The Conway Bulletin) — With economic activity in Kazakhstan faltering, President Nursultan Nazarbayev ordered his government to spend 240b tenge (around $712m) on supporting small and medium-sized companies as well as building thousands of new houses.

Mr Nazarbayev is under increasing pressure to shore up his support by boosting the economy against a 50% fall in the value of the tenge, rising unemployment and inflation. In April and May anti-government protests swept across the country in the most widespread anti-government challenge to Mr Nazarbayev’s 25-year rule.

The Presidential press service said the cash would come from the Republican budget, a phrase that Kazakh civil servants use to refer to Kazakhstan’s sovereign wealth fund.

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(News report from Issue No. 285, published on June 17 2016)

Kazakh Samryk-Kazyna’s income to fall

APRIL 22 2016 (The Conway Bulletin) – Samruk-Kazyna, Kazakhstan’s sovereign wealth fund, said its income in 2016 would fall by around 65% due to an economic downturn, low commodity prices and high debt. In 2015, Samruk-Kazyna’s income stood at 308b tenge (around $1b), up 30% from 2014. Samruk-Kazyna also projects a slower growth in its assets. By 2020, the fund expects to hold 23.7 trillion tenge ($71b).

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(News report from Issue No. 278, published on April 29 2016)

Moody downgrades Kazakh sovereign debt

APRIL 22 2016 (The Conway Bulletin) – Ratings agency Moody’s downgraded Kazakhstan’s sovereign debt rating to Bbb3 from Bbb2 and gave it a negative outlook because of sustained low oil prices and a currency devaluation last year which is said had weakened Kazakh banks. Moody’s said: “The negative outlook reflects ongoing pressure on the banking sector’s solvency, which also constrains the growth outlook and poses financial and fiscal risks.”

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(News report from Issue No. 278, published on April 29 2016)

Kazakhstan’s fund invests in Balkhash

APRIL 21 2016 (The Conway Bulletin) – Samruk Energo, a subsidiary of Kazakhstan’s sovereign wealth fund Samruk-Kazyna, said it paid 11b tenge ($33m) to double its stake in the Balkhash Thermal Power Plant project to 50% minus one share. It did not say who it bought the stake from although last year Korea-based Samsung Engineering said it wanted to quit the project. The new Balkhash power plant will cost around $4.2b to build, according to Samruk Energo’s latest estimates.

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(News report from Issue No. 277, published on April 22 2016)

Azerbaijan to cut funds for overseas study

APRIL 15 2016 (The Conway Bulletin) – Azerbaijan is phasing out a programme that funded overseas study for undergraduates in order to save money during an increasing vicious economic downturn.

Mikhail Jabbarov, Azerbaijan’s minister of education, said funding for bachelor level programmes has dried up.

“The ministry is developing a new format of the program, which envisages education at foreign higher educational institutions only for PhD and Master’s Degrees,” Mr Jabbarov told media.

The government’s stated objective is to attract more foreign professors to Azerbaijan to allow undergraduates to receive high-level tuition without having to study abroad.

What the government cannot openly say is that the programme has become unsustainable because of a sharp drop in oil prices that has dragged down its economy.

The ministry of education’s overseas undergraduate programme is one of two channels that Azerbaijani youth can use to access scholarships to study abroad.

SOFAZ, the country’s oil fund, had also established an eight-year programme in 2007 to fund education abroad. But that programme is now being wound up and is unlikely to be extended.

In the first quarter of 2016, SOFAZ said it spent 5m manat ($3.3m) paying fees for Azerbaijanis studying abroad.

Analysts have said that if both programmes were cut, Azerbaijan would, effectively, be isolating itself from the West.

The government has already cut several domestic social projects, including updating broadband internet across the country and investments in care homes, roads and railways, to cut costs.

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(News report from Issue No. 277, published on April 22 2016)

Azerbaijan’s SOFAZ invests abroad

APRIL 13 2016 (The Conway Bulletin) – SOFAZ, Azerbaijan’s state oil fund, said it wants to diversify its investment portfolio and increase its investment in equities. According to the latest investment policy, it plans to raise to 15% from 10% the share of the Fund it invests in equities. According to the Fund’s report, it allocated just 6.5% of its portfolio into equity investments in 2014. Equities are considered riskier than fixed-income securities, real estate and gold, SOFAZ’s preferred investment destinations.

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(News report from Issue No. 276, published on April 15 2016)

Azerbaijan’s SOFAZ to spend big

MARCH 18 2016 (The Conway Bulletin) – Azerbaijan’s President Ilham Aliyev signed a decree to set SOFAZ’s spending at 10.7b manats ($6.5m) and revenues at 4.6b manats ($2.8b) for 2016, meaning that the fund will post a loss for the second consecutive year. Assets held by SOFAZ, Azerbaijan’s sovereign wealth fund, dropped by 9.5% in 2015 to $33.6b because it paid around 8b manats ($5.16b) into the state budget to help the country weather the economic downturn.

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(News report from Issue No. 273, published on March 25 2016)

Azerbaijan’s SOFAZ drops 10%

MARCH 1 2016 (The Conway Bulletin) – Assets held by SOFAZ, Azerbaijan’s state oil fund dropped by 9.5% in 2015 to $33.6b. SOFAZ earns cash from oil and gas sales and transit fees. It spends on various social projects and has also been buying up manat to support it against the US dollar. The drop in SOFAZ’s net worth reflects the economic downturn and slump in global oil prices.

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(News report from Issue No. 270, published on March 4 2016)

Kazakhstan cuts funding to sport

FEB. 25 2016 (The Conway Bulletin) – Samruk-Kazyna, Kazakhstan’s sovereign wealth fund, said it will cut funding to the Astana Presidential Sports Club, an umbrella organisation that sponsors everything from cycling to football to boxing. The club was officially set up in 2013 to promote Kazakhstan and Astana under the country’s yellow and blue colours. It received large sums of money. Successes included winning cycling’s Tour de France and FC Astana playing in the Champion’s League, football’s most high profile competition. Kazakhstan has been looking for ways to cut costs as the economic downturn bites.

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(News report from Issue No. 269, published on Feb. 26 2016)