Three years have passed since the launch of Kazakhstan’s Astana International Finance Centre (AIFC). To great fanfare, it arrived complete with a new bourse, the Astana International Exchange (AIX), partly owned by the
At face value, there appear to be plenty of promising developments related to the financial centre—mainly with respect to the AIX. This year, for example, Kazakhstan’s
Last year, the bourse was undoubtedly and substantially boosted by the double-listing of Kazakh fintech firm Kaspi.kz’s initial public offering (IPO) on the
Other milestones of the AIX—part of a special jurisdiction regime that is governed in accordance with English Common Law—include the debut green bonds, the listing of the AIX's first Chinese yuan-denominated (RMB-denominated) bond and the listing of
The bourse also listed shares of Bank Center Credit (BCC), which became the first issuer listed on AIX based on the Regional Equity Market Segment (REMS), introduced in 2020. It aims to grant mid-cap companies access to a broader investor base and the equity capital market. In November, the AIX, in partnership with Kazakh investment firm BCC Invest, announced the listing of new exchange-traded notes. These are BCC Global Exchange Traded Notes (ETNs) linked to the performance of one of Kazakhstan’s largest interval mutual funds, “CenterCredit-Valyutniy”.
Doubts and hopes
However, the AIX appears to be far from acquiring the liquidity needed to become a market that justifies its existence within the Kazakh economy.
Much of the AIX’s potential for expansion into a functional securities exchange market—as compared to the Kazakhstan Securities Exchange (KASE) in
Since 2018, Nur-Sultan’s privatisation programme has only managed to list a 25% stake in the world’s biggest uranium miner Kazatomprom in a double listing shared between the LSE and the AIX, while making some cross-listings of mobile operator Kcell and
The programme originally hoped to list many more major firms, including national carrier Air Astana and near monopolist of the local telecoms market
The opposition-run web-based
“In our estimation, such turnovers are quite decent for a stock exchange operating in a rural area of
“Moreover, we strongly suspect that the monthly maintenance costs of Astana International Exchange are quite comparable to its monthly turnover,”
However, the analytical service concedes that some measure of progress still appears to be visible.
“Nevertheless, we must admit that the turnover of Astana International Exchange is growing. From the [AIX’s] press release on the results of activities as of
“The changes we have seen over the past six to nine months have actually strengthened the AIX position [in the eyes of] both global and domestic investors,”
According to AIX’s own
Some observers do appear to be keeping to an optimistic outlook on the AIX.
Independent financial analyst Adilzhan Kozhabergenov told local business magazine Kapital.kz in
Optimism or not, though, AIX's progress alone may not justify the creation and continued operation of its umbrella, the AIFC.
AIFC's viability
“Investments in the AIFC will not be tantamount to investments in the country's economy, moreover, they are unlikely to go outside the [AIFC’s jurisdiction] and will not have a positive impact on the level, efficiency and quality of the national economy, not to mention the standard of living for the bulk of Kazakh citizens," the analytical platform noted.
These criticisms of the AIFC are, of course, directed at the financial centre's viability when it comes to
One example can be seen in a 2019 travel report for OnFrontiers by a regional research analyst,
"What was interesting is that in the 21st Century digital economy in which we live, companies incorporated in the AIFC are required to have a physical office location in Astana with employees in the office. Perhaps that partially explains why four months after the opening of the AIFC there were only 12 registered companies," Osheroff mentioned.
Worth noting is that the attempts to properly kick off the operation of the AIFC and the AIX have been distorted by the global pandemic in 2020 and 2021, thus only time will tell if the aspiring regional financial hub will deliver on its promises in the post-COVID-19 world.
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