Home page About us News Contacts
- Astana
kaz rus eng RSS
Foreign experience
Legal consultation
Address bureau
How to support us?

Fitch: Kazakh Bond, FX Move Ease Near-Term Devaluation Risk
Fitch Ratings-New York/London-23 July 2015: Kazakhstan's Eurobond issue and widening of the tenge's trading band reduce the likelihood of a further step devaluation this year, Fitch Ratings says. But the key causes of exchange rate pressure remain. 
Kazakhstan last week issued USD4bn in 5.125% 10-year and 6.5% 30-year bonds from its USD10bn medium-term note programme. The National Bank of Kazakhstan raised the tenge's upper trading limit to 198 tenge per dollar, leaving the lower limit unchanged at 170. 
The hard-currency influx from the Eurobond issue, and the continued policy of controlled depreciation as the central bank shifts toward inflation targeting, limit the risk of another devaluation like that of February 2014. We have therefore revised our end-2015 KZT:USD forecast. We still expect the tenge to weaken and to reach the KZT198:USD limit by end-2015, but this would represent a drop of around 8.5% over the year, rather than the 20% devaluation we had previously factored in. 
Current account balance deterioration will maintain pressure on the tenge. We forecast the balance to swing to a deficit of 3% of GDP in 2015 from the 2.2% surplus in 2014, mainly due to lower hydrocarbon export revenues (export earnings fell 44% year on year in 5M15). The fiscal deficit will widen to 3% of GDP. 
The corridor adjustment is consistent with the gradual move towards inflation targeting by 2020 that the National Bank signalled in May. Greater exchange-rate flexibility would help cushion the economy and public finances from external shocks and could reduce incentives for dollarisation. Sharp devaluations in 2009 and 2014 have attempted to address the misalignment of the tenge with major trading partners' currencies, but have undermined public confidence in the monetary and exchange rate policy regimes (which we consider weak relative to ratings peers). Dollarisation of deposits was 52% in May, 15pp above the end-2013 level and only slightly below recent peaks. 
The affirmation of Kazakhstan's 'BBB+'/Stable rating in May reflected our view that the strong sovereign balance sheet should be able to withstand recent external shocks, notably the oil price fall, Russian recession, and China slowdown.
Kazakhstan has ample external liquidity - its external liquidity ratio is 255% when the assets of the National Fund are included, against a 'BBB' category median of 144% and an Emerging Europe median of 95%. National Bank foreign currency reserves have been relatively stable since December. The government has also drawn down hard-currency assets from the National Fund, which fell USD4.5bn (6%) in 1H15, to finance the budget deficit.
A low gross general government debt burden of around 15% of GDP in 2014 - although we see this rising towards 20% by 2017, while the National Fund remains broadly stable in dollar terms - gives the authorities headroom for fiscal stimulus. But they are keen to preserve the Fund as a fiscal buffer and have reportedly postponed some of the USD9bn spending it was to finance over 2015-2017. This suggests the authorities are adapting to a lower norm for oil prices, promoting economic reforms to stimulate investment and growth rather than relying on fiscal stimulus.
24 2015 | Viewed: 347 | Press Releases | Read full
Carlsberg Kazakhstan celebrates Irbis brand launch
On July 8 at the hottest summer spell Carlsberg Kazakhstan celebrated the most expected event of the year Irbis  relaunch - its one of the first local beer brands. The relaunch was successfully realized due to new rinser equipment, installed in beer filling department earlier this year. According to the legend, Irbis (translated as snow leopard) descended from the mountains peaks, in order to bring mountainous chill and freshness.
10 2015 | Viewed: 578 | Press Releases | Read full
Fitch Rates Bank Centercredit's Upcoming Local Bonds 'B(EXP)'
Fitch Ratings-Moscow/London-08 July 2015: Fitch Ratings has assigned Bank Centercredit's (BCC) upcoming series 7 senior unsecured local currency bonds under the second bond issuance programme an expected Long-term rating of 'B(EXP)' and an expected National Long-term rating of 'BB+(kaz)(EXP)'. The issue's expected Recovery Rating is 'RR4(EXP)'. The issue's volume is KZT10bn, it matures in ten years and has a 9% coupon paid semi-annually.

The issue's ratings are aligned with BCC's Long-term local currency Issuer Default Rating (IDR) of 'B' and National Long-term rating of 'BB+(kaz)'. BCC's ratings reflect its weak asset quality, moderate capitalisation, modest profitability and near-term business risks stemming from the slowdown in Kazakhstan's economy and lower oil prices. However, the ratings are supported by the bank's reasonable coverage of currently recognised problem loans, track record of continued debt repayments, solid liquidity cushion and limited amount of remaining senior wholesale funding.

Any changes to BCC's Long-term local currency IDR would impact the issue's ratings. The ratings would be downgraded in case of material further asset quality deterioration, capital erosion and/or a liquidity squeeze. An upgrade would require a balance sheet clean-up and/or significant improvements in capitalisation and core performance. 

Primary Analyst
Aslan Tavitov
Associate Director
+7 495 956 7065
Fitch Ratings CIS Ltd
26 Valovaya Street
Moscow 115054
Secondary Analyst 
Konstantin Yakimovich
Associate Director
+7 495 956 9978
Committee Chairperson
Olga Ignatieva
Senior Director
+7 495 956 6906
Media Relations: Julia Belskaya von Tell, Moscow, Tel: +7 495 956 9908, Email: julia.belskayavontell@fitchratings.com  
Date of relevant rating committee: 27 February 2015
Additional information is available on www.fitchratings.com
8 2015 | Viewed: 371 | Press Releases | Read full
Fitch Affirms Russia at 'BBB-'; Outlook Negative
Fitch Ratings-New York/London-03 July 2015: Fitch Ratings has affirmed Russia's Long-term foreign and local currency Issuer Default Ratings (IDR) at 'BBB-' with a Negative Outlook. The senior foreign currency and local currency unsecured debt ratings have been affirmed at 'BBB-'. The Country Ceiling has been affirmed at 'BBB-' and the Short-term rating at 'F3'.
7 2015 | Viewed: 358 | Press Releases | Read full
Shell shareholders at risk from billion dollar Nigerian oil scandal, says Global Witness
AGM call for oil giant to stop lobbying against new transparency laws
19 2015 | Viewed: 346 | Press Releases | Read full
Shell shareholders at risk from billion dollar Nigerian oil scandal, says Global Witness
AGM call for oil giant to stop lobbying against new transparency laws
19 2015 | Viewed: 307 | Press Releases | Read full
Azerbaijan downgraded to candidate country
Azerbaijan was downgraded to candidate country following an EITI Validation which was carried out earlier this year. Validation is the EITIs independent evaluation mechanism and Azerbaijan is the first country to be validated against the 2013 EITI Standard.
16 2015 | Viewed: 401 | Press Releases | Read full
UK passes tough new transparency law for oil, gas and mining companies Big Oil must call off its assault on transparency, says Global Witness
A historic law came into force in the UK today that will help fight poverty and corruption in resource-rich but poor countries said Global Witness, which has been campaigning for such measures for over 16 years. The new rules compel UK oil, gas, mining and logging companies to publish details of the payments they make to governments across the world for access to natural resources. This move will help make hundreds of billions of pounds worth of taxes, royalties and licence fees available to public scrutiny. Currently, such payments are largely made in secret, leaving vast amounts of public money vulnerable to corruption. With 887 million people living on less than US$1.25 a day in resource-dependent countries, the UK rules have the potential to help large numbers of people escape poverty.
4 2014 | Viewed: 827 | Press Releases | Read full
TRACE and Argentine-German Chamber of Industry and Commerce (AHK) Partner to Boost Anti-Bribery Compliance, Due Diligence in Argentine Market
TRACE is pleased to announce a new partnership with the Argentine-German Chamber of Industry and Commerce which has been developed to meet the increasing demand for anti-bribery due diligence and compliance services in Argentina. This partnership marks the first for TRACE in Latin America.
27 2014 | Viewed: 548 | Press Releases | Read full
United Kingdom accepted as candidate of resource transparency body Wednesday
United Kingdom accepted as candidate of resource transparency body Wednesday, 15 October 2014 - The United Kingdom was accepted today as a candidate country to the global transparency standard EITI. It joins the almost 50 countries that have committed to improved transparency of government revenues from the extraction of natural resources. By joining the EITI,
16 2014 | Viewed: 498 | Press Releases | Read full
DR Congo becomes full member of EITI
Mexico City, 2 July 2014. The Democratic Republic of Congo (DRC) was today recognised as a full member of the Extractive Industries Transparency Initiative (EITI). As Compliant with the global EITI transparency standard, citizens of DRC have access to extensive information about how their natural resources are governed. Industry, government and civil society in the country are working together to inform the debate about the management of its oil, gas and mineral resources. The EITI International Board designated the country EITI Compliant at its meeting in Mexico City and congratulated the Government of the DRC for its sustained commitment and leadership in the implementation of the EITI.
3 2014 | Viewed: 520 | Press Releases | Read full
ATFBank JSC to start issuing and servicing UnionPay International cards
In June 2014 ATFBank JSC (the Bank) will launch issuing UnionPay International cards (UPI), acquiring will commence in the end of May.
19 2014 | Viewed: 625 | Press Releases | Read full
Concluding Statement of the 2014 IMF Mission
Republic of Kazakhstan 2014 Article IV Consultation
6 2014 | Viewed: 516 | Press Releases | Read full
Appointment of new Managing Directors of ATFBank JSC
The Supervisory Board of ATFBank JSC made resolution to elect Ms. Rimma Ilyassova to the position of the Managing Director, Member of the Management Board of ATFBank JSC with effect from April 7, 2014 for 1 (one) year.
11 2014 | Viewed: 593 | Press Releases | Read full
ATF Bank JSC has successfully paid off its euro bonds worth $310,5 million, with keeping high liquidity
February 20, 2014, ATF Bank JSC successfully paid off the 6th euro bond issue at the total amount of $310,5 million, including $296,8 million of the principal and $13,7 million as coupon payment (57,4 billion tenge in total).
21 2014 | Viewed: 568 | Press Releases | Read full
To show: Local World All
Popular themes