KAZAKHSTAN ECONOMIC NEWS IN BRIEF
Astana, March 11: Kazakhstan’s government plans to issue a sovereign Eurobond this year, after putting off a plan to raise $1 billion last year. The bond would be Astana’s first entry onto international markets for 13 years. Minister of Finance Bakhyt Sultanov said the bond will be issued this year, according to a Feb. 28 statement published on the financeministry’s website.
“This year, in order to reduce pressure on the liquidity ofthe domestic market, we plan to issue Eurobonds on foreign markets,” Sultanov announced at a cabinet meeting on Feb. 27. “This will be the first issue of Eurobonds in the last 13 years. It will form the benchmark for Kazakh companies attracting outside capital and will reduce the cost of borrowing.” Kazakhstan’s last sovereign Eurobond issue was in 2000, when the country raised $350 million. Those bonds were redeemed in 2007. Astana wants to limit credit growth in the economy, particularly unsecured retail lending, which could pose a risk to a banking sector recovering after being bailed out by the government in 2009. “In order to ensure economic security, we have worked out measures to monitor and regulate the process of debt management in the quasi-public sector,” Sultanov said. While the government has not been in international markets for many years, state-owned organisations have been raising funds recently. KazMunayGas borrowed $3 billion in a substantially over-subscribed two-part bond issued in April 2013, while agricultural holding KazAgro issued $1 billion worth of Eurobonds in May 2013. The Kazakhstan government had announced in May 2013 it was planning a $1 billion sovereign Eurobond. “We are going to the external markets not for money, but for credit, for loans, for benchmarks and in order to make ourselves present in this market,” then Finance Minister Bolat Zhamishev told a European Bank for Reconstruction and Development (EBRD) meeting in Istanbul.
On March 5, while discussing provisions of the agreement establishing the Eurasian Economic Union, the parties agreed on the need for gradual integration, First Deputy Prime Minister Bakytzhan Sagintayev stated at a briefing on the meeting of the Board of the Eurasian Economic Commission in Astana. “Today, we can say that in the key areas of the Eurasian Economic Union agreement we have a common understanding on the need for gradual integration processes based on mutually beneficial economic cooperation,” he said. He noted the meeting discussed in detail the functional part of the agreement, provisions on trade policy, tax policy, the financial sector, agribusiness and industrial policy. The board’s next meeting will be in Moscow in April.
Rehabilitation procedures aimed at financial recovery are being applied by 156 companies, saving 11,000 jobs, Chairman of the Tax Committee of the Ministry of Finance of Kazakhstan Anuar Zhumadildayev said at a March 3 media briefing. “In accordance with the decree of the government of Kazakhstan as of September 12, 2013, ‘On certain issues of the Ministry of Finance,’ the committee for dealing with bankrupt debtors was integrated into the Tax Committee. The functions on control over the bankruptcy process, including the functions on detection of deliberate and false bankruptcy, are performed with the use of the information systems of the tax administration,” he said. “Rehabilitation procedures aimed at financial recovery are underway at 156 companies. Debts totaling 5.5 billion tenge (US$30.2 million) were redeemed during the procedures. This is 86 percent of the total amount of debt. About 11,000 jobs were preserved,” Zhumadildayev said.
Chairman of the Tax Committee of the Ministry of Finance of Kazakhstan Anuar Zhumadildayev reported on the committee’s activities at a March 3 Central Communications Service briefing discussing the introduction of electronic services. “Over 2,000 taxpayers were registered online as individual entrepreneurs. About 440,000 patents were issued in electronic format last year. In total, about 16 million services, including 12 million or 73 percent of electronic services, were rendered last year,” he said. Zhumadildayev also said work to increase the number of electronic services and improve their quality would continue this year.