NUR-SULTAN – Kazakh President Kassym-Jomart Tokayev participated in the AIFC (Astana International Financial Center) management council meeting that reviewed the center’s work in 2020 and its budget for 2021, reports the AIFC press service. The meeting also discussed the AIFC Development Strategy through 2025.
Launched in 2018, in the Kazakh capital’s brand new futuristic district, the AIFC works in capital markets, financial technologies, Islamic finance, green finance, private banking and asset management. There are currently 845 companies hailing from 53 countries, including China, Kazakhstan, the United Kingdom and the United States.
During the meeting, AIFC Governor Kairat Kelimbetov reported on the successful implementation of the reforms with the assistance of the National Bank and the Agency for Regulation and Development of the Financial Market.
Kelimbetov said that this year’s costs were optimized. The budget application for 2021 was 11.8 billion tenge (US$27.6 million), 1.25 billion tenge (US$2.9 billion) less than in 2020. In 2022, it will taper to 9.9 billion tenge (US$23.2 million), and in 2023 to 9.1 billion tenge (US$21.3 million).
The volume of direct taxes paid by the AIFC participants for 2020 amounted to 6.3 billion tenge (US$14.7 million).
The center plans to attract up to 2,000 companies by 2025.
The volume of investments since the launch of the center in 2018 amounted to $4.4 billion, including $3.2 billion of direct investment.
Since November 2018, the Astana International Exchange (AIX) has attracted nearly $321 million of equity and $887 million of debt capital.
After the presentation, President Tokayev outlined several tasks for the development of the financial center.
He noted the importance of the privatization process on the AIX exchange. According to the privatization plan for 2021-2025, around 600 state assets are to be transferred into a competitive environment.
“For the development of the center, the IPO of a number of large companies, in particular, KazMunayGas and possibly KazTransGas, are especially important. IPO of large companies of Samruk-Kazyna national welfare fund is an absolute priority. I support the People’s IPO program with the maximum use of the potential of domestic stock exchanges,” said Tokayev.
He also approved a proposal to issue government securities on the AIX.
“This initiative should not simply move existing investors from one Kazakh platform to another. The added value should be created. The task of the center is to provide the most favorable conditions for the placement of government securities,” he added.
Tokayev also supported the initiative to provide AIFC participants an access to the country’s entire financial market. But the analysis and assessment of the risks to the stability of the financial system should be conducted.
“It is important to prevent the problems of competing regulatory regimes and the lack of a single regulator, a responsible government body. There must be no holes in the financial, fiscal, and currency legislation that could result in an uncontrolled outflow of capital from the country,” said Tokayev.
As the nation is on its path to recover from the COVID-19 crisis, all opportunities provided by the center should be used. This, according to Tokayev, requires the coordinated work between the AIFC, the National Bank, and the Agency for Financial Market Regulation and Development.
“Only joint efforts will allow us to achieve our objectives and tasks. They are very important for the further development of Kazakhstan,” he added, noting the importance of the AIFC as a leading financial hub of the Central Asian region.
The meeting coincided with the Astana Finance Days, one of the largest financial conferences in the region annually hosted by the AIFC, and taking place July 1-3 in a virtual format.
The three-day event comprises a series of forums on a wide range of topics, including FinTech, green finance, Islamic finance, among others, all with a goal to facilitate the post-crisis recovery.
It gathered main stakeholders and partners to present innovative products and services that will help the markets in its post-crisis recovery.