Kazakhstan is one of the most promising countries in the CIS even amid rising geopolitical tensions. Unlike some of its neighbors, the country has managed to establish peaceful and amicable international relations with all global power centers, including China, the U.S. and the EU. This neutrality can boost the development of Kazakhstan’s economy and capital markets further. Over the period from January to August, Kazakhstan's GDP increased by 3.1% on a year-on-year basis, according to the Minister of National Economy. The World Bank offers a similar analysis in terms of GDP growth. For comparison, the Russian GDP fell 1.1% over the same period. In Uzbekistan and Kyrgyzstan, the GDP increased by 5.4% (January-June) and 8% (January-August), respectively, thanks to a start from a lower base. However, in Uzbekistan, the GDP growth slowed down compared to last year.
At the same time, Kazakhstan still ranks first in terms of foreign direct investments (FDI). In 2020, this rate reached 4.2% of GDP in Kazakhstan, 2.9% in Uzbekistan, 0.6% in Russia and minus 5.2% in Kyrgyzstan. Over the period from 2011 to 2020, the FDI rate was 4.7% for Kazakhstan on average, second only to Kyrgyzstan (5.4%). Moreover, Kazakhstan's sovereign credit rating reached the investment grade. In terms of debt investments, the ratings of Kazakhstan and Russia were comparable even before the conflict in eastern Europe, while those of Uzbekistan and Kyrgyzstan were four to six grades below. Given that the sovereign rating affects all other ratings of local companies, this factor significantly affects the borrowing opportunities in foreign markets.
Stock Exchanges Development And Modernization
In 2018, Kazakhstan established the Astana International Financial Center (AIFC), the regional hub for investment and stock market development and legal center with a fair and impartial judicial system. That same year, AIFC successfully finished the IPO of Kazatomprom, its first project as a financial hub. Since then, the AIFC has attracted $6.2 billion in direct and portfolio investments, with $4 billion raised in 2021 alone, according to the AIFC 2021 Annual Report. In 2021, the number of companies registered at AIFC reached 1,173. To compare, the Dubai IFC reports 3,644 participants, Qatar IFC 1,284 and Singapore IFC 3,500.