The attractiveness of the Kazakhstan market

Transcription

1 The attractiveness of the Kazakhstan market

2 Kazakhstan: 9th largest country in the world World s 9 th largest country A territory bigger than Western Europe Bordering on China and Russia 2

3 Looking back: how the country has changed since independence Since 1991: marketoriented economic reforms, price and trade liberalization, investorfriendly tax and legal environment Ambitious privatization program: cash sales, voucher schemes and asset sales 1998: pension reform resulting in a wellcapitalized private pension funds system 2000: first former Soviet republic to fully repay the IMF (7 years ahead of schedule) 2002: first country in the CIS to receive an investment grade credit rating Wave of international IPOs from 2005, driven by the mining sector and listings in UK 3

4 Snapshot on Kazakhstan Strategically positioned with stable socialpolitical environment 2.7m sq. km, the world s 9th largest country Politically stable Good relationships with China, Russia, EU and the US Successful macroeconomic policies most reformed economy in CIS S&P rating BBB, Moody s Baa2 High GDP growth rate; growing middle class Well established Chilean style private pension sector Developed banking sector, fully convertible currency Liberal taxation regime No restrictions on foreign investors Human capital Virtually 100% literacy rate Ethnically diverse with Kazakh (63%), Russian (24%), others (13%) 4

5 Real GDP: US$ bn, constant CAGR 9% CAGR +7% 5

6 Inflation (CPI) 50% hyperinflation 1 40% 0 30% 0 20% 0 10% 0 0%

7 Exchange rate KZT / EUR KZT / USD

8 Real Effective Exchange Rate Index 2000 =

9 Trade and current account balance % of GDP Current account Trade 25% 20% 15% 10% 5% 0% 5% 10% 15% 20% 25%

10 Public deficit, public debt % of GDP Public deficit Public debt 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 2% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 2%

11 Consumer spending US$bn

12 Unemployment 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0%

13 Kazakhstan: successful adaptation to the financial crisis Quick reaction to worsening market conditions from the end of 2008 Successful debt restructuring at 3 of the 4 lenders that defaulted in 2009 Gradual decrease of Non Performing Loans since 2009 Strong position to face the global financial crisis Robust GDP growth (+7.1% yoy in H1 2011) Significant cash reserves (US$70bn foreign reserves) Limited budget deficit: 2.5% in 2012 and 1.5% in 2013 Low government debt Ongoing reforms and policy trends Sustained focus on production of energy and mineral products Economic diversification through investments in infrastructure and training and promotion of agricultural production Financial stability and improvement of the banking sector s regulation Managed float of Tenge since 2011 with control of the currency appreciation 13

14 Kazakhstan: a special case among Central Asian countries 27 Population (2010, in millions) Nominal GDP per capita (2010, in USD) Uzbekistan Kazakhstan Tajikistan Kyrgyzstan Turkmenistan Nominal GDP (2010, in billions) Kazakhstan Turkmenistan Uzbekistan Kyrgyzstan Tajikistan CAGR Real GDP 8% 7% 7% 4% 8% 6 5 Kazakhstan Uzbekistan Turkmenistan Tajikistan Kyrgyzstan 14

15 Kazakhstan peer group comparison (BBB to BBB+ rated countries) One of the most attractive countries compared to peers 14% 12% Hungary Kazakhstan Net FDI (% of GDP) 10% 8% 6% 4% Russia Bahrain Thailand Brazil 2% Mexico India Portugal South Africa (2.5%) 0% 2.5% 5.0% 7.5% 10.0% Real GDP growth (%) Net FDI (% of GDP) for the full year 2010 Real GDP growth compounded annual growth rate

16 Most elements from the Periodic Table H He Li Be B C N O F Ne Na Mg Al Si P S Cl Ar K Ca Sc Ti V Cr Mn Fe Co Ni Cu Zn Ga Ge As Se Br Kr Rb Sr Y Zr Nb Mo Tc Ru Rh Pd Ag Cd In Sn Sb Te I Xe Cs Ba La Hf Ta W Re Os Ir Pt Au Hg Ti Pb Bi Po At Rn Fr Ra Ac Unq Unp Unh Uns Uno Une Unn Ce Pr Nd Pm Sm Eu Gd Tb Dy Ho Er Tm Yb Lu Th Pa U Np Pu Am Cm Bk Cf Es Fm Md No Lr Present in Kazakhstan soil Most important for industrial use 16

17 Abundant natural resources Oil: 3% of world reserves (39.8 bn barrels), 1.8 mbpd in 2010 (2.1% of world oil production) Gas: 1% of world s reserves, and production of 33.6 bcm in 2010 (3.3% of world gas production) Uranium: world s #1 producer with production of 17.8 kt in 2010 (33% of world s production) Metals: (coal, iron ore, gold, copper, zinc and lead) second largest producer in the CIS after Russia Grain: 5.8% of global exports in 2009/10 (world #7) Oil Gas Uranium Gold Bauxite Copper 17

18 A major oil producer #9 proven reserves (3%) Bn barrels 262 Proven reserves TOP 15 countries #8 reserves to prod. (62 years) Saudi Arabia Iran Iraq Kuwait Venezuela United Arab Emirates TOP 15 countries represent 92% of world reserves > 100 years Russia Libya Kazakhstan Nigeria Canada Qatar USA China Brazil Reserves to production Kuwait Iraq Venezuela United Arab Emirates Iran Libya Saudi Arabia Kazakhstan Qatar Nigeria Gabon Sudan Ecuador Vietnam India R/P Number of years to produce known reserves at current production rates 18

19 At par with the largest natural resources producers OIL NATURAL GAS Kazakhstan Production (mbl/day) Reserves (bbl) Production (bn cum) Reserves (bn cum) Australia Canada th th 6th 9th 28th 11th (1) th 21th 4th 14th 11th 19th (1) Excluding Canadian Oil Sands URANIUM ZINC Production (kt) Reserves (kt) Production (kt) Reserves (mt) st 3rd 2nd 2nd 1st 3rd 7th 3rd 5st 4th 3rd 8th IRON ORE COAL Production (mt) Reserves (bn t) Production (mt) Reserves (bn t) th nd 9th 6th 2nd 9th th th 13th 8th 4th 12th 19

20 A strategic location to control O&G flows thanks to strong infrastructure RUSSIAN FEDERATION AtyrauSamara 15 m t / year Central Asia Center 820 m cum / day AtyrauSamara 15 m t / year BukharaUral 400 m cum / day OrenburgNovopskov 170 m cum / day Caspian Pipeline Consortium 35 m t / year CASPIAN SEA UZBEKISTAN AtasuAlashankou 10 m t / year Railroad Oil pipeline Gas pipeline TURKMENISTAN BGR TBA 36 m cum / day KYRGYZSTAN CHINA 20

21 Growing importance of Asia as a commercial partner Export by country 2000 Rest of the World 41% Rest of Asia 4% China 8% EU27 26% Rest of the World 49% Rest of Asia 4% China 10% EU27 23% Rest of the World 45% Rest of Asia 3% China 17% EU27 28% Russia 21% Russia 14% Russia 7% Import by country 2000 Rest of the World 24% Rest of Asia 6% China 3% EU27 18% Rest of the World 29% Rest of Asia 7% China 6% EU27 21% Rest of the World 43% Rest of Asia 3% China 19% EU27 13% Russia 49% Russia 37% Russia 22% 21

22 Regional positioning: between China and Russia % of total Import % of total Export China Russia 60% 50% 30% 25% 40% 20% 30% 15% 20% 10% 10% 5% 0% 0%

23 China/Asia, gaining importance as commercial partner Clear acceleration of commercial exchanges between Kazakhstan and China over the last decade Strengthening of relationships China expected to continue investments in the energy or metals & mining sector while diversifying in nonextractive industries Strong potential for further increase of investment flows with China Willingness to diversify Kazakhstan s export routes Development of gas transport routes 2010/2011: signing of several agreements between Kazakhstan and China including renewable energy, gas pipeline, civil nuclear projects 23

24 Kazakhstan s stock market: significant catchup potential Domestic market capitalisation over GDP (%) Thailand China Russia Indonesia 87,1% 68,5% 2.8x 2.2x 2.5x 1.8x 64,2% 51,0% 31,1% 31,3% 25,9% 28,5% Kazakhstan 28,8% 2010 Soon

25 Top 20 Kazakh companies by market capitalization in $m Market Cap. Sector KAZE LSE AIM Eurasian Natural resources Corp Metals & Mining KazMunaiGas EP Energy Kazakhmys Metals & Mining Halyk Savings Bank Financials Kazkommertsbank Financials Kazakhtelecom Telecom ATFBank Financials Mangistau Electricity Distribution Network Energy Mangistaumunaigaz 807 Energy Zhaikmunai 667 Energy Nurbank 575 Financials SAT & Company 564 Metals & Mining Kaspi Bank 459 Financials Bank Centercredit 389 Financials UstKamenogorsk Poultry Plant 362 Consumer goods Max Petroleum 196 Energy Kant 183 Consumer goods Polyus Gold International (1) 184 Metals & Mining KMK Munai 173 Chemicals Temirbank 151 Financials (1) Merged with KazakhGold in

26 Concluding remarks: what next? Potential for further GDP growth Clear opportunities for institutional investors Asia consolidates its position as prime market for Kazakhstan Continuation of privatization programs: People s IPO Equity raising on domestic and international stock markets 26

27 "Over the past 12 months the Government of Kazakhstan implemented a number of measures on the ease of doing business. These results showed the Government's commitment to improving business environment, including business registration, building permits, investor protection. But the most impressive is that Kazakhstan has managed to conduct such reforms during the economic crisis. World Bank Regional Director for Central Asia Motu Konishi, November 10 THANK YOU FOR YOUR ATTENTION 27