London Daily

Focus on the big picture.
Friday, Oct 24, 2025

For Kazakhstan, Almost Everything Riding On Promise Of New Finance Center

By Kenneth Rapoza
After latest financial conference, hopes high for the Astana International Finance Center to take the lead in Kazakhstan.

Kassym-Jomart Tokayev is the new president of Kazakhstan, and the country’s signature financial event, Astana Finance Days (AFD), is supposed to highlight this man’s vision of making this place a freer market than it was even a year ago.

Last year, the four-day AFD brought in 4,500 attendees for the Astana International Financial Center’s (AIFC) opening salvo into the financial events market place. It was their first year running one and the last year in power for Soviet-era leader Nursultan Nazarbayev.

This year, Tokayev’s first few months in power, some 3,500 people attended from 65 countries. They opened new offices. But the real showcase for 2019 was that the AIFC, located in the buildings surrounded what looks like the futuristic Spaceship Earth at Disney’s Epcot, was their new English law court. This is what will govern securities transactions and corporate law at the AIFC. The Chief Justice of the AIFC Court is a retired British judge and a British lord, Harry Kenneth Woolf. The Chair of the Arbitration Court is another Brit, Barbara Dohmann. The turnout was smaller because of that particular focus, event planners said.

The AIFC is now officially a city within a city; a city of just over a million inhabitants that, as of last year, was renamed as an ode to Nazarbayev. It’s now called Nur-Sultan, even though the AIFC keeps the old city’s name.

The AIFC may be Nazarbayev’s brainchild. But it is the nervous system of a new Kazakhstan, trying to become the leader in a region of the world known from a market perspective as having lots of open space and raw materials, but very little else.

For Kazakhstan to modernize and become an integral business and financial partner for companies doing business along China’s new Belt and Road Initiative, the AIFC has to be in demand and serve a purpose. For now, it looks out of this world, maybe like a planet still in formation.

It’s roughly 9-month-old Astana International Exchange has to have more than a handful of thinly traded equity listed there. It also needs to figure out how it will tie in with the already existing Kazakhstan Stock Exchange in Almaty, best known by its acronym KASE.

If Kazakhstan is to be a serious powerhouse in Central Asia, at the crossroads of China and the West, then AIFC has to be a success. Almost everything is riding on it.


Nurlan Kussainov, the CEO of Astana International Financial Centre Administration, and Alexander Kamalov, the Chairman of Sberbank Kazakhstan at a ribbon-cutting ceremony for a new Sberbank branch in the futuristic AIFC offices



“If the AIFC wants to grow its new securities exchange, they will need to attract more items to list,” says Zachary Witlin, the resident expert on Central Asian economies for the Eurasia Group in Washington. “The AIFC is making bold promises but I don’t think the privatizations by themselves will be enough to make it a success. I’m not dismissing the Astana International Exchange entirely, I’m just waiting to be convinced that it has a strong financial case to make.”

For now, the Chinese companies, in particular, have been perfectly happy to work through banks or other local partners directly instead of issuing credit or equity on the AIX.

Last year, the country’s state-owned uranium miner, Kazatomprom, listed some of its shares on the AIX and in London. Russian mining company Polymetal did the same this year, listing on the LSE and the AIX. AIFC says they are working on more cross-listings like this.

Everyone from corporate investment banks to fund managers in emerging and frontier markets is waiting to see what happens with the planned privatization of KazMunayGas, the state-run oil and natural gas giant.

“The Kazakh government has to make good on their privatization program. They’ve announced this for years and the market is waiting for it,” says Christophe Charlier, chairman for Renaissance Capital, an emerging and frontier markets investment bank specialist with main offices in London and Moscow.

Charlier was one of the speakers at the event, and RenCap became a registered member of the Astana International Exchange as a broker/dealer. So far they have no plans on renting space within the AIFC.

“The thing about the new exchange in the AIFC is that they are really competing with Moscow, where there is a lot more liquidity. And London,” says Charlier. “So the big companies need to be convinced for listing there.”

The exchange is not without backers.


Their partners include Nasdaq—mostly on the tech side—and Goldman Sachs, the biggest U.S. investor in the AIFC, where the new exchange sits. Citi is the only U.S. bank with an operating license in Kazakhstan, and one of its largest foreign investors.

“There is, of course, competition to attract investor interest, but things like Astana Finance Days highlight the unique qualities of this platform and its advantages against other regional hot spots such as Singapore and Hong Kong, or Dubai and Moscow,” a spokesperson from the public affairs office of the AIFC said in a statement. In private, they will tell you that the AIFC and its Astana International Exchange cannot rely on privatization plans to grow.

Registering companies in the AIFC allows for specific tax waivers, including both corporate and individual income tax. Foreign companies work permit procedures are easier to set up there than outside of the Center.

On July 3, the third day of AFD, Spanish newswire EFE was the first to state how much was riding on the AIFC.

That puts a lot on the shoulders of AIFC governor Kairat Kelimbetov. He says the AIFC is targeting three markets to set up shop in the Center or list on the exchange. That includes the fledgling Eurasian Economic Market, Central Asia, and most important of all, the financial services related to China’s Belt and Road Initiative.

“In the past 12 months we have registered more than 200 companies, most notably the China Development Bank and the China Construction Bank, and we are looking forward to becoming the financial hub for the Belt and Road in Central Asia,” Kelimbetov was quoted as saying by EFE.



Approximately 5,000 guests from 50 countries attended the Astana International Financial Centre opening ceremony, including President of Kazakhstan Nursultan Nazarbayev, leaders of states, President of the European Bank for Reconstruction and Development Suma Chakrabarti, Chairman of the Board of Directors of JP Morgan Chase International Jacob Frenkel, President and Chairman of the Board of Sberbank of Russia Herman Gref, President of the Islamic Development Bank Group Bandar Al Hajjar, co-founder and the head of the Yandex group of companies Arkady Volozh and the head of the global bloc of governments and the public sector of an investment and corporate bank Citigroup Julie Monaco, and world-class Fintech and financial leaders and experts, investors and innovators including Prof. Barbara Meynert, Ari Honka, Eetu Kuneinen, Vincent Swift, to name a few.



They now have around 210 occupants.

Kelimbetov predicted that the next ten years would be key to the further development of the AIFC and of the entire Kazakh economy.

The chairman of the AIX Management Board, Timothy Bennett, a former CEO of the New Zealand Exchange said the Astana International Exchange was off to a slow start.

“It’s a three-to-five year journey. The country's privatization program at the moment is insufficient to build a new market place,” he told EFE.

Despite that slow start, the AIFC shot up ten spots to rank first in Eastern Europe and Central Asia on the Global Financial Centers Index, and 51st worldwide.

“Astana only officially launched its financial center in 2018,” wrote the Index’s authors from Long Finance, a London-based financial markets research firm. “It is unusual for such a new center to perform so strongly.”

From a distance, the AIFC looks like the best of Kazakhstan.

Economic activity is expected to have be lackluster in the second quarter following a deceleration in the first quarter, according to the emerging market big-picture analysts at Focus Economics.

In May, the short-term economic activity indicator weakened for a second consecutive month, amid a drop in industrial production that was brought upon by a slowdown in manufacturing and the sharpest slump in oil output since 2016 due to maintenance of three key oil fields. The industrial downturn, coupled with lower oil prices, is likely to have hurt exports in May, which had barely recovered in April.

As a result, growth is expected to decelerate this year. If domestic demand proves resilient, thanks to a planned fiscal stimulus program supporting consumption, loose credit and fixed-asset investment, then the economy should do well this year and next.

FocusEconomics analysts expect GDP to increase 3.5% in 2019 and again in 2020. By comparison, another frontier market, Vietnam, is seen growing at more than 6%. Vietnam has nearly five times Kazakhstan’s population despite its much smaller size.

Foreign direct investment has fallen by around 11% to come in at $5.9 billion in the first quarter, but is above historical averages of $4.3 billion, according to Trading Economics, using data from the country’s central bank.

Lastly, the new exchange will need to make an all-out effort convincing other neighbors in the ex-Soviet ’Stans to join in. But if China and Russia continue to do so, and if Kazakhstan makes good on its decade-old promise to privatize assets, the hope is that it will eventually have a domestic investor base that gives the AIFC, and its newest exchange, a better chance at survival.


* Article by By Kenneth Rapoza, Forbes.

Kenneth Rapoza, a Senior Forbes, WSJ, The Boston Globe, The Nation, Salon USA Today and Occasional BBC Contributor. Former holder of the FINRA.

Newsletter

Related Articles

0:00
0:00
Close
Microsoft AI CEO: ‘We’re making an AI that you can trust your kids to use’ — but can Microsoft rebuild its own trust before fixing the industry’s?
China and Russia Deploy Seductive Espionage Networks to Infiltrate U.S. Tech Sector
Apple’s ‘iPhone Air’ Collapses After One Month — Another Major Misstep for the Tech Giant
Graham Potter Begins New Chapter as Sweden Head Coach on Short-Term Deal
Ecuadorian President Daniel Noboa Alleges Poison Plot via Chocolate and Jam
Lakestar to Halt External Fundraising as Investor in Revolut and Spotify
U.S. Innovation Ranking Under Scrutiny as China Leads Output Outputs but Ranks 10th
Three Men Arrested in London on Suspicion of Spying for Russia
Porsche Reverses EV Strategy as New CEO Bets on Petrol and Hybrids
Singapore’s Prime Minister Warns of ‘Messy’ Transition to Post-American Global Order
Andreessen Horowitz Sets Sights on Ten-Billion-Dollar Fund for Tech Surge
US Administration Under President Donald Trump Reportedly Lifts Ban on Ukraine’s Use of Storm Shadow Missiles Against Russia
‘Frightening’ First Night in Prison for Sarkozy: Inmates Riot and Shout ‘Little Nicolas’
White House Announces No Imminent Summit Between Trump and Putin
US and Qatar Warn EU of Trade and Energy Risks from Tough Climate Regulation
Apple Challenges EU Digital Markets Act Crackdown in Landmark Court Battle
Nicolas Sarkozy begins five-year prison term at La Santé in Paris
Japan stocks surge to record as Sanae Takaichi becomes Prime Minister
This Is How the 'Heist of the Century' Was Carried Out at the Louvre in Seven Minutes: France Humiliated as Crown with 2,000 Diamonds Vanishes
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
U.S. Chamber Sues Trump Over $100,000 H-1B Visa Fee
Shenzhen Expo Spotlights China’s Quantum Step in Semiconductor Self-Reliance
China Accelerates to the Forefront in Global Nuclear Fusion Race
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
Australia’s Wedgetail Spies Aid NATO Response as Russian MiGs Breach Estonian Airspace
McGowan Urges Chalmers to Cut Spending Over Tax Hike to Close $20 Billion Budget Gap
Victoria Orders Review of Transgender Prison Placement Amid Safety Concerns for Female Inmates
U.S. Treasury Mobilises New $20 Billion Debt Facility to Stabilise Argentina
French Business Leaders Decry Budget as Macron’s Pro-Enterprise Promise Undermined
Trump Claims Modi Pledged India Would End Russian Oil Imports Amid U.S. Tariff Pressure
×