Emerging Market Economist, Emerginomics

Tatiana Orlova

Emerging Market Economist

Emerginomics

Cross Asset Strategy

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President Tokayev and the government view maintaining political stability in the aftermath of the managed presidential succession as their primary goal. Instead of enhancing democratic freedoms, the new leadership concentrates on poverty reduction. This year's moderate relaxation of fiscal policy gave a fillip to GDP growth, which accelerated to 4.3% in the eight months to August.
However, there are signs that the accelerating household demand is fuelling an adverse trend in the current account. We expect further KZT depreciation in the coming months, especially if Brent continues to decline. This, in turn, could fuel inflationary pressures, which are already rising. The NBK's commitment to inflation targeting may face a new serious test in the coming month. 
Kazakhstan’s National Bank hiked its policy rate by 25bps in September. However, a single hike may be insufficient to counterbalance the inflationary effects of fiscal relaxation. Unfortunately, in addition to its conventional functions, the central bank is expected to participate in the government’s efforts to stimulate the economy, by extending mortgages and car loans to the population. This "double mandate" is an obstacle to proper inflation targeting. We believe that it increases the likelihood of a rise in KZT volatility in the coming months. 

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President Tokayev and the government view maintaining political stability in the aftermath of the managed presidential succession as their primary goal. Instead of enhancing democratic freedoms, the new leadership concentrates on poverty reduction. This year's moderate relaxation of fiscal policy gave a fillip to GDP growth, which accelerated to 4.3% in the eight months to August.
However, there are signs that the accelerating household demand is fuelling an adverse trend in the current account. We expect further KZT depreciation in the coming months, especially if Brent continues to decline. This, in turn, could fuel inflationary pressures, which are already rising. The NBK's commitment to inflation targeting may face a new serious test in the coming month. 
Kazakhstan’s National Bank hiked its policy rate by 25bps in September. However, a single hike may be insufficient to counterbalance the inflationary effects of fiscal relaxation. Unfortunately, in addition to its conventional functions, the central bank is expected to participate in the government’s efforts to stimulate the economy, by extending mortgages and car loans to the population. This "double mandate" is an obstacle to proper inflation targeting. We believe that it increases the likelihood of a rise in KZT volatility in the coming months. 



Kazakhstan: National Bank Needs More Independence to Keep KZT Volatility in Check

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When President of Kazakhstan Nursultan Nazarbayev resigned in March, we were concerned that political uncertainty might affect Kazakh assets. The snap presidential election due on Sunday 9 June should help allay investors' concerns. In the absence of real competition, we expect Nazarbayev’s nominee Kassym-Zhomart Tokayev to win. However, the substantial reduction in risks associated with presidential succession is unlikely to trigger an automatic upgrade of Kazakhstan’s sovereign ratings. In the last months of Nazarbayev's rule, we detected signs of increased pressure on the central bank to provide the economy with long money.  There are signs that President Tokayev is going to maintain the pressure on NBK, which we find worrying.
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When President of Kazakhstan Nursultan Nazarbayev resigned in March, we were concerned that political uncertainty might affect Kazakh assets. The snap presidential election due on Sunday 9 June should help allay investors' concerns. In the absence of real competition, we expect Nazarbayev’s nominee Kassym-Zhomart Tokayev to win. However, the substantial reduction in risks associated with presidential succession is unlikely to trigger an automatic upgrade of Kazakhstan’s sovereign ratings. In the last months of Nazarbayev's rule, we detected signs of increased pressure on the central bank to provide the economy with long money.  There are signs that President Tokayev is going to maintain the pressure on NBK, which we find worrying.


Kazakhstan Snap Presidential Election Should Ensure Smooth Presidential Succession

Materials Analyst/Strategist, Janus Analysis

Gaius King

Materials Analyst/Strategist

Accelerating Tomorrow’s Independent Research

Boost Research

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Equity Bottom-Up

<ul>
<li>Uranium Price has fallen 7% over the past two months</li>
<li>Actively looking for uranium short positions</li>
<li>Provide summarised watch list</li>
<li>Wisdom from Samuel Longhorne Clemens</li>
<li>
<a href="https://www.smartkarma.com/entities/27844" target="_blank" data-smartkarma-citation="entities:27844:1">Yellow Cake PLC (YCA LN)</a>, <a href="https://www.smartkarma.com/entities/17078" target="_blank" data-smartkarma-citation="entities:17078:1">Berkeley Energy (BKY AU)</a>, <a href="https://www.smartkarma.com/entities/25364" target="_blank" data-smartkarma-citation="entities:25364:1">Cameco Corp (CCO CN)</a>, <a href="https://www.smartkarma.com/entities/27734" target="_blank" data-smartkarma-citation="entities:27734:1">Kazatomprom Natsionalnaya At (KZAP KZ)</a>, <a href="https://www.smartkarma.com/entities/28004" target="_blank" data-smartkarma-citation="entities:28004:1">Jangada Mines PLC (JAN LN)</a>, <a href="https://www.smartkarma.com/entities/28005" target="_blank" data-smartkarma-citation="entities:28005:1">Europa Metals Ltd (EUZ LN)</a>, <a href="https://www.smartkarma.com/entities/10708" target="_blank" data-smartkarma-citation="entities:10708:1">Buxton Resources (BUX AU)</a>, <a href="https://www.smartkarma.com/entities/2564" target="_blank" data-smartkarma-citation="entities:2564:1">Musgrave Minerals (MGV AU)</a>, <a href="https://www.smartkarma.com/entities/18292" target="_blank" data-smartkarma-citation="entities:18292:1">Myanmar Metals (MYL AU)</a>, <a href="https://www.smartkarma.com/entities/13112" target="_blank" data-smartkarma-citation="entities:13112:1">Archer Exploration (AXE AU)</a>, <a href="https://www.smartkarma.com/entities/15927" target="_blank" data-smartkarma-citation="entities:15927:1">Canyon Resources (CAY AU)</a>, <a href="https://www.smartkarma.com/entities/4293" target="_blank" data-smartkarma-citation="entities:4293:1">Catalyst Metals (CYL AU)</a>, <a href="https://www.smartkarma.com/entities/14712" target="_blank" data-smartkarma-citation="entities:14712:1">Core Exploration (CXO AU)</a>, Exore Resources (ASX: ERX), <a href="https://www.smartkarma.com/entities/20213" target="_blank" data-smartkarma-citation="entities:20213:1">Stavely Minerals (SVY AU)</a>, <a href="https://www.smartkarma.com/entities/28006" target="_blank" data-smartkarma-citation="entities:28006:1">Tietto Minerals Ltd (TIE AU)</a>, <a href="https://www.smartkarma.com/entities/28007" target="_blank" data-smartkarma-citation="entities:28007:1">Horizonte Minerals PLC (HZM LN)</a>, Bellevue Gold (ASX: BGL), <a href="https://www.smartkarma.com/entities/14443" target="_blank" data-smartkarma-citation="entities:14443:1">Allegiance Coal (AHQ AU)</a>, First Au (ASX: FAU), <a href="https://www.smartkarma.com/entities/3189" target="_blank" data-smartkarma-citation="entities:3189:1">Base Resources (BSE AU)</a>, <a href="https://www.smartkarma.com/entities/19210" target="_blank" data-smartkarma-citation="entities:19210:1">Breaker Resources Nl (BRB AU)</a>  </li>
</ul>


Uranium Price has fallen 7% over the past two months
Actively looking for uranium short positions
Provide summarised watch list
Wisdom from Samuel Longhorne Clemens

Yellow Cake PLC (YCA LN), Berkeley Energy (BKY AU), Cameco Corp (CCO CN), Kazatomprom Natsionalnaya At (KZAP KZ), Jangada Mines PLC (JAN LN), Europa Metals Ltd (EUZ LN), Buxton Resources (BUX AU), Musgrave Minerals (MGV AU), Myanmar Metals (MYL AU), Archer Exploration (AXE AU), Canyon Resources (CAY AU), Catalyst Metals (CYL AU), Core Exploration (CXO AU), Exore Resources (ASX: ERX), Stavely Minerals (SVY AU), Tietto Minerals Ltd (TIE AU), Horizonte Minerals PLC (HZM LN), Bellevue Gold (ASX: BGL), Allegiance Coal (AHQ AU), First Au (ASX: FAU), Base Resources (BSE AU), Breaker Resources Nl (BRB AU)  


New J Hutton – Exploration Report (Weeks Ending 22/03/19)

Macroeconomics

<div class="content-highlight">
Among emerging market commodity exporters, Kazakhstan remains an example of a well-managed economy with stable growth and an improving business environment. The government sticks to a prudent fiscal policy allowing it to maintain low levels of debt. The recent switch to inflation targeting allows the economy to absorb external shocks via a weaker local currency FX rate. Despite the recent turbulence in the global markets, the government launched privatisation of large SOEs this month with a successful placement of shares in Kazatomprom, the world's largest uranium producer. The government also managed to place euro-denominated sovereign Eurobonds on attractive terms. 
</div>


Among emerging market commodity exporters, Kazakhstan remains an example of a well-managed economy with stable growth and an improving business environment. The government sticks to a prudent fiscal policy allowing it to maintain low levels of debt. The recent switch to inflation targeting allows the economy to absorb external shocks via a weaker local currency FX rate. Despite the recent turbulence in the global markets, the government launched privatisation of large SOEs this month with a successful placement of shares in Kazatomprom, the world's largest uranium producer. The government also managed to place euro-denominated sovereign Eurobonds on attractive terms. 


Kazakhstan Proves Its Credentials As a Safe Haven in Turbulent Times

Asia Long-Short PM/Analyst

Curtis Lehnert

Kazatomprom Natsionalnaya Atomnaya Kompaniya / Equity Bottom-Up

Kazatomprom Natsionalnaya Atomnaya Kompaniya

Kazakhstan, the 9th largest country by land mass in the world and largely forgotten about since 'Borat' hit theaters in 2006, is exploding back onto the world stage with a string of state-owned company privatizations starting with the national uranium company, Kazatomprom. I like! OK, enough Borat jokes.Kazakhstan is a fascinating place. It has a massive land area roughly the size of Argentina, yet with a population roughly equal to the five boroughs of New York City. It's an entirely landlocked country, yet has a navy based on the Caspian Sea. In the Kazakh language "qanağattandırılmağandıqtarıñızdan" is an actual word. It's one of the most ethnically diverse countries in the world due to its proximity to a large number of ethnic groups and the fact that Stalin deported various ethnic groups there during WWII. The society has traditionally been agrarian and nomadic with much of the culture revolving around horses. The traditional sport "kyz kuu", literally translated as “girl chasing” is basically a race between a man and woman, both on horseback, that either ends up with the man kissing the woman or the woman beating the man with a whip. Horse meat is a favorite food and the local drink, Kumis, oft referred to as "milk champagne" is just fermented horse milk.  You could tell me pretty much anything about Kazakhstan at this point and I'd probably believe it.Leaving it's oddities aside, Kazakhstan is loaded with natural resources. In fact, 74% of industrial production in the country comes from the mineral and natural resource output. For the rest of this insight, I will focus specifically on uranium, the element that Kazakhstan maintains leading production volumes of globally and <a href="https://www.smartkarma.com/entities/27734" target="_blank" data-smartkarma-citation="entities:27734:1">Kazatomprom Natsionalnaya At (KZAP KZ)</a>, the state-owned leader of uranium mining in Kazakhstan. Yakshemash. OK, last one seriously.Kazatomprom is issuing GDRs in London with intention to float 25% of the company. The roadshow is scheduled to start on October 31 with CS and JPM as the leads.In this insight I will cover:<ul>
<li>A brief overview of the uranium industry</li>
<li>Company fundamentals</li>
<li>Financial Information and Valuation Comparisons</li>
<li>No more Borat quotes</li>
</ul>

Kazakhstan, the 9th largest country by land mass in the world and largely forgotten about since 'Borat' hit theaters in 2006, is exploding back onto the world stage with a string of state-owned company privatizations starting with the national uranium company, Kazatomprom. I like! OK, enough Borat jokes.Kazakhstan is a fascinating place. It has a massive land area roughly the size of Argentina, yet with a population roughly equal to the five boroughs of New York City. It's an entirely landlocked country, yet has a navy based on the Caspian Sea. In the Kazakh language "qanağattandırılmağandıqtarıñızdan" is an actual word. It's one of the most ethnically diverse countries in the world due to its proximity to a large number of ethnic groups and the fact that Stalin deported various ethnic groups there during WWII. The society has traditionally been agrarian and nomadic with much of the culture revolving around horses. The traditional sport "kyz kuu", literally translated as “girl chasing” is basically a race between a man and woman, both on horseback, that either ends up with the man kissing the woman or the woman beating the man with a whip. Horse meat is a favorite food and the local drink, Kumis, oft referred to as "milk champagne" is just fermented horse milk.  You could tell me pretty much anything about Kazakhstan at this point and I'd probably believe it.Leaving it's oddities aside, Kazakhstan is loaded with natural resources. In fact, 74% of industrial production in the country comes from the mineral and natural resource output. For the rest of this insight, I will focus specifically on uranium, the element that Kazakhstan maintains leading production volumes of globally and Kazatomprom Natsionalnaya At (KZAP KZ), the state-owned leader of uranium mining in Kazakhstan. Yakshemash. OK, last one seriously.Kazatomprom is issuing GDRs in London with intention to float 25% of the company. The roadshow is scheduled to start on October 31 with CS and JPM as the leads.In this insight I will cover:
A brief overview of the uranium industry
Company fundamentals
Financial Information and Valuation Comparisons
No more Borat quotes


KazAtomProm IPO: Number One Uranium Miner in Kazakhstan...Great Success!

Kazakhstan

Kazatomprom Natsionalnaya Atomnaya Kompaniya AO provides uranium. The Company imports and exports uranium, rare metals, nuclear fuel for power plants, non-ferrous metallurgy, cycle output, and duel-purpose materials. Kazatomprom Natsionalnaya Atomnaya Kompaniya conducts its business in Republic of Kazakhstan.

Kazatomprom Natsionalnaya Atomnaya Kompaniya (KZAP KZ)

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Kazatomprom Natsionalnaya Atomnaya Kompaniya (KZAP KZ)

Kazakhstan: National Bank Needs More Independence to Keep KZT Volatility in Check

President Tokayev and the government view maintaining political stability in the aftermath of the managed presidential succession as their primary...

Tatiana Orlova

Kazakhstan Snap Presidential Election Should Ensure Smooth Presidential Succession

When President of Kazakhstan Nursultan Nazarbayev resigned in March, we were concerned that political uncertainty might affect Kazakh assets. The...

Tatiana Orlova

New J Hutton – Exploration Report (Weeks Ending 22/03/19)

Uranium Price has fallen 7% over the past two months Actively looking for uranium short positions Provide summarised watch list Wisdom from Samuel...

Boost Research

Kazakhstan Proves Its Credentials As a Safe Haven in Turbulent Times

Among emerging market commodity exporters, Kazakhstan remains an example of a well-managed economy with stable growth and an improving business...

Tatiana Orlova

KazAtomProm IPO: Number One Uranium Miner in Kazakhstan...Great Success!

Kazakhstan, the 9th largest country by land mass in the world and largely forgotten about since 'Borat' hit theaters in 2006, is exploding back...

Curtis Lehnert

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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