The Ministry of Finance of the Republic of Kazakhstan, AIX and Euroclear Bank have signed a Memorandum to cooperate in the development of a new ‘international link’ for Kazakhstan. The Memorandum signifies an intention to work in partnership to support the creation of a market environment to enable Kazakhstani domestic securities to become Euroclearable.
The Minister of Finance of the Republic of Kazakhstan, Bakhyt Sultanov emphasized that «Once the foreign residents will have a direct access to sovereign securities market through Euroclear, the Ministry of Finance of the Republic of Kazakhstan, as the issuer of sovereign securities, will receive the opportunity to place sovereign securities with more competitive terms that in turn will potentially allow to reduce the cost of borrowing and diversify the investors’ base».
Stephan Pouyat, Global Head of Capital Markets, Funds and ETF Services, Euroclear commented: “Euroclear is extremely pleased to collaborate with the Ministry of Finance of the Republic of Kazakhstan and the local market infrastructure to assist in the creation of a capital market which can benefit from Euroclearability. Becoming Euroclearable allows a market to sustain a single, powerful pool of liquidity, resulting in strong macro-economic benefits including a reduction in bond yields and an increase in the local liquidity of assets, which in turn creates a deeper, stable and larger domestic market.”
In the whole Kazakhstani Issuers will be able to issue their domestic market securities directly, simply and efficiently through the Euroclear platform, an AA+ rated International Central Securities Depository, whose clients include more than 2,000 financial institutions in more than 90 countries.
«Through Euroclear Kazakhstani issuers would have access to both domestic and international investors on the same platform at AIFC. Borrowing costs for issuers are therefore expected to fall over time, thereby contributing to the development of the economy of Kazakhstan», – Nurlan Kussainov, CEO of Astana International Financial Centre Authority noted.
Participation of Euroclear – one of the leading trusted providers of post-trade services in the world – in the development of the capital market of Kazakhstan will contribute to efficiency and stability on the financial market of Kazakhstan.
AIFC. In December 2015 President of the Republic of Kazakhstan Nursultan Nazarbayev signed the Constitutional law “On the Astana International Financial Centre” (AIFC). The aim of the AIFC is to form a leading international centre of financial services. For the first time in post-Soviet region Common law framework will be introduced in the AIFC. English shall be the official language of the AIFC.
The objectives of the AIFC are to attract investment into the economy through the establishment of an attractive environment for investment in the financial services, to develop local capital markets, to ensure their integration with the international capital market, and to develop markets for insurance and banking services and for Islamic financing in the Republic of Kazakhstan. www.aifc.kz
Euroclear Bank provides settlement and related securities services for cross-border transactions involving domestic and international bonds, equities, derivatives and investment funds. Serving major financial institutions located in more than 90 countries, Euroclear Bank, based in Brussels, is part of the Euroclear group. Euroclear Bank is rated AA+ by Fitch Ratings and AA by Standard & Poor’s.
As well as Euroclear Bank, the Euroclear group includes Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & Ireland. The Euroclear group settled the equivalent of EUR 655 trillion in securities transactions in 2016, representing 196 million domestic and cross-border transactions. In the first half of 2017, the group held EUR 28 trillion in assets for clients.
For more information about Euroclear, please visit www.euroclear.com.