The first annual ACRA conference in Kazakhstan: What did the top managers of the largest corporations talk about?

On October 4, the annual conference of the Analytical Credit Rating Agency (ACRA) on the topic “Current Trends in the Economy and Financial Sector of Kazakhstan” was held for the first time in Nur-Sultan at the venue of the Astana International Financial Centre (AIFC).

It was attended by representatives of state institutions of Kazakhstan, top managers of large corporations and financial institutions.

The conference was opened by the AIFC Governor Kairat Kelimbetov.

For us, this historical event is doubly. Firstly, this is the first annual ACRA conference, which, hopefully, will become traditional. And, of course, it is very important for us that this largest Eurasian space rating agency has designated its presence in the AIFC”, – said Kairat Kelimbetov.

“Work at the AIFC is an extremely important area for ACRA. The level of expertise of our employees is comparable with the international agencies of the “Big Three”, and we are pleased to apply this knowledge here, in Kazakhstan, for the development of the rating industry. Moreover, I would like to emphasize that this will not be just a branch of a Russian agency. Our task is to build a rating and analytical platform, attracting local specialists for this. Representing ACRA in Kazakhstan will be Askar Elemesov, an extremely energetic person with an impeccable reputation and vast experience, and I am sure this will help him form a worthy team. We are very grateful that we have the opportunity to work on the AIFC platform, which is optimized for the growth and development of international business”, – said Igor Zelezetskii, ACRA CEO. Particular attention was paid to the AIFC platform.

“We perceive the AIFC as a promising platform for building a regional rating and analytical hub in the Eurasian space. Its enormous potential is evidenced by the very idea of creating the AIFC: its own system of financial institutions, an exchange, work based on the principles of Anglo-Saxon law, which is one of the most flexible forms of contract law. All these factors indicate that if the company is considering the possibility of development in Kazakhstan, then it is impossible to find a better platform than the AIFC”, – concluded Zelezetskii.

The conference continued with a discussion on sovereign ratings, which was attended by Vincent Truglia, member of the ACRA Board of Directors, Ilona Dmitrieva, head of the sovereign rating and macroeconomic analysis group at ACRA, and Askar Elemesov, head of the ACRA branch at AIFC. They discussed, in particular, the sovereign rating that ACRA assigned recently to Kazakhstan.

In his speech, Askar Elemesov dwelt on the development of a rating agency in Kazakhstan with the involvement of local specialists.

“ACRA is essentially creating a national rating agency in Kazakhstan. This is extremely important, since the presence of a strong local player who is able to provide the market with high-quality analytics will definitely benefit the financial infrastructure of the Republic and can positively affect the investment attractiveness of Kazakhstan and Kazakhstan companies”, – explained Elemesov.

Conference participants also discussed Islamic finance, the demand for which is growing worldwide, regardless of jurisdiction. The AIFC chief manager for Islamic finance and business Madina Tukulova and the director of the treasury department at Al Hilal Islamic Bank Adlet Aliyev participated in the discussion of approaches to evaluating Islamic finance instruments. Timur Iskandarov, head of the Islamic finance ratings group at ACRA, presented the Agency’s approach to rating sukuk Islamic bonds. Participants emphasized that sukuk as an investment tool maximally takes into account regional characteristics of the investor base and commercial use of invested funds.

Armen Dallakyan, the head of the financial institutions rating group at ACRA, Sabit Khakimzhanov, Director of the Financial Stability Department at the National Bank of the Republic of Kazakhstan, and Nurlan Ashimov, Managing Director of the Unified Accumulative Pension Fund JSC, spoke about the prospects of the financial sector of Kazakhstan. Noting the continuing trend towards the restoration of the banking system, the participants agreed that the external environment may create risks for the relatively stable operating environment, credit growth will require diversification of the economy, and the development of capital markets will improve the funding structure of banks.

The participants of the structured finance session underscored that the sector of small and medium-sized enterprises (SMEs) is one of the key drivers for any economy. Stefan Augustin, head of the structured finance instruments ratings group at ACRA, spoke about the prospects for SME debt portfolio securitization, and Arsen Mustafin, Director of the Loan programs at Entrepreneurship Development Fund Damu JSC, shared his expertise of direct investments in the pools of SME liabilities. Asel Dykanbaeva, Deputy Chairman of the Management Board of Kazakhstan Mortgage Company JSC, presented a brief overview of the mortgage market in Kazakhstan and suggested measures that could contribute to its growth, including formation of a specialized platform for SPVs as an alternative to stock exchanges, increasing the focus on the residential mortgage-backed securities (RMBS) in the investment portfolios of institutional investors, and elaboration of an appropriate methodology for the Kazakhstan market.

Larisa Loznova, head of the international practice of non-financial company ratings at ACRA, Vasilii Tanurkov, director of the corporate ratings group at ACRA discussed with Waina Leong, Director of Research and Knowledge Management Department at Samruk-Kazyna JSC, the current situation in the corporate sector of Kazakhstan and the importance of credit ratings in the context of the main sectors of its economy. One of the main risks for the economy of the republic, ACRA analysts see the likely significant decline in oil prices to $ 48-50 per barrel by 2021.

“I would like to thank the AIFC management and all conference attendees for the opportunity to share the expertise of ACRA and to hear the feedback from the regulators and business community of the Republic of Kazakhstan. Such events are important for the economic development of the Eurasian economic area, and we are determined to hold ACRA conferences in Kazakhstan annually”, – said Igor Zelezetskii.