Kazakhstan may allow pension funds to invest more abroad

/IRBIS, Feb 21, 01/ - REUTERS informs, with the reference to the chairman of the National Bank, Grigorii Marchenko, that the National Securities Commission of Kazakhstan will be forced to increase the proportion of pension assets that can be invested into foreign corporate securities, unless the government offers shares of Kazakhstani "blue chips". Our position is as follows: if the privatization will not continue, then the National Commission should let the pension assets management companies (PAMC) to invest more abroad, he said. Marchenko is also a member of the National Securities Commission, and he said that the decision will be made on the next meeting of the Board of directors. The proportion of the assets that the PAMC can invest into foreign corporate securities (shares, bonds of the issuers holding at least AA ratings) is expected to be raised up to 15 or 20% from current 10%. As Marchenko says the pension reform, which started in 1998, was tied to the launching of domestic stock market, though state blocks of major Kazakhstani companies have not appeared there. The NSC has not planned to allow to invest pension assets into corporate securities of foreign issuers, though later it has changed its mind and allowed to invest 5% of the assets abroad, and increased this figure later to 10%. As of early February the assets of Kazakhstani pension funds were over $800 mln and they have become a major source of financing on the government bonds market, and Kazakhstani corporate bonds, though there is still a lack of instruments. The head of the National Bank assumes that small blocks of major Kazakhstani companies will be offered on the stock market this year especially for the PAMC, and it may become the grounds for the increase in the proportion of pension assets that can be invested into corporate bonds of Kazakhstani issuers up to 50% from current 40%. However, he did not specify the shares of which companies would be offered this year. The head of the NSC, Azamat Djoldasbekov suggested the country's president to sell up to 20% of shares of national companies, such as Kazatomprom and KazTransOil, is said. The country's president has approved this idea, he added. Marchenko said that if this takes place or the results become clear, then the volume of allowed investments into corporate bonds of Kazakhstani issuers holding A listing at the Kazakhstan Stock Exchange could be increased from 40% to 50%.