Extractive Sector: Time for Action
Favourable price situation has prompted many governments to try to increase their shares in profits through changing mining legislation, tax regimes and contracts. Recent regulatory changes both in developed and developing countries point to the fact that historic regulations were perhaps too generous towards foreign investors. Kazakhstan where, according to UNCTAD, multinationals’ share in the metal mining sector was about 63% (in 2006) and in the oil and gas industry about 50% (in 2005) is no exception in this regard.

Oil Chronicles. Wind of Change
Despite high world oil prices, Kazakhstan only slightly increased its output of hydrocarbons in 2007. For example, the country increased oil output by 2.2%, natural gas production by 10.8% and gas condensate output by 11.6% in 2007.

PetroKazakhstan: Striving for Leadership through Harmony
Mr. Bo Qiliang, President and Chief Executive Officer of PetroKazakhstan, answers the questions of Kazakhstan international magazine.

The Market of Petroleum Products. How much is petrol for the people?
Despite a stable growth in oil output, Kazakhstan has been regularly facing problems with domestic supplies of petroleum products, and, as a result, a constant hike in their prices. However, neither the government nor companies operating in the country are rushing to invest funds in oil refineries. In the current situation the game is not worth the candle: VAT, excise on petrol and problems with exporting domestically-produced fuel and lubricants make oil refining projects loss-making.

Kazakhstan’s Agricultural Sector. Grain Ties
The year 2007 was unfavourable for a number of the world’s major grain producers. The situation was the reverse in Kazakhstan: the country reaped a record harvest of 20.1 million tonnes of grain at an average yield of 1,470 kg per ha. Inspired by such an achievement, Prime Minister Karim Masimov even said that “agriculture, and in particular grain production, is becoming a new locomotive of Kazakhstan’s development”.

Food Market. Not by Bread Alone…
The continuing growth in food prices that started in summer 2007 has shown that Kazakhstan cannot guarantee enough food for itself. The prices of bread, vegetable oil, meat, dairy products and sugar that make up the basis of a standard food basket of Kazakhs went up all over the country. The government had to take administrative measures to stabilise food prices and saturate the domestic food market.

Kazakhstan's Ratings: Post-mortem
It is no secret that the downgrading of Kazakhstan’s sovereign and corporate ratings by the international rating agencies, Moody’s, Standard and Poor’s and Fitch Ratings, has significantly cooled down their relations with the Kazakh authorities and issuers. This fact gave a special edge to a conference that Fitch organised in Almaty in February 2008.

Financial Sector: Is There Light at the End of the Tunnel?
According to analysts, global markets have stepped into the second phase of the financial crisis caused by the U.S. subprime mortgage crisis. For Kazakh banks this means more than an appreciation in external funds. The very opportunity of borrowing abroad and refinancing earlier debts is now questionable. Analysts say that, in this situation, domestic banks can only rely on domestic funds, their own non-core assets and government support.

The Insurance Market: Results and Outlook
Even though new participants will appear in the insurance market in Kazakhstan during 2008, the rate of industry development is unlikely to achieve its previous level. The reason is that the major part of premiums received by insurance companies is directly connected with bank lending and according to bankers, a rapid growth in the industry is not expected in the near future. The 2007 results only reinforce that prediction.

Stock Market: RFCA sums up Results
Mr Kanapyanov, deputy chairman of the Agency of the Republic of Kazakhstan for the regulation of the Almaty Regional Financial Centre (RFCA), answers questions from our magazine.

The Mergers and Acquisitions Market: M&A Kazakh Style
The merger and acquisition processes have become more dynamic in Kazakhstan and have shown significant changes in terms of both quality and quantity over the past year. The trend is an important indication of the development of sectoral markets and is a reflection of the current processes.

Stock Indices: Fighting All Winds
Summarising the development of the Kazakh stock market in 2007, we note that despite all “fluctuations” the total volume of operations on the Kazakh Stock  (KASE), including the special trading floor of the Almaty Regional Financial Centre, grew by 90% to $322.5 billion, or by 85% to 39,505.6 billion tenge.