At the Astana Finance Days conference held in Nur-Sultan from July 1 to July 4, Astana International Exchange (AIX) presented a number of milestones in the development of its “Belt and Road Market” (BRM) – which is being developed to finance projects for the Belt and Road Initiative (BRI) in Kazakhstan and the region. The list of projects that BRM can support is broad and includes Kazakhstan’s “Nurly Zhol” new economic policy, China-Kazakhstan Capacity Cooperation, and projects related to connectivity or infrastructure development. Securities that can be listed and traded on BRM include bond, equity and ABS (asset-backed securities). These securities can be denominated in different currencies approved by AIX.
Tim Bennett, CEO of AIX, commented:
“This is an ambitious project for Astana International Exchange. AIX’s Belt and Road Market is the first public market to introduce the capital market financing mechanisms under the Belt and Road Initiative. The traded capital market is the most feasible solutions for private and public investors to participate in BRI projects complimenting bank loans – the main source of financing for BRI projects now.”
As part of developing the BRM, AIX has established partnerships with key market participants. Memorandum of Understandings (MoU) were signed on July 3rd with the following organizations:
- China Overseas Development Association (CODA), which is responsible for 55 China-Kazakhstan Capacity Cooperation projects worth around $27 billion, regarding financing the projects via capital market;
- China Chengxin International Credit Rating Co. – the largest credit rating agency in China, to provide credit rating service and co-develop AIX Belt and Road Bond market;
- Deheng Law Offices – one of the leading law firms in China which opened its branch in AIFC, to provide comprehensive legal service to AIX Belt and Road Bond and Equity market;
- PwC Kazakhstan (PricewaterhouseCoopers) – the leading professional services provider to various industries;
- CITIC Securities – the largest broker and investment bank in China.
The newly opened Astana Branch of China Construction Bank – the first fully authorized branch of a foreign bank in the AIFC – signed an MOU with AIX and CITIC Securities. The MoU introduces a broader scope of cooperation, including a potential RMB (Chinese Yuan) bond issuance on the BRM to finance local BRI and China-Kazakhstan Capacity Cooperation projects.
The BRI is a global initiative with over 70 countries participating in it. Kazakhstan plays an important role under the BRI as two out of six economic corridors pass through Kazakhstan. The BRI provides opportunities to all participating countries to develop their infrastructure, improve connectivity as well as manufacturing capacity and increase trade volume, thereby fostering their overall economic development.
Reference
AIX was created in 2017 within the AIFC development framework. AIX shareholders are: AIFC, Goldman Sachs, Shanghai Stock Exchange, Silk Road Fund and NASDAQ which provides AIX trading platform. Exchange operates within the regulatory environment familiar to international investors, in the English law jurisdiction. The Exchange has developed and fully operational trading infrastructure. An ecosystem of local and international brokers has been created. AIX successfully held IPO of NAC “Kazatomprom” JSC in November 2018. Polymetal international plc, large mining company, passed dual listing in April 2019. In addition, Eurobonds of the Ministry of Finance of the Republic of Kazakhstan and corporate bonds of “Kazakhstan Temir Zholy” JSC were placed on the AIX platform. www.aix.kz
AIFC. The AIFC was established on the initiative of the President of the Republic of Kazakhstan Nursultan Nazarbayev. In December 2015 President Nazarbayev approved the Constitutional Statute “On the Astana International Financial Centre” (AIFC). The aim of the AIFC is to establish a leading international centre for financial services. The objectives of the AIFC are to attract investment into the economy through the establishment of an attractive environment for investment in financial services, develop local capital markets, ensuring their integration with the international capital markets. www.aifc.kz
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