You can never have too much of a good thing. That's the clear message from the international bond markets, where investors have been gobbling up the spate of recent Eurobond issues from Kazakhstan's leading banks, secure in the knowledge that there continues to be plenty of good news from the former Soviet Union's star economy. In recent years, Kazakhstan has proved a profitable safe haven from choppy market conditions in other emerging markets.
Investors' faith in the improving Kazakhstan credit story received a timely endorsement at the end of May with the announcement by Standard & Poor's that it had raised its long-term foreign currency ratings for the Republic of Kazakhstan to BB+ from BB, and its local currency ratings to BBB-/A-3 from BB+. According to S&P the upgrade was prompted by the sustained strengthening of the republic's economic prospects, as well as prudent policies keeping the government's deficit and debt at low levels.
"Public sector net external assets are expected to reach about 28.4% of current account receipts in 2003, on the back of continued economic growth and the resource-based tax revenues that follow," says S&P credit analyst Luc Marchand. "Moreover, fiscal prudence is underpinned by the accumulation of oil and tax windfalls in a national fund, which will smooth the impact of oil price volatility."