April 11, 2018 / 10:24 AM / 2 months ago

No impact on Kazakh sovereign fund from new Russia sanctions - exec

SHANGHAI, April 11 (Reuters) - A senior executive at Kazakhstan’s sovereign wealth fund Samruk-Kazyna said on Wednesday that there has been no impact on its portfolio companies from fresh U.S. sanctions on Russia, though a drop in the rouble has roiled the central Asian country’s foreign exchange market.

The Kazakh tenge has fallen more than 3 percent so far this week in reaction to the rouble’s drop following the new U.S. sanctions, which some fear could indirectly hurt Kazakh companies that do business with Russia.

When asked if the sanctions had had any effect yet on the fund’s companies, which include some of the Kazakh government’s corporate crown jewels, Baljeet Grewal, managing director for strategic development at Samruk-Kazyna, said no.

“We are now on a steep growth trajectory and if you look at our trading partners they are quite diversified,” Grewal told Reuters on a visit to Shanghai to introduce the $70 billion fund’s companies to potential investors.

Kazakhstan’s economy would grow by 4.5 percent to 4.8 percent per year over the coming five years, she said.

Growth in sectors linked to China’s “Belt and Road Initiative”, like transportation, logistics and infrastructure, would outpace GDP growth, she said.

Unveiled in 2013, China’s Belt and Road project, also known as ‘One Belt One Road’, is aimed at connecting China by land and sea to Southeast Asia, Pakistan and Central Asia, and beyond to the Middle East, Europe and Africa. China is expected to pour billions of dollars into Belt and Road projects.

“Central to our investment proposition is the ‘One Belt One Road’,” Grewal said.

“Kazakhstan is strategically located and is actually very critical to the success of the ‘One Belt One Road’ for China... It is now becoming a very important transit, logistics, warehousing hub for a lot of goods.”

Oil-rich Kazakhstan, hard hit by the global fall in commodity prices, has embarked on an ambitious privatisation drive to sharply cut the state’s role in the economy by 2021.

To raise money it plans to sell off hundreds of companies held by Samruk-Kazyna in whole or in part, ranging from the very small to behemoths such as energy producer KazMunayGaz (KMG) and flagship carrier Air Astana.

“Commodity prices have already started to rebound. We are seeing a lot of interest into Kazakhstan and Central Asia as a whole, especially from markets like China, Asia, Singapore, and so on,” she said.

In China, Samruk-Kazyna had signed “a couple of MOUs on this trip”, but Grewal declined to provide details. (Reporting by John Ruwitch; Editing by Kim Coghill)

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