Fitch has confirmed Kazyna Capital Management JSC's rating at "BB+" with stable outlook

In December 2022, Fitch Ratings confirmed Kazyna Capital Management JSC's (KCM) long-term issuer default ratings ("IDR") in foreign and national currency at "BB+" with "stable" outlook. Fitch also confirmed KCM's rating on the national scale "AA (kaz)". Confirmation reflects Fitch's view of the importance of KCM's activities for Kazakhstan (BBB/Stable), given its role as a key government investment institution in the field of direct investment. Fitch analysts note that during the rating assignment procedure, they considered the Fund as an organization that was ultimately controlled by the state, just like other comparable second-tier companies related to the state, since KCM, within the framework of state mandates, promoted the development of investment infrastructure and contributed to economic diversification. According to Fitch, the level of ability and willingness of the State to provide support to KCM is very high. KCM is one of the operators of "Concept of Industrial and Innovative Development for 2021-2025". KCM approved a new capital investment in the amount of 35 billion KZT financed at the expense of Republican budget for 2023 through NMH "Baiterek" JSC. In addition, KCM received long–term debt financing in the amount of 12.8 billion KZT for projects in the field of agro-industrial complex within the framework of Employment Roadmap for 2020 - 2021. KCM's net interest income, consisting of bank deposits and invested assets, recovered by about 34% to 2.7 billion KZT (2020: 2.0 billion KZT), which was facilitated by improvement in the indicators of invested assets. Assets of KCM increased to KZT 214 billion in 2021 compared to KZT 194 billion in 2020, due to an increase in cash and cash equivalents to KZT 21.5 billion (in 2020: KZT 16.6 billion) and revaluation of assets. However, Fitch analysts highlight the strong socio-political consequences in the event of default of KCM, which may temporarily jeopardize the implementation of state programs, as well as measures taken by the state in the last 10 years to develop the infrastructure of direct investment in Kazakhstan. The Fund carries out projects from renewable energy to the food industry, infrastructure and natural resources. According to Fitch, these projects have high social and political significance for the State within the framework of the Concept of Industrial and Innovative Development of the Republic of Kazakhstan. Taking into account the politically sensitive factors, Fitch believes that the suspension of provision of services in the event of a default of KCM will have significant political consequences for the sovereign issuer itself.