The international rating agency, Fitch Ratings, has recently upgraded the long-term issuer default rating (IDR) of Qazaqstan Investment Corporation (QIC) in both foreign and national currencies, raising it from BB+ to BBB-. Furthermore, Fitch has assigned a "stable" prognosis to this rating.
This rating enhancement can be attributed to several key factors. Foremost among these is the increasing support that QIC has garnered from the state, coupled with its role as a unified investment institution significantly contributing to the growth of the alternative asset class market in Kazakhstan. This role, which entails consistent collaboration with state entities responsible for economic development, finance, and international cooperation, has led to the revision of the "Status, Ownership, and Control" factor from "Strong" to "Very Strong." Additionally, Fitch considered the consolidation of several other subsidiaries of Baiterek Holding within QIC.
According to Fitch's assessment, the state's commitment and capacity to support QIC remain exceptionally high. To facilitate state investment programs, the government has injected funds into QIC's share capital, which surged by 69% between 2021 and 2023, reaching 147.8 billion tenge by the first half of 2023. Concurrently, QIC's equity stood at 223.5 billion tenge, reflecting a 58% increase over the same period. The government has also provided long-term debt financing for various projects, including those in agriculture and social infrastructure development.
Nevertheless, Fitch analysts underscore the significant social and political ramifications that could arise in the event of a QIC default. Such an occurrence could temporarily jeopardize the implementation of state investment programs and the extensive efforts made by the state over the past decade to bolster direct investments infrastructure in Kazakhstan. QIC's funding spans critical sectors, from renewable energy to the food industry, infrastructure, and natural resources, all of which hold substantial importance in the nation's broader objective of diversifying its economy.
Fitch also emphasizes the pivotal role played by Baiterek Holding, the sole shareholder of QIC, in supporting and overseeing the corporation's activities. QIC's functions align closely with those of the state, reinforcing Fitch's expectations of potential government involvement and financial support to avert any organizational default.
It's noteworthy that QIC's national rating, assessed by Fitch's criteria, has also been elevated from "AA(kaz)" to "AA+(kaz)."
Reference: JSC Qazaqstan Investment Corporation is a fund of funds for direct investments established in 2007. Its goal is to foster private equity infrastructure in Kazakhstan to contribute to the nation's sustainable economic development. For more information, please visit their website at https://qic.kz/en.