Kazakh National Fund’s assets rose by $1.3B – study
The assets of the National Fund of Kazakhstan at the end of September 2019 amounted to $59.34B, increasing by 2.3% compared with 2018 - $57.99B, Strategy2050.kz reports with reference to the study conducted by Finprom.kz.
In 2018, the assets of the National Fund to GDP amounted to 34%, exceeding the level of the minimum balance of 30% of GDP. In early August of this year, President of Kazakhstan Kassym-Jomart Tokayev signed a decree on pursuing a policy of diversifying the assets of the National Fund. It says that the strategic distribution of assets of the savings portfolio is aimed at continuing the policy of diversification of assets and involves a transition from a conservative distribution (80% in bonds, 20% in shares) to a balanced distribution (60% of bonds, 30% of shares, up to 5% of alternative instruments and up to 5% gold), aimed at increasing long-term expected returns.
In the second half of 2019, the National Bank began work on the transition to a new balanced distribution of assets in the savings portfolio, as a result of which in August and September of 2019 200475.43 and 199866.28 ounces of gold were purchased, respectively. Thus, according to the results of the third quarter, the market value of the gold portfolio amounted to 595.5 million US dollars, or 1.17% of the savings portfolio.
It is important to note that in 2019 a downtrend broke in the last four years, when the assets of the National Fund were declining. The main driver of the National Fund income growth for January – September of this year was the investment income from fund management, which amounted to about $2.3B in the 3rd quarter of 2019. At the same time, the amount of net withdrawals for the allocation of transfers from the National Fund amounted to 408.6 billion tenge. In general, despite a negative correction in the stock market in 2018, the yield of the National Fund since the beginning of 2017 (for less than 3 years) reached 9.02%, which is 3.19% in annual terms.
At an expanded meeting of the Government, the Chairman of the National Bank of Kazakhstan, Yerbolat Dossaev, said that in the field of fiscal policy in 2019-2020 the issue of increasing countercyclicality through the introduction of new budget rules and tightening the rules for using the funds of the National Fund would be worked out. This question is especially relevant, as it meets the purpose of preserving the Fund. So, over the past 5 incomplete years, the National Fund has received 10.2 trillion tenge, and 14.9 trillion tenge has been allocated to the republican budget in the form of guaranteed and targeted transfers.
