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David Stafford
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Student of markets, enjoys following their course.
My book:
Around the World in Several Pieces
  • "Frontier" Economy Update; Kazakhstan And AZIA. 0 comments
    Jun 15, 2014 11:40 PM | about stocks: AZIA

    The fabled land of Borat, whose international athletes sometimes have the misfortune per se of having the Borat-related national anthem played at medals ceremonies at competitions, has released some new regulations for corporations per se in the country, presumably intent on expanding foreign investment in the country.

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    national anthem mixup; www.youtube.com/watch?v=ou3lW32EXL0

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    According to ye old Moscow Times, Kazkhstan has dropped taxes for foreign investors in regards to their investments into the countries economy per se. It seems there's a little bit of fine print however, namely in that this doesn't really affect energy investments, for presumably this is what they are trying to diversify their economy away from per se.

    story; www.themoscowtimes.com/business/article/...

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    Hence one may be wondering how one might invest in Kazakhstan. Well that's what I was wondering anyway, so without going through some sort of specialist private equity firm, or some government minister there per se, one might also look into, if one so desires, the "Global X Central Asia and Mongolia ETF"(NYSEARCA:AZIA).

    Morningstar; portfolios.morningstar.com/fund/holdings...

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    From what our good friends at Morningstar have deduced it seems as though AZIA is sort of like GUR, if one may recall, namely in that a lot of it is sort of "investment by proxy" per se, so there's a decent number of UK and Canada based companies in there, if one will. Apart from this there are also investments which are in the Kazakh energy space in there so that may be somewhat problematic per se, in so far as taking advantage of these new tax regulations is concerned. However, there may be some redemption for AZIA in this case in that its second largest holding at roughly ~9-10% is in a Kazakh bank, so presumably that might be positively affected by this whole new regulation scheme per se.

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    Apart from that, perhaps there are as always interesting observations to be made or gleemed, from a regional ETF like this. As might be presumed, some Mongolian investments in particular are sort of approached through Chinese firms(somewhat long-established established economic connections between Mongolia and China; for example Coal extraction/transport/somewhat recently refining, related industries).

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    Brief sidenote; Mongolia's "richest man" made his fortune through coal mining and other types of mining for example; investing.businessweek.com/research/stoc...

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    In addition to the Chinese connection per se, there seems to be a general trend whereby there is a significant presence of UK based energy sector companies, and Canada based mining companies in this ETF, aswell. There is also a Sweden based communications related firm; "TeliaSonera AB" thrown in there at ~4.5-5% portfolio weighting, for good measure presumably.

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    Apart from the varied nationalities represented per se by the holdings of this ETF, it seems to be quite uncorrelated in general, to the greater MSCI index, while bearing stronger correlation to "diversified emerging market" indices. It also yielded about .35$ in dividends over the past year(came into existence last year per se) so its yield if measured by today's price would be about 2.2-.26% presumably. It also doesn't have a tremendously large total assets figure, and so who knows how large transactions per se, may lead to price volatility per se(the off chance). It's about 62% institutionally owned as well so perhaps that remaining .38 or so could potentially be used to pivot it around if concentrated in a few hands per se, but who can say for sure.

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    Either way perhaps its not an everyday occurrence to see Kazakhstan in the news per se, so perhaps that's always welcome. Kazakhstani holdings or not, I hope everybody's portfolio is doing great, and thanks again for reading.

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    Kazakh flag;

    source; ak.picdn.net/shutterstock/videos/326257/...

    Stocks: AZIA
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