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Asia-PacificJuly 31 2007

New strength attracts interest

Kazakhstan’s economic growth story is attracting foreign investors, especially in the booming banking sector. Ben Aris reports.
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Kazakhstan is on fire as foreign investors begin to flood into the big country with a small population in central Asia’s steppe. Oil revenues have primed the pump but after per capita income broke through the $5000 mark, a virtuous circle of spending and investment has resulted in the economy starting to diversify. The first big beneficiary of the change has been the banking sector.

Just how far things have progressed was thrown into stark relief in June when Austria’s Bank Austria Creditanstalt (BA-CA) announced the first ever acquisition of a Kazakh bank by a foreign investor. BA-CA bought leading second-tier institution ATF Bank for €1.6bn – the second biggest acquisition in the former Soviet bloc, beaten only by Erste Bank’s takeover of Banca Commerciale Romana last year.

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