Lukashenko says he may quit as president
Belarus hits EU with tit-for-tat sanctions
Belarusian police introduce colour-coded torture system for detained protesters
Kremlin publicly condemns Belarusian police brutality in hint of growing frustration with Lukashenko
Russian services PMI rises to 48.2, but remains underwater as recovery continues to slow
Russia to start mass vaccinations on December 7
Azerbaijan’s Aliyev calls on Armenia, Russia, Turkey and Iran to assist in creating Nakhchivan land corridor
FPRI BMB Russia: Sberbank releases a three-year transformation strategy to e-commerce concern
Ukraine’s banking sector continues recovery, but profits still lagging last year
Ukraine’s real wages up over 10% in October but have been stagnant in dollar terms for almost a year
FPRI BMB Ukraine: Public has confused opinions on resolving the Donbas conflict
Western Balkans plus Ukraine subsidised coal with over €900mn in 2018-2019
Estonian parcel robot firm Cleveron eyes €30mn state loan
Estonia’s chief auditor says €1bn in state COVID-19 loans issued haphazardly
Economic sentiment in CEE falls in November as recovery momentum splutters
Estonian animation studio Imepilt to hold IPO
Brighter days ahead: The economic bounce back in 2021
Central, Southeast Europe stock markets jump in anticipation of COVID-free future
VISEGRAD BLOG: An easing of trade tensions but still an uncertain situation for export-oriented Central Europe
Hungary's PM risks isolation as Poland mulls dropping EU budget veto
Poland ready to back down from veto of EU budget
Hungary's ruling party in damage control mode after MEP sex scandal bombshell
Poland’s PMI remains stuck just above the improvement line at 50.8 in November
Czech companies dominate this year’s Deloitte Technology Fast 50 CE
Coronacrisis to get worse before it gets better forecasts wiiw
EU diplomats say no chance of Bulgaria removing veto for Skopje to start EU accession talks
IMF says downside risks to Albanian economy are increasing
EU ministers fail to agree on launch of accession talks with Albania and North Macedonia
Western Balkans commit to green agenda and regional common market at Sofia summit
Bosnia’s opposition ousts nationalist parties in major cities
Bosnia’s main ethnic parties fight to hold onto power in local elections
Southeast Europe’s EU members to get biggest boost from next budget and recovery funds
Bulgaria imposes 3-week lockdown to slow down COVID-19 spread
CEE politicians highlight trade and security ties as they congratulate Biden
Breakaway Transnistria fully under Sheriff’s control as Obnovlenie party sweeps board in parliament election
Moldova’s presidential election is over, now the battle for the parliament begins
Moldova’s foreign policy reset
Russian establishment quick to congratulate Moldova's new president-elect
Rising COVID-19 cases put intense pressure on CEE healthcare systems
MEPs urge European Commission to act against Hungarian media financing in North Macedonia and Slovenia
North Macedonia mulls decriminalising cannabis to boost tourism
Retail surpass pre-crisis peak as Romanians shop instead of holiday
Romania’s stability election
Romanian venture capital firm Catalyst launches new €40mn-50mn fund for TMT
Serbia to tighten restrictions further as coronavirus cases reach new peaks
Slovenian PM Jansa stands alongside Hungary and Poland in EU rule of law row
BEYOND THE BOSPORUS: Turkish number crunchers deliver November inflation surprise of 14%
Erdogan needs to go says analyst assessing Turkey’s economic collapse
Ukraine strikes deal with Turkey to produce killer drones instrumental in Karabakh conflict
In Karabakh deal, as many questions as answers
Protesters flood Yerevan demanding Armenia’s “traitor” PM quit over Nagorno-Karabakh surrender
Who emerge as the real winners from the bloody Nagorno-Karabakh conflict?
Below average 2020 wine production destined for volatile and uncertain global market
Iran calls on Saudis to limit $67bn defence spending to Tehran’s $10bn
Iranian prosecutors pledge to pursue Trump for Soleimani killing even after he leaves White House
No reaction from Kazakh elites as bombshell FT report says Nazarbayev’s son in law siphoned millions from pipeline scheme
UK court freezes $5bn in assets connected to fugitive Kazakh banker Ablyazov
Attack of the Debt Tsunami: global debt soars to a new all-time high
Kyrgyzstan's proposed new constitution provokes widespread revulsion
Kyrgyzstan's China debt: Between crowdfunding and austerity
CFC joins RWC in assessing KAZ Minerals buyout offer as under-valuation
China business briefing: Not happy with Kyrgyzstan
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
Mongolia in lockdown after suffering first local coronavirus transmissions
Mongolia’s wrestling culture: From the grasslands to the cage
No surprises in Tajikistan as Rahmon retains presidency with 91% of vote
A Tajikistan poised on verge of economic calamity set for vote
Tajikistan revives on-off dispute with Iran
Turkmenistan: The dammed united
Turkmenistan: Everybody yurts, sometimes
Dirty money investigation reviews identified payments worth $1.4bn linked to Turkmenistan
Uzbekistan unveils extensive privatisation programme
Download the pdf version
Kaspi.kz’s wildly successful initial public offering (IPO) on October 16 has given a general boost to the global financial technology (fintech) and e-commerce sectors. Its global depository receipts (GDRs) rose as much as 33% on debut day, raising Kaspi’s valuation to $8.4bn from $6.5bn when its shares began trading. The GDRs closed 23% higher than the listing price on the same day at $41.50 on London Stock Exchange (LSE).
A month prior to Kaspi’s listing, Forbes Kazakhstan ranked the company first among the top e-commerce firms in Kazakhstan in 2020. The status was awarded within the TOP KZ Retail E-Commerce ranking compiled annually in collaboration with international consulting company Baker Tilly Kazakhstan and the Digital Association of Kazakhstan.
Forbes also mentioned that Kaspi.kz e-Commerce sees well-known international brands—such as Adidas, O'STIN, UGG, New balance, DECATHLON, DeFacto, Marks & Spencer, Nike, Reebok, KOTON, SPORTMASTER, ALDO, SKECHERS, Ecco and many others—selling through it.
Earlier, Moody’s ratings agency published comments on Kaspi.kz’s primary business, Kaspi Bank.
“Kaspi Bank's Ba2 local and foreign currency deposit ratings are based on its Baseline Credit Assessment (BCA) of b1 and Moody's expectation of a high probability of support to the bank from the government of Kazakhstan (Baa3), which results in a two-notch uplift from Kaspi Bank's BCA,” Moody’s said. The high probability of support was likely the result of Kaspi Bank’s systemic importance in Kazakhstan.
“Kaspi Bank's BCA is underpinned by the demonstrated resilience of its business model and capital position through the cycle, the bank's strong profitability metrics and its granular funding base,” Moody’s added.
“Our Kaspi.kz Super App has now reached 8.5 million monthly users, further cementing its market leading position. Our e-Commerce platform, the largest e-commerce business in the country, is seamlessly integrated into our app and our team continues to work tirelessly to improve user experience,” Forbes Kazakhstan quoted Mikhail Lomtadze, CEO and co-founder of Kaspi.kz, as saying.
“We have expanded delivery to 54 cities and increased the range of products to almost 400,000. For the first eight months of this year, our users made 2.6 million online purchases for almost 200 billion tenge [$467mn]. The amount of purchases grew 125%, the number of purchases by 150% compared to last year," he added.
Setting a benchmark
In September, Yandex made a bombshell announcement. It said it intended to acquire Russia’s only pure online bank, Tinkoff Bank, for $5.5bn. The news caused both companies to gain over $2bn in value as their stocks rallied. Kaspi shareholders originally hoped the deal could set a benchmark for Kaspi’s valuation, according to a report by Reuters.
However, Yandex called off the deal on October 16. That has made Kaspi’s IPO the real benchmark-setter for fintech deals and IPOs amid the ongoing coronavirus pandemic restrictions and lockdowns.
Still, Yandex’s willingness to carry out such acquisitions reveals the potential for Yandex to eventually buy out companies like Kaspi.kz. As covered by bne IntelliNews, Yandex is venturing into the financial services terrain, stepping up competition with the Sber ecosystem of its former ally, state-controlled bank Sberbank. Thus, another large potential acquisition by Yandex in the fintech sector may well hove into view in the near future.
But who knows? Yandex, the most valuable tech company in all of Europe, started out without much competition in Russia, before becoming a dominant force in the region, and Kaspi.kz finds itself in a similar position in Kazakhstan. There is yet potential for Kaspi.kz to take on a similar leadership role in Central Asia and beyond as it plans to expand outside of Kazakhstan.
While the Kaspi listing is seen as positive for fintech in general, it is also obvious that Kaspi is riding a general global wave and just happened to be one of the early beneficiaries of that wave.
Hunger for tech IPOs amid coronavirus
The tech sector has generally benefited from the pandemic globally. Much of the growth seen in US stocks has been driven by technology stock prices.
It is not far-fetched to say that Kaspi’s valuation is a unmistakable sign of the evident hunger for IPOs—tech sector flotations in particular as other sectors have been strangled by the coronavirus crisis.
Moreover, the stock market surge appears to be led by “growth stocks”, according to analysts.
“The pace of the market’s recovery is not at all unusual. What makes this cycle different is the leadership of high quality growth stocks,” MarketWatch lately reported, citing remarks in a note to investors from Jonathan Golub, chief US equity strategist at Credit Suisse.
GlobalCapital’s Sam Kerr noted that Kaspi’s success means that future growth-oriented IPOs from emerging and frontier markets may also experience similar results.
Nevertheless, what makes Kaspi a standout among tech IPOs is its aforementioned systemic importance as a payment system and the third largest bank in Kazakhstan. One could argue that what we have here is not merely a coronavirus-inflated stock, though at the same time it is clear that Kaspi managed to raise its net income by 50% to Kazakhstani tenge (KZT) 115.6bn (€232.13mn) in the first half of 2020, mainly thanks to lockdowns.
“The key constraint on the [Baseline Credit Assessment] is the bank's high reliance on the consumer finance segment, which is vulnerable to the coronavirus outbreak,” Moody’s said in comments on Kaspi.kz bank business in July. Indeed, Kaspi Bank accounts for 32% of all consumer loans in Kazakhstan.
“In the context of retail restrictions related to the coronavirus pandemic, our e-Commerce platform is an essential partner for many companies in Kazakhstan. We are helping our retailers increase their sales, grow their business and retain jobs,” Lomtadze was quoted as saying by Forbes Kazakhstan.
“In the midst of the Covid-19 pandemic, our Super App has become more important and essential than ever,” Lomtadze has said in a separate statement. “As people’s daily lives become increasingly digitalised we expect the relevance of Kaspi.kz’s ecosystem to the unfolding digital future to only increase.”
Lomtadze’s comments were made in a positive light, but the question remains: by how much will the eventual lifting of the pandemic-related measures weaken the appeal of fintech firms like Kaspi?
Paving way for Kazakh IPOs?
Kaspi’s LSE listing has another significance. Apart from being the first Kazakh financial company to float its shares in London since AO Alliance Bank’s offering in 2007, Kaspi is also the first Kazakh company to list on the LSE since uranium miner Kazatomprom’s IPO two years ago.
Ayuna Nechaeva, the LSE’s head of Europe, has been cited as noting that Kaspi’s London listing is not only the largest made by a Kazakh firm since 2007, it is also the biggest international technology-focused IPO in London to have taken place so far this year.
Kazatomprom’s outing was meant to be the first of a wave of flotations conducted by Kazakh state-owned firms as part of a larger privatisation programme. However, KazMunayGas, Kazakhstan’s state-run oil and gas company, delayed its planned joint London and Nur-Sultan listing in 2019 amid continuous delays with other promised Kazakh listings, including those of telecoms operator Kazakhtelecom and airline Air Astana.
The successful Kaspi.kz IPO took many investors by surprise as few keep themselves appraised as to what Kazakhstan is up to abroad. The offering may prove particularly useful in putting Kazakhstan on the map for bigger and more regular IPOs than it had come to expect on the global market. While Kaspi’s big debut is still fresh on people’s minds, the Kazakh government may be wise to briskly follow up on some of those previous IPO promises, assuming the pandemic can be brought to heel in 2021.
here to continue reading this article
and 5 more for free or purchase
12 months full website access including
the bne Magazine for just $250/year.
Register to read the bne monthly magazine for
Password could contain only
and have 8-20 symbols length.
Please complete your registration by confirming your
A confirmation email has been sent to the email
address you provided.
can't be empty.
No user with
this email address.
Access recovery request have been expired. Please,
Access recover request have been expired.
Please, try again.
To continue viewing our content you need to complete
the registration process.
Please look for an email that was sent to
with the subject line
"Confirmation bne IntelliNews access". This email will have
instructions on how to complete registration
process. Please check in your "Junk" folder in
case this communication was misdirected in your
If you have any questions please contact us at firstname.lastname@example.org
Sorry, but you have used all your free articles fro
this month for bne IntelliNews. Subscribe
to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free
digital weekly newspaper to subscribers to
the online package.
Click here for more subscription options,
including to the print version of our
flagship monthly magazine:
Take a trial to our premium daily news
service aimed at professional investors that
covers the 30 countries of emerging
For any other enquiries about our
products or corporate discounts please
contact us at
If you no longer wish to receive
Magazine annual print
Website & Archive
Combined package: web
access & magazine print
Take a trial to our premium daily news service
aimed at professional investors that
covers the 30 countries of emerging Europe: