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All pension savings accumulated in Kazakhstan should be consolidated into a single national pension fund by July 1, Deputy Prime Minister Kairat Kelimbetov said on February 6. Analysts remain wary of the scheme effects on the country's financial markets.

The Single National Pension Fund will be owned by the government of Kazakhstan, and will be set up on the basis of the existing State National Pension Fund (GNPF), owned by the central bank, Kelimbetov told a government meeting, according to a statement from the prime minister's press service.

The GNPF held around 19.3% of the KZT3.177trn ($20.7bn) in Kazakh pension funds as of December 2012. In addition to the state owned GNPF, Kazakhstan has 10 private funds.

Plans to create a single pension fund were announced by President Nursultan Nazarbayev in January. Nazarbayev told officials that the creation of the fund would help to support the economy and maintain the pace of growth without dipping into the $58bn National Fund.

All pension savings accumulated by Kazakh citizens will be transferred to the new fund by July 1. For the plan to go ahead on schedule, Kazakhstan will have to amend eight codes and twenty-two laws within the next four months.

Kelimbetov told officials that the creation of a single pension fund did not mean that pension savings would be nationalised. "The pension funds remain the property of the citizens," he insisted. However, analysts are wary of the effect of the scheme on the country's financial markets.

"The consolidation of pension funds has provoked considerable debate in the market. Noting that pension funds are the largest group of independent investors on the local market (with almost US$21bn AUM), and that those pension funds were competing with each other, we believe that such an evolution can only harm development of the local market," Visor Capital writes in a note.

"Firstly, a quasi-monopoly is in a position to dictate prices of future bond issues (and more generally fund raisings); this will make it more difficult for Kazakh companies to find relatively cheap sources of funding. Secondly, local stock exchange liquidity, which is already subscale, will likely diminish further."