As of 19 April, Kazakhstan's gold and foreign exchange reserves rose to USD 1.715bn from USD 1.655bn on 5 April when the floating exchange rate for the Tenge was introduced. The National Bank's Deputy Chairman, Iskander Beisembaev, who released this information at a news conference on 19 April, said that this increase was primarily due to the compulsory sales of hard currency proceeds by Kazakhstani exporters during the past two weeks. As a result, the money supply (M2) has increased by KZT 7bn to KZT 141bn in recent days. Mr. Beisembaev said that the M2 totalled KZT 150bn at the end of 1998 but it fell to KZT 134bn in February 1999. Kazakhstan has been pursuing a strict monetary policy and had the M2/GDP ratio equal to 8% in early 1999. According to Mr. Beisembaev, the optimum for Kazakhstan would be 15%, provided that inflation is restricted. (Reuters)

Foreign portfolio investors' lack of confidence in emerging markets may prevent Kazakhstan from raising the planned amounts of investment from sales of shares in the country's blue chip companies. It may be, therefore, more reasonable to offer these shares to local institutional investors such as pension funds, the managing director of Kazkommertsbank, Aidan Karibjanov said to Reuters.

The Kazakhstani government launched its "Blue Chip Programme" almost three years ago intending to sell part of the state stakes in large metal and oil companies to foreign investors. However, the ensuing world crisis and plummeting oil and metal prices caused a delay in the implementation of this programme.

The lead-managers for two oil companies, MangystauMunaiGas and AktobeMunaiGas, and the metal companies Ust-Kamenogorsk Titanium and Magnesium Plant and Kazakhmys were selected last year. At present, an investment tender is being held among investment banks and companies to place 16% of the shares in Aluminium of Kazakhstan, 24.5% of Sokolovsko-Sarbaisky Mining and Concentrating Plant, 16% of Kazchrome, and 29.7% of Kazzinc. At the same time a number of market players believe that the government might commence selling these shares to local investors. "Given that these shares ["blue chips"] are rather cheap now, it may be better if local pension funds bought them, not foreign investors. This could create an additional liquidity, which would be attractive for foreign portfolio investors when they will buy these shares later on," said Mr. Karibjanov. (Reuters)

The Czech Prime Minister, Milos Zeman, held talks with his Kazakhstani counterpart, Nurlan Balgimbaev, on expanding trade and economic relations and on repaying Kazakhstan's debt to the Czech Republic. Mr. Balgimbaev was quoted by Interfax as saying the Czech Republic is one of Kazakhstan's key partners in Central and Eastern Europe. He said that the trade turnover between the two countries doubled from USD 50m in 1997 to USD 100m last year. Speaking on the settlement of Kazakhstan's debt to the Czech Republic, Balgimbaev said that a joint commission is to determine the volume of gas exports to the Czech Republic via Russia to repay part of Kazakhstan's debt for construction projects at the Karachaganak gas deposit in Western Kazakhstan where Czechoslovakia participated in the 1980s. The Czech party also expressed interest in setting up a joint venture in Kazakhstan to build trolley buses and he would like to see 100 Skoda trolley busses shipped to the city of Almaty. (Interfax)

At a regional governmental session in Western Kazakhstan last week it was determined that this oil-rich region, which has access to the Caspian Sea, needs USD 10-12bn to invest in its transport and communications systems before the year 2030. This sum includes USD 3bn that should be provided by 2000, and another USD 6bn before 2005. Of the required investment, 40% will be channelled to the development of the regional railway; 23% will be spent to renovate roads; over 25%— to upgrade telecommunications, and 12% for the development of air and water transportation. (Interfax)

The Caspian Pipeline Consortium has reportedly signed a USD 270m contract with a Russian-French consortium for upgrading and constructing a pipeline connection from the Russian-Kazakhstani boarder to the port of Novorossiisk, Russia. The French members of the consortium, Bouygues Offshore S.A. and Spie Capag will lead-manage the project and supply materials. The actual construction will be carried out by the Russian partners. The CPC is building a pipeline from Kazakhstan's Tengiz oil field to the Russian Black Sea terminal in Novorossiisk. Russia's government owns 24% of the project, Kazakhstan's government has 19%, and the Sultanate Oman has 7%. The other 50% is shared among Chevron, LUKArco, Rosneft-Shell, Mobil, Agip, BG Overseas, Kazakhstan Pipelines, and Oryx. (Reuters)