Kazakhstan's Pension Funds Face Lower Returns Amid Middle East Crisis
How Will Kazakhstan's Investments Fare Amid the Middle East Crisis?
Our correspondent asked National Bank Governor Timur Suleimenov about the potential impact of the escalating tensions in the Middle East on Kazakhstani assets.
"Given the situation in the Middle East, experts warn that returns from Kazakhstani pension savings in the Unified Accumulative Pension Fund (UAPF) could decline in the first quarter. The securities, bonds, and gold—where both the UAPF and the National Bank invest—are plummeting as global markets take a hit. How significantly do you think this crisis will affect our investments?" a reporter asked Suleimenov in the corridors of the Mazhilis (lower house of Parliament).
The National Bank chief explained that a portion of the assets held by both the National Fund and the UAPF is invested in bonds and stocks—financial instruments tied to the securities market. Their performance, he noted, depends on broader market trends.
"The good news is that the majority of our securities are invested in the markets of developed countries," Suleimenov said. "Right now, the hardest-hit markets are in Southeast Asia, since they rely heavily on oil shipments passing through the Strait of Hormuz. The U.S., UK, and Europe don't depend on that oil—it primarily flows eastward. That's why financial markets in South Korea, Japan, and Southeast Asia are under the most pressure."
According to Suleimenov, Kazakhstan has relatively limited exposure in those regions. "If there is an impact, it will be minor," he asserted. However, he clarified that investing in securities inherently involves seeking upside potential—the possibility of growth. If any given asset declines in value due to external factors (such as conflict escalation), "it will affect us as well."
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