BlackRock Investment Institute's Ben Powell, who serves as chief investment strategist covering the Middle East and APAC, grouped Kazakhstan and Uzbekistan with the Gulf countries and India as places seeing more capital interest. In Kazakhstan specifically, he said the team is "very encouraged by the reform, the pension reform, the capital-market reform that we're seeing." Faster growth and policy shifts, plus rising demand for resources such as critical minerals, are helping put both economies on the map.
Through the start of the year, overseas investors have funneled about $2 billion into tenge‑denominated bonds. The country's output rose 4.1% from January through August, with manufacturing and construction doing much of the heavy lifting. Kazakhstan, the region's largest economy, sits between Russia and China and is lining up funding for a sizable infrastructure buildout, including a share offering by its railway operator and loans from the Asian Infrastructure Investment Bank.
With oil trading higher, Central Asia's biggest energy exporter is getting an additional boost, owing to the US‑Israeli war with Iran sending Brent crude above $100 a barrel. "Kazakhstan becomes more friendly for capital, and when the country sees the benefits, it becomes even more friendly," Powell said. "If we see more opportunity, we would love to deploy more capital."
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In July, BlackRock representatives sat down with Uzbek President Shavkat Mirziyoyev to discuss working together on privatizations, petrochemicals and artificial intelligence. The firm also took a cornerstone stake in the initial share sale for Uzbekistan's national investment fund. "In Uzbekistan, we are always interested in opportunity," Powell said. "It seems likely that we will find more opportunity in Uzbekistan going forward."
Powell pointed to stubborn inflation and the wars in the Middle East and Ukraine as the main global risks. He expects gold to hover near historically elevated levels as investors spread risk, and said oil could jump sharply if supply stays tight and if China, which has pulled back on crude imports, buys more. "At some stage they will need to come back into the market," he said.
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