Market Insights | Kazakhstan has more than Borat

By Cornelius Zeeman & Seipati Rakgoale,
Fairtree Portfolio Manager & Equity Analyst

Correlation with oil.


Despite being the world’s ninth-largest country by area, Kazakhstan often goes under the radar. Kazakhstan is known for being strategically positioned between China and Russia, which has benefited trade. Extractive sectors such as hydrocarbons account for the bulk of the economy, and growth has always been linked to global oil prices. A recent example was 2014-2016 when oil prices suffered declines; the Kazakhstani Tenge devalued from 155 to 350 against the US Dollar.

Graph 1: Kazakhstan Real GDP vs Oil Prices

Source: Bloomberg

Diversification of export income has been a priority for Kazakhstan’s policy since it gained independence in 1991. The export mix has, however, only seen minor changes, with Hydrocarbons still making up most of the export revenue.

Figure 1: Kazakhstan Total Exports for 2022

Source: Trading Economics

A favourable macro backdrop.


Kazakhstan has a young population with a high literacy rate, which is positive for the labour force and consumption dynamics. Their government debt is low, leaving scope for future fiscal support. Their economic success, as evidenced by GDP/capital growth over the last two decades (see Graph 2 below), has been impressive compared to other ex-Soviet countries and emerging market peers. They have significant agricultural potential due to high arable land availability.

Graph 2: Government Debt to GDP vs Other Countries – Debt to GDP (%)

Source: Bloomberg

Absolute GDP/Capital might be higher for other countries, but Kazakhstan has seen the most relative growth, with almost 5 times higher growth vs the previous decade.

Graph 3: GDP Per Capita at Current Prices in USD

Source: IMF, 2023

Kaspi is a driver of innovation in Kazakhstan.


Kaspi has contributed to the development of capital markets in the country. It has led Kazakhstan’s digitisation as it operates an online payment, Marketplace and fintech platform. It has been ingrained in the Kazakh consumer’s everyday life, much like WeChat in China. Their app user base comprises 70% of the country’s population.

Their payments platform can be used for peer-to-peer transactions or bill payments, Marketplace allows merchants and customers to buy and sell various products and the fintech platform allows for easy working capital financing for merchants.

Figure 2: Super App

Source: Kaspi Investor Relations

Engagement statistics.


Their user engagement is outsanding with 65% of monthly users engaging with the app in a single day window, this highlights their pricing power but also the ability to add on more functions with high probability of success.

Graph 4: Ratio of DAU to Average MAU

Source: Kaspi Investor Relations
*Note: DAU is daily average users, while MAU is monthly average users

Kaspi has done exceptionally well in the Kazakh market, and it is easy to overlook the possibility of further accelerated growth. It is important to remember that compared to other countries, they are still in the nascent stages of E-commerce and SME (small and medium-sized enterprise) penetration. This regional economy remains underpenetrated in other key segments that could benefit from the secular growth of various industries in the country.

Graph 5: Kazakhstan E-Commerce Penetration FY2022 vs Peer Countries

Source: Morgan Stanley (May 2023)



Kaspi has seen phenomenal revenue growth over the last few years, and its margin expansion has been impressive for a platform that still has the capacity for additional services (see Graph 6 below).

Graph 6: Net Income Margins

Source: Company Financials

The “Mockumentary” Borat was correct: The United States and the rest of the world do not know much about Kazakhstan. While it will take implementing the correct policies to drive growth, companies like Kapsi, which are aligned with the government, have aided with country visibility and development of non-primary sectors.


Fairtree Asset Management (Pty) Ltd is an authorised financial services provider (FSP 25917). Collective Investment Schemes in Securities (CIS) should be considered as medium to long-term investments. The value may go up as well as down and past performance is not necessarily a guide to future performance. CISs are traded at the ruling price and can engage in scrip lending and borrowing. A schedule of fees, charges and maximum commissions is available upon request from the Manager. A CIS may be closed to new investors in order for it to be managed more efficiently in accordance with its mandate. Performance has been calculated using net NAV to NAV numbers with income reinvested. There is no guarantee in respect of capital or returns in a portfolio. Prescient Management Company (RF) (Pty) Ltd is registered and approved under the Collective Investment Schemes Control Act (No.45 of 2002). For any additional information, such as fund prices.

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