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Angry Kazakhstan props up bank shares
Real estate news By David Litterick
1:28am BST 13/10/2007
Kazakhstan will respond to an "attack" by hedge funds by buying shares next week in the country's banks that are listed on foreign exchanges to support prices, its prime minister said. "Kazakhstan is under attack from hedge funds and we will fight back," Karim Masimov said, after president Nursultan Nazarbayev complained the country was suffering from "unfounded" downgrades of its credit ratings.
Standard & Poor's cut Kazakhstan's debt ratings and lowered the outlooks on three banks this month, citing concern that falling confidence would end the country's eight-year boom. The former Soviet republic holds 3pc of the world's oil.
The government said it would buy stock of banks until prices reach "pre-August levels" and will do the same for non-banking stocks "if warranted". The state was also prepared to lend $4bn (?2bn) to banks to ensure liquidity, he said. Kazakh banks have been hit by the ripples from the US sub-prime crisis. Kazkommertsbannk, Alliance and Halyk Savings Bank are all listed in London. Many banks in the country have also been hurt by an outflow of deposits and waning confidence in the national currency, the tenge. In August, banks suffered "massive withdrawals".
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