Kazakhs with their backs to the wall
"We would be very bullish on Azeri financial markets, if any existed," says Gulhan Ovalioglu at Istanbul-based specialists Global Securities. Despite its potential oil revenues and a putative privatization programme, Azerbaijan, doesn't have any capital markets to speak of, accept for a thinly traded T-bill market. The only other traded instruments are privatization vouchers and so-called options on them.
Investors have been waiting since July last year for a stock exchange to be created but have been frustrated by the crawling pace of the privatization programme. "The blue chip privatization programme has lost its credibility. When will we have something to invest in?" complains one London-based investor.
The hunger for investment opportunities is odd. Global commodity prices are low and trending lower. Exports have already fallen 31% because of oil price declines. The Russian crisis has exacerbated export pressures. Russia alone accounts for 23% of the country's export market. Non-oil exports have also been hit hard, thanks to a 21% appreciation of the local currency, the manat, against the dollar over the past two years.
However, local experts such as Global Securities and Baku-based Minaret Group say they aren't worried about these figures.