(SRI) - Rumors that Kazakh President Nursultan Nazarbayev has been admitted to a German hospital sent up the cost of Kazakhstan's credit default swaps on Tuesday amid concerns over succession in the Central Asian country.
German mass-circulation tabloid Bild reported on Tuesday that Nazarbayev had admitted himself to the University Medical Centre Hamburg-Eppendorf in northern Germany, citing an anonymous source at Germany's Foreign Office.
"It is not known what he is suffering from," Bild said but reported that the Kazakh leader is being guarded by a heavy security detail.
A spokesman for the Hamburg hospital denied there was any extra security at the hospital and refused to comment citing the hospital's policy on patient confidentiality.
The German Foreign Office for its part denied to have leaked the information to Bild and said it was not involved in getting Nazarbayev into the hospital. The Kazakh Embassy in Berlin only said that the President was on vacation.
"I cannot confirm the report," Reuters quoted a spokeswoman at the Kazakh Embassy as saying. "He's on vacation and he could be anywhere in the world."
Nazarbayev, who turned 71 earlier this month, appeared to be in robust health in recent public appearances, but the report caused nervousness among investors exposed to Kazakhstan.
"The main question that worries everyone in Kazakhstan — elites, citizens and investors — is what will happen in terms of the power succession," Bloomberg quoted Kazakh political scientists and commentator Dosym Satpayev earlier this year.
The Bild report sent the cost of insuring exposure to Kazakh assets higher, with five-year CDS up four basis points to 169 bps, while other countries' CDS spreads narrowed, Reuters reported, citing the financial information services company Markit.
Analysts consider succession the primary risk for political stability in Kazakhstan which, under Nazarbayev's rule, enjoyed steady economic growth. There has been much speculation about possible candidates who could succeed Nazarbayev, but the President himself has given no indication that he was grooming a successor and even considering leaving the office.
"I don't see any inclination that he's prepared to give up power and part of the reason for that is that he doesn't know what will happen to him after he has left the presidency," Bloomberg quoted Anna Walker, a Central Asia analyst at London-based Control Risks, earlier this year.