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People’s IPO Program may not meet the deadline: Majilisman Murat Abenov

13 february 2012, 19:26
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Murat Abenov. Yaroslav Radlovsky ©
Murat Abenov. Yaroslav Radlovsky ©
Majilisman Murat Abenov doubts People’s IPO Program may meet the deadline, he told that in his interview for Tengrinews.kz.

“Having studied all the publicly accessible information, I would say I have more questions rather than answers. Doubts outweigh confidence. One reason is that most part of common people are not at all aware of the Program (…) It’s early to speak of success (…) There is no ground to be optimistic”, Mr. Abenov believes.

He emphasized that “information in a simple comprehensible language for common people to understand is not sufficient. All the available information is more designed for experts and those who are aware of financial issues. And the info tends to be distributed through channels mostly inaccessible for common people”, the Majilisman believes.

“When during the election campaign we toured country regions we talked to common people and we found that the term “People’s IPO” makes no sense to them”.

“Lack of necessary information will complicate fair valuation of the shares to be floated (…) Therefore, Nur Otan plans to launch a special team of experts to run a wide-scaled information campaign to raise overall financial awareness of the population (…) a similar project in Russia hasn’t been quite successful, Kazakhstan obviously doesn’t want to replicate their mistakes”.

According to him, such a team should include Parliamentarians, Bolashak (full scholarship covering tuition fees as foreign universities) alumni, reps of think-tanks.

Speaking at the Nur Otan party congress on February 11, 2011 President Nazarbayev instructed the Government to launch Initial Public Offerings (IPO) for common people before the end of 2011. The program is known as People’s IPO. According to President Nazarbayev, the IPO for the general public will enable citizens to purchase shares of the largest Kazakh companies, giving them a new tool for investments and savings.

Tengrinews.kz reported August 23, quoting Economic Development Minister Kelimbetov, that “the shares [of the national companies to be floated within the People's IPO] will be offered at market value (…) we’ve chosen the best timing: the companies are not overvalued at the present time”.

According to the Minister, potential demand for the shares on the part of common people is estimated at $100-200 million. However, the demand may grow following the nation-wide campaign designed to raise financial awareness of the population at large.

The Minister added that “on the part of accumulation pension funds, potential demand is estimated at $200-300 million with regards to the first wave of IPOs”.

Late December 2011 Managing Director of Samruk-Kazyna Welfare Fund Peter Howes said that the price of one share in the People’s IPO would be affordable for common Kazakhstan citizens.

According to him, KazTransOil and KEGOK companies that will be the first to offer their stock are preparing to launch the program. “They are going to split their shares to make the price affordable,” Howes said adding that the cost had not been defined yet.

“We cannot name the price of one share right now, but of course we can make the price not 10 thousand tenge, but around 100 tenge. We will make the prices low enough to allow everyone to buy at least one share or a batch of shares. I think that if one share costs, say, 150 tenge, it will be affordable for everyone. Of course, if the broker services costs 400 tenge, there is no point in buying only one share, but if someone wants to, they can. We want people to feel that they have their say,” Howes said at the time.

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