Stable infrastructure companies to be the first to float shares as part of People’s IPOs

Stable infrastructure companies will be the first to be offered as part of the People’s IPO, Kuandyk Bishimbayev, Vice Chairman of the Board at Samruk-Kazyna Sovereign Wealth Fund, told a Tengrinews.kz journalist in an exclusive interview. Presumably, the first companies to float their shares will be KEGOC (national electricity grid operator), KazTransOil (oil shipping company), KazTransGas. According to Mr. Bishimbayev, the program is long-term and is not limited to these companies. “The program will continue through 2015 (…) every year as soon as a new batch of companies is ready for the People’s IPO, we will be floating up to 10-15% offering them to common people, citizens of Kazakhstan”. “An obvious plus would be creation of the new layer of stock market players. We hope the Program will give impetus to the entire stock market development”, Mr. Bishimbayev said. According to Mr. Bishimbayev, the first IPOs are expected to be run in the Q1/Q2 2012. The first wave of companies offering their shares will be stable companies. “We are fully aware that common people are not professional investors. Offering high-risk-involving assets that excessively depend on volatile global markets would be not correct. This was a recommendation of our consultants. So we fully embrace this recommendation”, he said. Earlier the country’s Minister of Economic Development and Trade Kairat Kelimbetov said in an interview for Russian Kommersant newspaper , that “(…) Privatization will be run in two stages. At the first stage, that is in 2012-2015, Kazakhstan will launch the so-called People’s IPOs of national companies. Afterwards, some national holdings will be floated to attract strategic global investors”. “We have estimated that at the first stage we could raise about $500 million, with $300 million coming from the country’s pension funds and the rest $200 million coming from common people”, the Minister said. Speaking at the Nur Otan party congress on February 11 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 the President, shares of Samruk-Energo (generation and transmission of electrical energy), KEGOC (national electric power grids operator), KazPost (national postal service) were going to be floated before the end of 2011. Shares of KazMunaiGaz (national oil and gas company), Kazakhstan Temir Zholy (national railway company) and KazAtomProm (national atomic company) are to be offered for the IPO in 2012-2013. 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.