Kazakhstan’s state-owned oil and gas company ends the year with a $330 million cash injection after finally making its IPO debut, more than a decade after plans to go public were announced.
The listing of KazMunaiGaz (KMG) shares on the Astana and Almaty stock exchanges breathes new life into a delay-plagued privatization course.
KMG’s initial public offering (IPO) was the largest ever on the Kazakh stock market in terms of the number of bids received and final sale volume.
However, the results suggest that investors’ appetites to buy into large Kazakh companies may not be as strong as Astana would like since the IPO was signed.
KMG offered 5 percent of the shares, but investors snapped up just 3 percent.
Still, KMG raised about $330 million from the sale of 18.3 million shares, Samruk-Kazyna, the sovereign wealth fund that controls state assets, said in a expression. Before the fund went public obsessed 90.4 percent of KMG shares, while Kazakhstan’s Central Bank owned 9.6 percent.
This marks the restart of what the government calls the People’s IPO program, designed to create a retail investor class in Kazakhstan.
KMG is only the third company to go public since the plan was announced in 2011. The other two are oil transport company KazTransOil and energy company KEGOC.
Several factors have caused delays, from the pandemic to various national and international economic crises Resistance by interest groups suspicious of the scrutiny that public property entails.
President Kassym-Jomart Tokayev called for reviving the People’s IPO last year as a chance for all citizens to “have an opportunity to share in the national wealth.”
This fits with his promises of a more equitable distribution of wealth as he seeks to stem the crony capitalism that permeated Kazakhstan under his predecessor Nursultan Nazarbayev.
This resulted in most of the wealth being concentrated in the hands of the few. The KPMG consultancy calculated In 2019, 162 people, just 0.0001 percent of the population, owned 55 percent of Kazakhstan’s vast wealth.
The People’s IPO program will make companies more accountable and transparent and is a step towards building “an open and efficient economy in the interests of the people of Kazakhstan,” said Prime Minister Alikhan Smailov recommendedwhen he began trading KMG shares on the Astana Stock Exchange on December 8.
Against this background, Samruk-Kazyna rejected some offers for KMG shares in order to prevent “the concentration of large blocks of shares with individual large investors”. It didn’t name her.
Out of 129,900 applications received for 181 billion tenge (US$386 million), bids worth 153 billion tenge (US$326 million) were approved.
She gave priority to offers from Kazakhstan, which were already in the majority.
Foreign individuals and companies received 4.3 percent of the shares, while 48.5 percent went to individuals of Kazakhstan and 47.2 percent to Kazakh companies.
The IPO “proved the high potential of the Kazakh securities market, as well as a significant increase in investment skills and activity among the citizens of Kazakhstan,” said Almassadam Satkaliyev, Chairman of the Board of Samruk-Kazyna.
Now other companies prepare IPOs include Air Astana (whose plans to list have slipped this year); Kazakhstan Temir Zholy (KTZ), the railway operator; KazPost, the post office; and Samruk Energy, a power generation company.
Neighboring Uzbekistan has also made it IPO program off the ground just before the end of the year. ambitious plans The IPO of 15 large companies by 2023 was pushed back, but the car manufacturer UzAuto Motors started its IPO on December 1st. Offers close December 22nd.
From Eurasianet.org
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