Kazakh people’s IPO could happen next year, says wealth fund chief

January 27. Central Asia Newswire

Kazakh people’s IPO could happen next year, says wealth fund chiefKazakhstan may begin privatizing major state enterprises as early as next year, the head of the country’s sovereign wealth fund Samruk-Kazyna said at the World Economic Forum in Davos, Switzerland on Thursday.

Samruk-Kazyna chief Kairat Kelimbetov expounded during an interview with Reuters on the wealth fund’s plans to raise money by offering shares through a people’s initial public offering (IPO)

“We are talking about our main companies in oil and gas, electricity grid, energy generation and mining companies,” Reuters reported Kelimbetov as saying. “During the first quarter of this year, we will give our proposal to the government and then it will be a political decision.”

Samruk-Kazyna owns $70 billion worth of assets, including the state oil and gas firm KazMunaiGas, the copper mining giant Kazakhmys, nuclear company Kazatomprom and other state-owned companies.

In October, Kelimbetov said the state was considering offering 10-20 percent of KazMunaiGas to the public, a statement which he later retracted.

Kazakhstan is interested in attracting investors into its key industries, Kelimbetov told Reuters on Thursday.

“We need huge investment into the development of oil and gas, mining and uranium, we need huge foreign direct investment into Kazakhstan and we are looking for it,” he added.

He said investment in Kazakhstan over the past ten years amounted to close to $100 billion.



Central Asia must diversify to attract investors, OECD says

January 27. Central Asia Newswire

The Central Asian republics need to diversify their economies to lure more foreign investors, according to a new report presented at the World Economic Forum in Davos, Switzerland on Thursday.

The analysis undertaken by the Organization for Economic Cooperation and Development (OECD) recommends that the region’s five governments must implement structural reforms to beat three key barriers to their competitiveness.

The OECD report, titled “Central Asia Competitiveness Outlook,” identified these as: a mismatch between worker skills and job market needs, limited access to finance for smaller businesses, and excess dependency on the energy sector.

Central Asia’s vast energy reserves, mineral and agricultural resources and almost universal literacy rates propelled its strong performance for a decade to the global financial crisis, the report noted.

But the report also pointed out that over-dependency on those natural and human resources leaves them “highly exposed to the uncertainties of international markets,” the OECD report stated.

The main author of the report, Fadi Farra, chief of the OECD Eurasia Competitiveness Program, notes that despite its very strong competitiveness potential going forward, “this region has been so far not enough on the radar screen of investors,” Radio Free Europe/Radio Liberty reported him as saying.

“The gap between the current endowments, the current performance, and the potential future performance, compared to other regions, is actually quite large. And there are opportunities to improve competitiveness.”

The report urged national governments to work more closely with the private sector, focusing on developing education strategies in line with needs of labor markets; financing small- and medium-sized enterprises as a priority; enacting further land ownership regulations; and offering non-energy sectors to investors.

“Countries in Central Asia have a great potential. But they need to be able to leverage their comparative advantages, including their geographic location, their abundance of natural resources and a hard-working and young labor force. The combination of structural reforms, innovative policies and social programs will allow them to reach their full potential,” OECD Secretary-General Angel Gurr?a told the World Economic Forum meeting.

The four-day international event, which gathers political and industry leaders across the world, ends on Sunday.