Kazakhstan Chamber of Commerce in the USA

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Kazakhstan seeks export markets for surplus electricity 0

Posted on June 08, 2016 by KazCham

Colibri Law Firm BI@colibrilaw.com

Kazakhstan now has a surplus electricity generation capacity of around 4-5 thousand MW per year, and is considering the possibility of electricity export and transit, according to Bakytzhan Kazhiyev, chairman of the Kazakhstan Electricity Grid Operating Company (KEGOC).

Kazhiyev said China needs very large volumes of electricity: “[The Chinese] are not very much interested in electricity supplies to the border region of Xinjiang; they need power supplies to central China. We are negotiating such supplies with our Chinese colleagues.”

Speaking about the possible exportation of electricity to Afghanistan and Pakistan, Kazhiyev said that these countries do have a demand for power, but “we have no transmission grids, no possibility to transfer surplus electricity that exists in Kazakhstan

Four Kazakh companies to float in People’s IPO 0

Posted on August 20, 2014 by KazCham

Business Intelligence from Colibri Law Firm: Issue #91

Four big Kazakhstani companies will float their shares during the People’s IPO. These are KEGOC, Samruk-Energy, Kazakhstan Temir Zholy and KazAtomProm.

Kazakhstan Electricity Grid Operating Company (KEGOC) is a national transmission grid operator of Kazakhstan.

Samruk-Energy produces, transmits and distributes electricity in Kazakhstan. It also produces heat, mines coal, constructs power facilities, operates power plants, power lines, and substations, operates thermal and hydroelectric power stations, and designs and constructs renewable energy facilities for the production of electricity and heat from renewable energy sources.

Kazakhstan Temir Zholy is the national railway company of Kazakhstan. 

KazAtomProm is a state-owned nuclear holding company that produces Uranium, Beryllium, Tantalum and Niobium.

Kazakhstanis will be able to purchase KEGOC’s stock as soon as in December this year, but no preliminary dates for the other three companies are available yet. Only very few details of the campaign have been disclosed so far. Costs and rules and restrictions have not been unveiled. It is known that 10 percent minus one share in KEGOC is going to be floated. The main advantage of the People’s IPO is that shares will be sold at their nominal value, that is, the lowest price per share at the primary listing bid. And the new holders of the floated stock will be able to start receiving dividends on their stock in one year after the purchase.

Evolution of role sees fund gearing up for ‘People’s IPO’ 0

Posted on December 25, 2011 by Alex

The heart of Kazakhstan’s economy, Samruk-Kazyna has, since its inception, played a crucial role in the country’s industry and economy. Now the fund is ready to float some  of its assets at discounted prices to retail investors. By Clare Nuttall

Kazakhstan’s sovereign wealth fund Samruk-Kazyna put to work billions of US dollars to support the economy during the global economic crisis. With Kazakhstan growing strongly, the fund’s role has evolved – it is now responsible for creating new industries and increasing efficiency in the economy’s most important companies.

This year will see further dramatic changes, as minority stakes in some of its largest and most attractive companies are floated on the domestic stock exchange. Samruk-Kazyna was created in the depths of the crisis through the merger of two existing organizations – holding company Samruk and investment company Kazyna – in October 2008, and its importance to the Kazakh economy cannot be overestimated. Its subsidiary companies include the national rail and postal companies, electricity grid operator Kegoc, state oil-and-gas giant National Company KazMunaiGas, nuclear company Kazatomprom, national air carrier Air Astana, and three of the top four banks. It is also the parent of the Damu small enterprise fund, private equity fund of funds Kazyna Capital Management, and other  financial organizations.

Overall, Samruk-Kazyna manages assets worth in excess of $70 billion, accounting for around 40 percent of the economic activity in the country. It has a total of 404 subsidiaries and affiliated companies. As of March 2010, Samruk-Kazyna announced it had invested KZT897 billion ($6.1 billion) from Kazakhstan’s National Fund to support the economy during the crisis. Its largest financial commitment was to the banking sector, where it invested some KZT486 billion.

Other anti-crisis measures included supporting the real-estate sector (KZT360 billion), support for small and medium-sized enterprises (KZT120 billion) and implementing industrial and infrastructure projects (KZT121.5 billion).

Samruk-Kazyna became the majority shareholder of  BTA Bank and Alliance Bank, injecting liquidity when both were on the brink of collapse in February 2009. Today, a debt restructuring for the two banks has been agreed with creditors.

At the same time, the fund took minority stakes in Kazakhstan’s other big-four banks, Halyk Bank and Kazkommertsbank. Now that GDP growth in Kazakhstan has returned to pre-crisis levels, Samruk-Kazyna is starting to divest some of the assets it acquired during the crisis. The fund has already exited its investment in Halyk, selling the stake back to the bank and its majority shareholder Almex.

Kazkommertsbank could buy back its shareholding in the near future. A sale of BTA to Russia’s Sberbank is still on the cards and Samruk-Kazyna is also looking at potential exit routes for Alliance, but it is adamant that it will sell its shareholdings only if the price is right.

Post crisis, Samruk-Kazyna is involved in raising the efficiency of its subsidiaries, and is the main conduit for big foreign investment projects. The emphasis within Kazakhstan has shifted toward production of processed and value-added products, rather than being purely a supplier of raw materials.

Several of the priority projects within the 2010-14 Accelerated Industrial and Innovative Development program are aimed at achieving this goal. Samruk-Kazyna is already working to diversify and industrialize Kazakhstan. The ‘breakthrough projects’ under the Samruk-Kazyna umbrella include reconstruction of the Atyrau refinery, modernization of the national electricity grid and construction of several new power stations. Within Samruk-Kazyna, two holding companies created in late 2008 are responsible for the chemicals and metals sectors, respectively. The United Chemicals Company was set up to develop a national chemicals industry and reduce Kazakhstan’s dependence on imports of products such as fertilizers. Tau Ken Samruk is the holding company for the Kazakh government’s stakes in metals and mining companies. While oil and gas still account for the lion’s share of Kazakhstan’s exports, metals and mining have been growing in importance in recent years.

Soaring metals prices, and the steady growth in demand from neighboring China in particular, have provided an impetus for Kazakhstan to increase its output. The government stakes in two major London Stock Exchange-listed mining companies – Eurasian Natural Resources Company (ENRC) and Kazakhmys – are held within Tau Ken Samruk. Both companies have an immense presence in the Kazakhstan mining sector, as well as internationally.

Kazakhmys is the largest copper producer in Kazakhstan and one of the top 10 producers worldwide. ENRC – a diversified natural resources group – has a presence in China, Russia, Brazil and Africa, as well as in Kazakhstan. This year has already seen significant changes for Samruk-Kazyna. On April 12, Timur Kulibayev was promoted to chairman as part of the post-elections reshuffle. Kulibayev, the son-in-law of Kazakh president Nursultan Nazarbayev, was previously the company’s deputy chairman.

The fund’s main task this year will be to carry out the ‘People’s IPO’ program, under which shares in companies that are wholly or partly owned by Samruk-Kazyna will be offered at a discount to retail investors and pension funds. In addition to raising funds for expansion, the program is also intended to stimulate the domestic capital market.

At least some of the IPOs are due to take place by the end of this year. Companies expected to be part of the first wave of IPOs include power-generation company Samruk-Energo, electricity grid operator Kegoc, postal service Kazpost and KazMunaiGas Exploration and Production. In the following two years, IPOs of other companies – including Kazatomprom, National Company KazMunaiGas, and railway operator Kazakhstan Temir Zholy – are planned.

SOURCE: Invest in Kazakhstan, 2011, p. 45-46

“People’s IPO” to create wealth, bolster capital markets 0

Posted on October 31, 2011 by Alex

The dual goal of the planned “people’s IPO” program is to create a wealth creation conduit for the Kazakh population and  to  bolster  the  development of domestic capital markets, Marcia Favale-Tarter, an investment banker and advisor to Kazakhstan’s Prime Minister Karim Masimov, told Bloomberg on the sidelines of the Kazakhstan Business Forum in London last week.

The “people’s IPO,” a privatization program in which the Kazakh government will sell stakes in some of the country’s largest companies to domestic investors, will help create an investment culture among the Kazakh population, improve corporate governance, and bolster the development of the country’s investment infrastructure, according to Favale-Tarter. Air Astana, KEGOC, and KazTransOil will headline the offerings, but “all companies underare being evaluated.”

SOURCE: SRI, Kazakhstan Daily News Brief, dated 24 October, 2011, available at http://silkroadintelligencer.com/wp-content/files/srikznewsbrief_oct24_2011.pdf

Masimov meets Citigroup Deputy Chairman to discuss “people’s IPO” 0

Posted on October 13, 2011 by Alex

Kazakhstan’s Prime Minister Karim Masimov met on Tuesday with Carlos Gutierrez, Vice Chairman of the Institutional Clients Group at Citigroup.  Citigroup currently advises the Kazakh government on the people’s IPO” program, a partial privatization  that  would offer stakes in large state-owned companies to domestic investors.  Citigroup  and other global investment banks  are vying to land lucrative advisory mandates  for the planned deals.  According to reports, the government is currently looking for an international bank advisor for the IPO of KEGOC, the national electricity grid operator, which is expected to headline the program.  Halyk Finance has reportedly already been appointed as a domestic advisor on the deal.

SOURCE: SRI, Kazakhstan Daily News Brief, Issue dated October 12, 2011

Public servants in Kazakhstan allowed participation in People’s IPO 0

Posted on September 06, 2011 by Alex

Trend, September 2011

There will be no collision of interests if public servants in Kazakhstan purchase shares of national companies to be floated within the People’s IPO, Kazakh Finance Minister Bolat Zhamishev said, Tengri News reported referring to Novosti-Kazakhstan.

Initial Public Offerings known as People’s IPO will be launched till the end of 2011 under the instruction of President Nursultan Nazarbayev. The program will enable citizens to purchase shares of the largest Kazakh national companies, giving them a new tool for investments and savings.

Initially public servants were prohibited to participate, but the ban has been lifted recently to stimulate the inactive Kazakh stock market.

“There will be no conflict of interest, as the shares will be offered to general public”, Minister Zhamishev told journalists on Friday.

The first wave of People’s IPO, which includes KEGOC national power grid operator and AirAstana airline, will be run in Q2-3, 2012. The second wave with shares of KazTransGas, KazMorTransFlot and Samruk-Energo is planned to be launched in 2013. And the third wave with KazakhtanTemirZholy National Railways Operator and KazTemirTrans will start in 2014-2015.

SOURCE: http://www.kazakhembus.com/index.php?mact=News,cntnt01,detail,0&cntnt01articleid=771&cntnt01origid=15&cntnt01returnid=201

Kazakhstan Daily News Roundup – June 30, 2011 0

Posted on June 29, 2011 by KazCham

Kazakhstan Daily News Roundup – May 31, 2011 0

Posted on May 30, 2011 by KazCham

ANALYSIS:

Grigoriy Marchenko – Chairman of the National Bank
(SRI) – The nomination of Kazakhstan’s central bank chairman Grigoriy Marchenko to head the International Monetary Fund (IMF) has brought well deserved international recognition to Kazakhstan’s top banker.

Sberbank outlines conditions for BTA deal – Gref
(SRI) – Russia’s Sberbank has outlined the conditions under which it would be willing to acquire Kazakhstan’s BTA Bank, Sberbank’s head German Gref told the Russian business daily Kommersant.

Almaty metro nears end of line
(bne) – Almaty’s metro has become known locally as the “golden metro” because of the amount of money sunk into the project over the last two decades. After many false starts, trains are now being tested, and the latest date for its opening is December 2011.

ENERGY:

On the move: KEGOC
(SRI) – Bakytzhan Kazhiev has been appointed the new head of Kazakhstan Electricity Grid Operating Company (KEGOC), the national transmission grid operator.

Kazakhstan to keep cap tariffs for power stations after 2015 (Interfax)

BUSINESS AND ECONOMY:

BTA Bank’s bad loans may top original estimate – advisor
(Bloomberg) – BTA Bank, Kazakhstan’s biggest lender before its nationalization and default two years ago, may have underestimated its bad-loan total and may require more government aid or risks being broken up.

Indicators – May 30, 2011 (Reuters)

POLITICS:

Kazakh President’s family feud spills over into Washington (New York Times)

SOCIETY:

Hundreds of rare antelopes die in Kazakhstan (AFP)

 

Kazakhstan Daily News Roundup – March 1, 2011 0

Posted on March 01, 2011 by KazCham

SOURCE: SilkRoadIntelligencer.com

ENERGY:

Uzbekistan stealing electricity from Kazakh grid – KEGOC (SRI)

BUSINESS AND ECONOMY:

Kazakh central bank abandons trading corridor, moves to managed float
(SRI) – The National Bank of Kazakhstan has returned the tenge currency to a managed float on Monday, abandoning the trading corridor it had introduced in 2009 in response to a sharp devaluation.

Kazakhstan to draw list of companies for “people’s IPO” in two weeks (SRI)

Antonov examining proposal to assembly Russian-Ukrainian An-140 in Kazakhstan (Interfax)

National Bank of Kazakhstan: Exchange rates March 1, 2011 (Kazakhstan Today)

Indicators – February 28, 2011 (Reuters)

MINERAL RESOURCES:

ENRC to commission $50-million extra production line in April (Interfax)

Frontier Mining gets second $4 million loan tranche from HSBC (Proactive Investors)

POLITICS:

Nazarbayev posters off (AP – Moscow Times)

Kazakhstan Daily News Roundup – February 24, 2011 0

Posted on February 24, 2011 by KazCham

ENERGY:

KEGOC awards $100-million substation rehabilitation order to Hyundai, Korea Electric (SRI)

CNPC, KazMunaiGas in deal to tap Urikhtau gas field (Reuters)

BUSINESS AND ECONOMY:

Banking sector loses $22 million in January – regulator
(SRI) – Kazakhstan’s banking sector posted a cumulative net loss of KZT3.3 billion ($22 million) in January, driven by losses posted by BTA Bank and Alliance Bank, according to a monthly report published by the Kazakh Financial Supervision Agency (FSA).

Kazakh president energized after China trip
(RFE/RL) – Kazakh President Nursultan Nazarbaev has wrapped up a visit to China and is heading home with lucrative contracts to supply China with energy resources and promises of some $7 billion in Chinese loans for projects in Kazakhstan.

Kazakhstan and China to set up a $1-billion joint investment fund (SRI)

Kazakhstan’s BTA Bank reports loss in January – regulator (Bloomberg)

Kazakh MPs bow to president, boost social spending (Reuters)

National Bank of Kazakhstan: Exchange rates February 24, 2011 (Kazakhstan Today)

Indicators – February 23, 2011 (Reuters)

METALS AND MINING:

ENRC to get part of $2-billion Chinese loan to Kazakhstan fund (Bloomberg)

Friedland’s Kazakh JV announces 50% gold resource increase (Mineweb)

REGIONAL:

Azerbaijan plans to reduce investment spending 17% this year (Bloomberg)

Uzbekistan warns over ‘evil, satanic’ rock music (AFP)

SOURCE: http://silkroadintelligencer.com/2011/02/24/kazakhstan-daily-news-roundup-february-24-2011/



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