Kazakhstan’s dinosaurs need to allow more competition
The Prime Minister, Bakytzhan Sagintayev, calls the nation’s state-owned firms “dinosaurs” and often speaks of the need to allow more competition. Accordingly, the markets expect a line-up of IPO (initial public offerings) of state-owned Kazakh firms, with KazAtomProm in the lead. Samruk-Kazyna, the Kazakh sovereign-wealth fund, is planning to sell shares in both of the firms as part of its privatization drive.
Privatization program; KazAtomProm in the lead
- KazAtomProm, the world’s largest uranium producer and the national operator of Kazakhstan for import and export of uranium (URA) and nuclear fuel. According to Baljeet Grewal, a director of Samruk-Kazyna, the company will float up to 25% of its shares in 2018.
- Air Astana, the principal airline and the flag carrier of the Republic of Kazakhstan. The BAE, a British firm, owns 49%. Currently, the IPO is slated for 2019-2020.
- KazMunayGas, the state-owned oil and gas giant, is expected to float shares in 2019-2020.
- Kazakhstan Temir Zholy, the national railway company of Kazakhstan, is slated to invite private sector investment in the future.
Ease of doing business
Given that the country’s ease of doing business ranking has improved significantly from 51st (2016) to 35th (2017), it shouldn’t be very difficult for this Central Asian (AAXJ) (VPL) nation to attract private sector participation.
Kazakhstan is putting more emphasis on developing a knowledge-based diversified economy driven by the private sector. Hence, privatizations and diversification serve as the two broad pillars of this frontier market’s (FM) (FRN) reform agenda. We’ve discussed the privatization program that the economy is looking to embark upon. Now, let’s understand the sectors that stand to benefit from diversification initiatives in the economy.