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Public IPO

10 questions about Public IPO in Kazakhstan

1. What is Public IPO?


IPO (Initial Public Offering) is an initial public offering of a share of certain company for sale. Whereas the word “initial” assumes that the company brings its shares out to the stock market for the first time.
The prefix “public” means that with this IPO the shares set out for sale are first offered to the population of the country where the issuing companies operate. As a rule, with the public IPO the enterprises where the government owns full or controlling stock of shares are brought for sale.

2. What are the reasons to carry out Public IPO?


There are several reasons to carry out Public IPO:
• shareholding in successful enterprises provides the citizens with the possibility for gaining profit from their development and growth. This occurs both at the stock price increase and at the cost of paying dividends;
• the public IPO helps develop the stock market. By providing the population with an opportunity to purchase shares of leading companies the government expands the circle of investors. The growing demand for shares leads to the growth of their liquidity which in turn has positive influence onto the stock market development;
• the funds raised during the Public IPO can be invested by the state companies in their future development, purchase of assets, modernization and production expansion.

3. What is the purpose of the public IPO?

• “The purpose of the public IPO in Kazakhstan is in the development of local stock market…” (Karim Massimov).
• “The purpose of the public IPO in Kazakhstan is the participation of people in the country’s economy growth” (Managing Director of JSC “Fund of national welfare “Samruk-Kazyna” Peter House).

4. Who implements the Program “Public IPO”?

The “Public IPO” program is developed and implemented by JSC “FNW “Samruk-Kazyna” and the Ministry of Economic development and trade of the Republic of Kazakhstan under instruction of the Republic of Kazakhstan President Nursultan Abishevich Nazarbaev.

5. What results are expected from the public IPO?

• “…the result of the initial placement of shares shall be the growth of economy from the share price scale. This shall influence the economy which is a strategically important step in the development of Kazakhstan” (Deputy Chairman of the Management Board on business development of the company “PricewaterhouseCoopers” Donald Almeida).
• The public IPO shall give impact to the further development of the stock market in the country, it shall allow to diversify and multiply the population’s savings, create culture of investing in stock market among the Kazakhstan citizens, as well as enhance the transparence and efficiency of the largest domestic companies.


6. How will the Kazakhstan citizens benefit from participation in public IPO?

“The public IPO shall provide thousands of ordinary Kazakhstan citizens with an opportunity to own shares in largest companies, as well as the new tool for investment and multiply their savings” (Nursultan Nazabaev).

7. Participants of the “Public IPO” program?

• JSC "FNW "Samruk-Kazyna" and Ministry of economic development and trade of the Republic of Kazakhstan – Program developer and organizer;
• The issuers are the Joint-Stock Companies whose shares shall be purchased by the Republic of Kazakhstan population and intended for participation in the Program by thorough selection.
• Investors are the citizens of the Republic of Kazakhstan provided with an exclusive right to buy shares at their location within the Program.
• JSC "Kazakhstan stock exchange" (KASE) – technical, technological and information support of the Program;
• Brokerage companies (including JSC “Seven Rivers Capital”) – providing the population with services on purchase of shares during the Program;
• JSC "Kazpost" - official transfer-agent of the Program. Over the post branches one can choose a broker, make a contract with him and submit an application to purchase the shares.

8. Schedule to bring the issuers to the Public IPO?

• 2012 – JSC "KazTransOil"

• 2013 – JSC "KEGOC", JSC "Air Astana", JSC "KazTransGas", JSC "Samruk-Energo", JSC "NMSK "Kaztransmorflot"

• 2014 – JSC "NC "Kazakhstantemirzholy", JSC "Kaztemirtrans"

• 2015 - JSC "Kazatomprom", JSC "KazMunaiGas".

9. Where can the information about the “Public IPO” Program be obtained?

• Free webinar on Public IPO carried out by the Academy of Regional financial center of Almaty (link: http://ipo.kudiyarov.net/);
• Web-site of public IPO http://www.halyk-ipo.kz/.

10. What does the Kazakhstan citizen (Investor) need to participate in the “Public IPO” Program?

• Select a Broker and intern in to Contract with such Broker on providing brokerage services on the stock market;
• Transfer funds onto the personal account into the Central Stock Depository which shall be opened by the Broker based on the Brokerage service Contract signed with Investor (bank details for funds transfer shall be provided by the Broker);
• Submit an application for the purchase of shares using Broker’s assistance.
 

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