Kazakhstan Pushing Ahead With Share Sale, Economy Minister Says

Kazakhstan, Central Asia’s biggest energy producer, is pushing ahead with plans to sell shares to citizens in initial public offerings, even with the current global market turmoil, Economic Development and Trade Minister Kairat Kelimbetov said.

The first companies to be included in the operation will be AO Kaztransoil and AO Kazakhstan Electricity Grid Operating Co., known as Kegok, Kelimbetov said in a Sept. 16 interview in the Ukrainian city of Yalta. Citizens will be able to resell shares on the secondary market with no restrictions, he said.

“We will offer around 10 percent of the shares of each company,” he said. “They are infrastructure companies which do not depend much on the world’s market fluctuations.”

Kelimbetov said that the first wave of sales will involve six or seven companies starting in the second quarter of next year, and “if there is no major bad news, we think IPOs for big companies such as AO KazMunaiGaz National Co. and nuclear company AO NAK Kazatomprom could begin from 2015.” Kazakhstan holds about 3 percent of the world’s oil reserves.

The government targets an inflation rate between 6 percent and 8 percent this year and next year, he said, down from 9 percent in August. He didn’t speficy which policies the government would implement to help slow price growth.

Even with the ministry raising its average crude oil price estimate to $90 from $65, the national currency, the tenge, won’t “seriously strengthen,” Kelimbetov said. “It will be within the corridor set up by the central bank. We put that assumption into our budget for next year.”

State Budget

The Kazakh 2012 state budget assumes an average oil price of $80 next year and $70 in 2013 and 2014, Kelimbetov said.

Kazakhstan returned to a managed free float of the tenge by abolishing its trading corridor on Feb. 28 to allow the currency to appreciate, taming import prices. The tenge has risen 0.18 percent versus the dollar this year, Bloomberg data shows.

Assets at the nation’s oil fund have risen to $40 billion, Kelimbetov said.

Kazakhstan supports setting up a grain pool with Ukraine and Russia for exporting cereals, Kelimbetov said.

To contact the reporters on this story: Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net; Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net