Kazakh Privatisation Drive Shapes Up As A Hard Sell

Kazakhstan’s president certainly caught the imagination of the City of London. In closed-door meetings last week, Nursultan Nazarbayev and other Kazakh officials said the commodity-rich central Asian nation would unload hundreds of companies, including its industrial crown jewels, in the most ambitious privatisation drive since its independence from the Soviet Union, the Financial Times reported. But while some bankers are rushing to book tickets to Astana in hopes of securing advisory contracts, many observers are sceptical — including executives at some of the very companies slated for privatisation. “It’s an empty balloon,” said one senior executive. Previous Kazakh attempts at privatisations have stuttered, with a programme of “people’s IPOs” floating 10 per cent stakes in just two companies since 2012. Many state companies in Kazakhstan are burdened with hefty social obligations and investment needs. And Astana has in the past unnerved foreign investors by rewriting laws and contracts to its own benefit. Read more. (Subscription required.)