Kazakhstan builds its local markets

A SUPPLEMENT TO EUROMONEY/APRIL 1998: EASTERN EUROPE

After a couple of false starts, Kazakhstan should this year float five top industrial companies in a bid to become the second former-Soviet country to attract large-scale portfolio investment to its stock market.

So far, only Russia has attracted equity investment from global emerging-market and other mainstream funds. Although the hedge funds and some dedicated investors have ventured into other countries of the Commonwealth of Independent States (CIS), including Ukraine and Moldova, there has been little for them to buy there apart from treasury bills. In any case, slow reform and industrial stagnation places a limit on their interest.

Kazakhstan's approach to the equity markets is radically different to that of any other CIS country, including Russia. Elsewhere, stock markets have emerged spontaneously after voucher privatization, with a market infrastructure emerging only later.

But the Kazakh government wants to have a modern...