China helps bridge Russia’s investment gap

Chris Wright
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Joint investment fund undertakes new deals; Kazakhstan’s nationalized bank sell-offs set to go.

If true, this would be a big step: the rehabilitation of Kazakhstan’s banking sector has been painful and sometimes embarrassing, particularly the alleged theft of $6 billion of BTA assets by Mukhtar Ablyazov, whose exploits have been covered at length by Euromoney.

But even this will be only a relatively small part of Samruk’s overall task. The fund holds assets in almost 600 Kazakhstan companies, in an arrangement that mirrors that of Malaysia’s Khazanah; rather than investing, its priority is more to restructure companies and divest them back to the market.

In May president Nursultan Nazaerbayev said that over 100 Kazakh institutions would be readied for privatization, including the main railway and oil and gas companies, or their subsidiaries.

Bakhmutova says the next to be sold will be Kegov, the electricity grid company, with an IPO to happen by December. Sales will be a mixture of auctions and local and international IPOs. "Our benchmarks are Temasek and Khazanah," she says.