16 October 2017, Hong Kong. The top management of Samruk-Kazyna JSC (“the Fund”) has presented the investment opportunities in Kazakhstan and the investment case of the Fund’s portfolio companies at Kazakhstan Investor Day in Hong Kong. Event participants included: Timur Suleimenov, Minister of the National Economy of Kazakhstan; Shakhrat Nuryshev, Ambassador of Kazakhstan to the People's Republic of China; and Nurlan Kussainov, CEO of Astana International Financial Centre.
As the operator of a large number of state assets, the Fund plays an active role in Kazakhstan’s privatisation programme and plans to sell more than 200 assets from different sectors. At the Hong Kong Investor Day, potential investors from the Asia-Pacific region had the opportunity to familiarise themselves with the companies that are lined up for privatisation, including NAC Kazatomprom JSC, Air Astana JSC and Kazakhtelecom JSC. Event attendees also had an opportunity to hear about the potential cooperation opportunities with companies such as Samruk-Energy JSC, Kazpost JSC, NC Kazakhstan Temir Zholy JSC, Tau-Ken Samruk JSC, United Chemical Company LLP and NMSC Kazmortransflot LLP.
Timur Suleimenov, Minister of the National Economy of Kazakhstan, said:
“Within the global rankings of the World Bank-International Finance Corporation's Doing Business 2017 report, our country is ranked in 35th place in terms of the ease of doing business, and in 3rd place in the “Protecting Minority Investors” category. The stable inflow of foreign investment is an indication of the increased level of interest from international investors towards Kazakhstan. As a result, over the past 10 years, the net inflow of foreign investment into Kazakhstan’s economy has amounted to more than USD 200 billion; only in 2016, the volume of investments exceeded USD 14 billion."
The Fund’s management team presented the development strategy for Samruk-Kazyna’s portfolio companies and the Fund’s new approach to managing its assets.
Umirzak Shukeyev, CEO, Samruk-Kazyna, highlighted in his speech:
“Over the past few years, we have done tremendous work to transform and optimise the activities of our portfolio companies. The role of the Fund itself has changed – we have shifted from operational holding to the model of strategic holding and active investor, by interacting with our portfolio companies through boards of directors whose composition has been significantly strengthened. Our role is to create national champions with world-class standards of management, efficiency and corporate governance, and ensure implementation of Transformation program initiatives with the core purpose of increasing shareholder value. To date, the Fund has demonstrated world-class returns on equity, in line with leading sovereign wealth funds, and in the first quarter of 2017, the Fund received 10 out of 10 points in the SWFI’s Linaburg-Maduell Transparency Index.”
Transformative value-creation strategy, which is being implemented in the Fund now, combines a clear decisive portfolio strategy and an active portfolio management.
The Fund is on the next wave of implementing further market reforms and attracting foreign investments and strategic partners into key sectors.
Nurlan Rakhmetov, Managing Director for Government Relations of Samruk-Kazyna JSC, stressed the importance of privatisation for the implementation of the Fund’s strategic objectives, and also noted the efforts of the Fund’s management to ensure transparency of this process.
Nurlan Rakhmetov, Managing Director for Government Relations of Samruk-Kazyna JSC, commented:
“Privatisation is one of the key tools for the implementation of the Fund's strategy. Some of our companies, such as Kazakhtelecom, already have investors. We intend to attract investors for the other companies and plan to use the funds raised to develop new projects and industries. In the near future we are considering listing three of our nine largest assets: Kazakhtelecom JSC, Air Astana JSC, NAC Kazatomprom JSC. We plan to attract strategic investors for a number of companies including Samruk-Energy JSC, Kazpost JSC, NC Kazakhstan Temir Zholy JSC, Tau-Ken Samruk JSC. I would like to underline that we strictly adhere to international corporate governance standards, paying great attention to ensuring the transparency of the privatisation process and protecting the rights of minority investors.”
At present, Kazakhstan is one of the largest trading partners of China in the region. Since 1993, the volume of foreign direct investment from China to Kazakhstan has amounted to more than USD 40 billion. As a result of the construction and implementation of the ‘Western Europe - Western China’ international transit corridor, approximately 8% of the freight flows between China and Europe will run through Kazakhstan by 2020.
Barry Chan, Managing Director and Head of Investment Banking, China International Capital Corporation, Hong Kong, noted:
“Kazakhstan government outlined a concrete privatisation plan. Kazakh companies are benefiting from its competitive advantages along the Belt and Road and proximity to China. And certain multilateral organization and capital market stakeholders including the Hong Kong regulators are paving the way to facilitate investments among the belt and road countries”.As part of Kazakhstan Investor Day in Hong Kong, the Fund’s representatives held a number of meetings with potential investors.