IPO in Kazakhstan in 2024: What It Is and Why It Matters?

Since 2012, individuals and companies in Kazakhstan have had the opportunity to participate in the People’s IPO. The year 2024 is no exception, as new companies are entering the stock market, offering vast opportunities for both businesses and private investors.

IPO: What Is It in Simple Terms?

The abbreviation IPO stands for Initial Public Offering. The concept of an IPO is straightforward: companies that are listing their securities on the stock exchange for the first time offer shares to an unlimited number of investors.

An initial public offering benefits both parties. The business becomes public, which helps it gain visibility and scale up through investments. On the other hand, investors have the potential to earn returns on their investments.

How Can Investors Ensure that Buying Shares through the "People’s IPO" Program Carries Minimal Risk?

Firstly, only stable national companies with transparent financial reporting and high standards of corporate governance are listed on the stock exchange. All companies participating in the program are part of the National Welfare Fund "Samruk-Kazyna".

Secondly, the state is the primary shareholder, which minimizes market risks for other shareholders.

Thirdly, a key feature of public companies is that investors have access to their financial reports (these data are available on the stock exchange’s website). This is a significant advantage for investors with knowledge in economics and finance.

How Do You Make Money on an IPO?

Earning profits through the program is no different from earning on any other stock exchanges. You can generate income by:

1. Dividends: An investor buys IPO shares and keeps them in their investment portfolio. The company that issued these shares allocates a portion of its profits to the investor—usually, payments are made several times a year, but this depends on the company’s development plans, current market conditions, and other factors.
2. Price Fluctuations of Securities in the IPO: If the prices of IPO participating companies' shares rise, the securities can be sold to earn a profit from the difference. Many investors choose this method of earning, as the shares of companies participating in the program have shown steady growth. For example, in 2014, one share of KEGOC was priced at 505 tenge, and by 2024, its price had risen to 1,440 tenge. Kazakhstan has favorable tax legislation concerning locally actively traded companies— the tax on income from the sale of shares is 0%.

Companies That Have Gone Public Through an IPO

Examples of companies that have gone public through an IPO are impressive, as their businesses demonstrate significant growth in share value. For example, the market capitalization of the oil and gas company JSC NC "KazMunayGas" (2022) exceeded 5.1 trillion tenge. The maximum increase in the value of securities of the nuclear company KAZATOMPROM (2018) reached 383%, and the operator of electrical networks KEGOC (2014) saw a 281% increase. The pipeline company KazTransOil (2012) experienced a 121% growth.

Moreover, the IPO share prices are quite affordable. For instance, in 2022, KazMunayGas offered its securities at 8,406 tenge each. This allows people with different income levels to enter the investment market.

The 2023–2024 ICO includes the participation of the railway operator "Kazakhstan Temir Zholy." In 2024, the airline Air Astana will offer its shares to shareholders, and in 2025, the National Gas Company QazaqGaz is scheduled to go public through an IPO.

The date of the next IPO in Kazakhstan in 2024 is tentatively planned for the first quarter.

Detailed information about the companies participating in the 2024 IPO program and the trading dates can be found on the Samruk-Kazyna Fund website, as well as on the stock exchange websites kase.kz and aix.kz.

What Are the Requirements for Participating in an IPO?

Any Kazakh citizen over the age of 18 can become an investor. Tax residents of Kazakhstan are also eligible to participate in the program. To buy and sell shares, you need to open a brokerage account and fund it. Then, you need to select the shares of the company you are interested in and submit an application to participate in the program.

It is convenient to work with securities through banking applications— for example, the "Investments" section is available in the Bank CenterCredit BCC.KZ app. You just need to select a company and click "Submit Application".

Of course, an IPO, like any other type of investment, carries risks. Therefore, experts recommend following golden rules for those who decide to invest. First, diversify your investments across different companies. Second, avoid investing large sums in the shares of a single company. Third, at the beginning of your investment journey, allocate only a small portion of your capital for investment.

This article has been translated from its original language using neural network-based translation technology.