business and economy

Kazakhstan mulling restrictions on foreign listing

By SRI ⋅ January 26, 2011 ⋅  Email This Post ⋅  Print This Post ⋅ Post a comment

(SRI) - Kazakhstan’s financial regulator plans to oblige local companies seeking a listing abroad to float some of their stock on the domestic market or face sanctions if they do not comply with the requirement.

“We propose setting an obligatory requirement […] to float a certain amount of shares on the domestic bourse for those issuers that are listed or intend to be listed on foreign exchanges,” Yelena Bakhmutova, head of the Financial Supervision Agency (FSA), told a government meeting.

Companies that ignored such a requirement would face sanctions, Bakhmutova said. She did not say when such measures could be introduced.

Kazakhstan could also “amend the tax code to stimulate issuers for floating securities on the domestic market,” Bakhmutova added.

Despite the government’s efforts, Kazakhstan’s domestic stock market remains undeveloped and illiquid. Kazakhstan’s largest companies have traditionally preferred to list their shares on the London Stock Exchange. Today, Kazakhstan’s largest copper miner Kazakhmys said it would list conduct an Initial Public Offering (IPO) on the Hong Kong Stock Exchange.

Last year, the Kazakhstan Stock Exchange (KASE) said it would lobby the government to restrict the placement of issues outside Kazakhstan, claiming that the development of Kazakh financial markets would be impossible without this step.

Tags: IPO, KASE

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