Kaz-Munay Gaz’s Initial Public Offering

Project

Topic: “People’s” IPO of Kaz Munay Gas

Course: Cases in Finance

Instructor: Razzaque H Bhatti

Student: Amireshov Talgat ID20071230

[e-mail]

Almaty, 2012

Introduction

In final project I decide to take KazMunayGas Join-Stock Company in Kazakhstan which is the one of the leading company in country.

Firstly, I explain what the program People’s IPO is and when this idea firstly was spoken and when it started.

Secondly I briefly describe company overview also mentioned KMG constructed after merger of EmbaMunayGas and UzenMunayGas

In project I analyze the company’s financial report mainly I make valuation on Discounted Cash Flow based on Annual reports focused on Consolidated Balance sheet and Income statement.

Further I valuate the Weighted Average Cost of Capital, then Discounted Cash Flow and at the result descried why in my calculation I have positive DCF.

At the end, I present corrective actions to improve DCF and conclude project with recommendation.

Kaz-Munay Gaz’s Initial Public Offering

February 14, 2011 Nursultan Nazarbayev at the 13th Congress of the Party "Nur Otan" in Astana on Friday instructed to provide accommodation to the public shares of state companies such as "Samruk-Energo", KEGOC, "Kazpost." In the next stage, in 2012-2013, put the stock market shares of National Company " KazMunayGas ", "Kazakhstan Temir Joly", "Kazatomprom".

As you know, the program "People's" IPO, in which planned to sell stakes in Kazakhstan's most attractive companies with state participation, the government implemented to encourage the further development of the stock market of the country and improve the financial literacy of the population.

In general, within the framework of the "people's IPO" is planned to implement the population and the pension fund from 5% to 15% of the shares of state companies.

The authorities expect that the demand for pre-fininstrumenty in the "people's" IPO among individuals and pension funds (NPF) is $ 300-500 million of them current demand on the part of the population is estimated at $ 100-200 million, the demand from pension funds state-owned shares - at $ 200-300 million.

It was reported that the program "People's IPO» in Kazakhstan will be implemented in several stages. The government expects the participation of not less than 160 thousand individuals, and all the savings fund of RK.

Identified candidates for the company's IPO: 1st tier - "KazTransOil», KEGOC, Air Astana, the 2nd tier - JSC "KazTransGas", JSC "KazMorTransFlot", "Samruk-Energo", 3rd - AO "Kazakhstan Temir Joly", JSC "Kaztemirtrans."

Among them is first-tier companies will be displayed in II-III quarters of 2012.

Second-tier companies will be displayed in 2013, third-tier companies - in 2014-2015. After the 2015 is supposed to consider the possibility of withdrawal of the IPO companies such as JSC " KazMunayGas " JSC and "Kazatomprom".

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