Kazakhstan's largest telecom operator Kazakhtelecom may become the first of three large state-run companies to make an IPO in 2018, Reuters reported on October 16, citing Dauren Tasmagambetov, head of asset restructuring and privatisation at Samruk Kazyna sovereign wealth fund.

The statement reiterates Kazakhstan’s previously announced plans, but this time adds Kazakhtelecom to the list of companies earmarked for an IPO in 2018. It also includes Air Astana and Kazatomprom, which have assigned investment banks and legal advisers and are undergoing due diligence checks. Tasmagambetov has previously said that the launching of the IPOs will be conditional on macroeconomic conditions and market demand.

Kazakhstan’s $67bn sovereign wealth fund pitched its eight largest companies to Chinese investors and investment banks in a Hong Kong forum, the report said. The stakes planned for sale range from 26% in Kazakhtelecom to 100% in smaller state-run companies. Kazakhtelecom is 51%-owned by Samruk Kazyna.

Samruk-Kazyna chairman Umirzak Shukeyev has stated that Kazakhstan has completed the privatisation of 60% of companies belonging to the fund under the country’s privatisation programme. The fund has sold 215 small and medium-sized companies since the launch of its privatisation drive and is now preparing larger firms for IPOs.

The government, which has contended with a plunge in revenues from oil, has previously said it plans to sell stakes of at least 25% in 45 large state-owned companies, including seven IPOs - Tasmagambetov, however, said the stakes will be no more than 25%.

"It's not decided yet who will go first, because the preparation procedures, like due diligence, have just started in Air Astana and Kazatomprom," Tasmagambetov said. "For Kazakhtelecom, we know the situation better. At this point we see they're more ready than others."

The companies will possibly list in Hong Kong, London or Singapore.

"Considering the geographical position of Kazakhstan, we definitely see that the goals of our privatisation program fully coincide with the goals of [China’s] Belt and Road program," Tasmagambetov said. "Therefore we're ready to offer a number of assets which could be potentially of interest to Chinese investors."

The IPOs were originally set to launch in 2017, but the fund has continuously postponed its goals or has been unclear about its future deadlines.

The Astana stock exchange, set to launch in January next year, hopes to attract investors via the planned IPOs of Air Astana and Kazatomprom as well as Astana International Financial Centre (AIFC). The bourse is aiming to attract most of the major flotations planned under Kazakhstan’s privatisation programme.

The authorities expect the privatisation programme to yield between $4bn and $7bn by the end of the drive, where the IPOs alone would account for $3.5bn-$5.5bn.

Most of the privatisation programme is expected to be completed by 2018, excluding some of the IPOs, which might get pushed into 2019 or 2020.