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Two commodities firms controlled by the same Kazakhstan oil and mining tycoon have applied for listings in Hong Kong, boosting the stock exchange's bid to diversify away from Chinese issuers.
Kazakh Steel and MM Petroleum, both controlled 73-year old metals magnate Kanat Assaubayev, filed their preliminary prospectuses in April and June respectively for their initial public offerings (IPOs).
They are among a tiny handful of foreign companies that have sought to raise funds on the city's bourse this year.
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One of the most powerful families in Kazakhstan, the Assaubayevs used to own KazakhGold, the country's largest gold mining company. They sold it a decade ago.
The listing plans come at a time when exports from neighbouring Russia have been drastically reduced amid sanctions imposed by the US and some European countries in response to its invasion of Ukraine.
Metals tycoon Kanat Assaubayev. Photo: SCMP Pictures alt=Metals tycoon Kanat Assaubayev. Photo: SCMP Pictures>
If successful, the two companies will become just the second and third non-Chinese issuers to list in Hong Kong in 2022, helping to push forward Hong Kong Exchanges & Clearing's goal to diversify new listing business.
Chinese issuers accounted for as much as 90 per cent of the funds raised in the first half of the year. In February, Italian yacht maker Ferretti raised HK$2 billion (US$250 million), becoming the first company from Italy to list in the city for 12 years.
"The shortage in oil supply due to output reduction from Russia should benefit any players who have already built pipelines connecting to other countries," said Kirk Wong, global market and FX strategist at Everbright Securities in Hong Kong. Russia accounts for 11 per cent of the world's crude oil production.
With reserves of 30 billion barrels as of 2020, Kazakhstan has the world's 11th-largest crude oil reserves, accounting for around 1.9 per cent of the world's total, according to Frost & Sullivan.
MM Petroleum has the exclusive rights to 14 oilfields in the Atyrau region, located in the north of the Caspian Sea. Five of them are under construction, while the remainder are either in test-production or are at an early appraisal stage.
The company plans to use the proceeds to bring the seven oilfields currently under appraisal into full development in the next couple of years, and to build new pipelines, according to its draft prospectus.