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. Last Updated: 07/27/2016

Kazakhs Prepare Market

ALMATY, Kazakhstan -- Plans to launch a stock market in Kazakhstan this month are being closely watched by international investors eager to put hundreds of millions of dollars into its shares, a senior official said.

"The first stock transactions will be in September," Grigory Marchenko, National Securities Commission head, said this weekend. "As for the interest of foreign investors, we are happy with it."

The government of the former Soviet republic, with a territory five times the size of France but populated by just 16.7 million people, has designated 13 large companies whose shares will be traded on the stock exchange first.

Resource-rich Kazakhstan has already managed to attract over $3.5 billion of direct foreign investment to its key economic sectors, mostly in oil, gas and energy.

But officials now hope portfolio investors will quickly boost this figure by hundreds of millions of dollars invested in the new national stock market.

The government intends to sell large stakes in companies through foreign banks to portfolio investors, who will then trade them on the new market.

The government will this month select one bank or investment company for each company in which shares are to be sold to handle the initial sale of these stakes to large portfolio investors.

The prime minister said Monday investor interest showed the former Soviet republic to be a truly emerging market.

"The arrival of Japanese investors means we are now in a completely new state of economic development," Kazakhstan's reformist prime minister, Akezhan Kazhegeldin, told a delegation of Japanese officials and businessmen.

But investors say the remote region of mountain and steppeland the size of Western Europe faces a long haul before it can call itself an Asian tiger.

Japanese companies are hungry for Kazakh resources but have trailed cautiously behind North American investors. All foreign businessmen complain of red tape, hazy laws and corruption.

"If you ask any Japanese to point out Kazakhstan on a map, about one person in a hundred might be able to show you where it is," Aso Taro, the director of Japan's economic planning agency, admitted Monday.

"I think Kazakhstan is a very rich country with a lot of resources," Taro said, "but unfortunately there's no way out to international markets, no gas or oil pipelines."