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Uzbekistan is to introduce an initiative to reward employees with shares in companies, under a regulation developed by The National Agency for Perspective Projects (NAPP). According to the NAPP, the transfer of shares to employees, as part of additional incentive programs, including bonuses, will help increase employee interest in the company's sustainable development and improve labor relations. The main goal of the initiative, modelled on ESOP (Employee Stock Ownership Plan) successfully applied in other countries, is to improve the population's welfare and develop the domestic capital market. Although joining in the Stock Ownership Plan will be voluntary, its development will be mandatory for joint stock companies with more than 50% state participation. The presidential decree on capital market development, issued in September 2023, envisioned the implementation of ESOP. Funds of up to one month's salary used to purchase shares will not be subject to personal income tax.
Shares of Central Asia's largest airline Air Astana are now for sale to the public in London, with the company's global depositary receipts (GDRs) trading on the London Stock Exchange (LSE). The GDRs were priced for this month's IPO at $9.50 a piece last week when conditional dealings in began on the LSE and Kazakhstan's Astana International Exchange (AIX). Today, Air Astana's local shares trading on the Almaty's KASE bourse are up 6.1% to 1,241 tenge, whilst dollar-priced GDRs trading on Astana's AIX are down 1.1% to $10.08 at an intra-day volume of just under 30,000 GDRs. The LSE's largest IPO of 2024 to date is set to gauge the demand of frontier and emerging market equity investors for exposure to Central Asian stocks in the aftermath of Russia's 2022 attack on Ukraine. Companies like Air Astana, and notably its low-cost carrier unit Fly Arystan, have in some ways benefited from the disruptions caused by the war and its consequent matrix of international sanctions as people and goods are re-routed through Kazakhstan. Conversely, the threat of more instability in the region and the risks of higher inflation, fuel and operating costs will undoubtedly remain on the minds of potential investors. The IPO in London and Kazakhstan represents a meaningful step for the latter's sovereign wealth fund, Samruk Kazyna, which plans to continue putting the shares of state companies on public markets. According to one former IPO manager from a European bank who declined to be named as the IPO process was underway, Air Astana's offering is the "clearest test in the IPO market to date of investor belief in Kazakhstan’s continued economic development." He also noted that it's "positive to see that four of the nine directors are independent, with three of those independent directors being from outside Kazakhstan" in terms of corporate governance. Air Astana's results for the first nine months of 2023, which were published on December 12th, showed positive top-line growth in revenue, operating profit, and passenger-kilometers flown metrics versus 2022, though the carrier did see a 1% dip in EBITDAR margin (operating profit as a percentage of its revenue) to 28% which investors may focus on going forward.
