Directors’ dealings Kazakh style | FT Alphaville

Directors’ dealings Kazakh style

That’s Vladimir Kim.

He’s the chairman of Kazakhmys, the London-listed Kazakhstani copper producer.

And he’s just sold an enormous chunk of stock.

From the RNS on Tuesday morning:

Kazakhmys PLC (the “Company” or “Kazakhmys”) announces that its Chairman, Vladimir Kim, has sold an interest in 58,876,793 ordinary 20p shares (representing approximately 11% of the shares in issue). The transaction was executed on the Kazakhstan Stock Exchange at 3,363 KZT per share, based on a closing mid-market share price of 1,423 pence per share, as derived from the Official List of the London Stock Exchange, on 4 October 2010.

The shares were purchased by National Welfare Fund Samruk-Kazyna JSC (“Samruk-Kazyna”). Mr Kim’s interest in the Company is now 149,306,795 ordinary shares (representing 27.9% of the shares in issue). The interest of the Government of Kazakhstan has increased to 139,162,843 ordinary shares (representing 26.0% of the shares in issue), including The State Property & Privatisation Committee’s* existing 15.0% interest.

Yep, Mr Kim has pocketed a cool £833m from the disposal, which comes with the standard explanation for a director share sale — ‘portfolio diversification.’

Whether that bothers shareholders remains to be seen — although Mr Kim has said he might sell a further 21m shares if Kazakhmys decides to list on the Hong Kong stock exchange. (They might also wonder how Mr Kim managed to sell that much stock at bang on Monday’s closing price. No discount here).

However, they might be concerned at what looks like creeping government control of a FTSE 100 company.

Indeed, that fact has not been lost on analysts who are already flagging concerns to their clients.

Here’s Citigroup’s take on the sale:

The other potential implication of this move is an increase in the Kazakh government’s influence on the direction of the company’s strategy and potentially a higher level of social spending in the country from KAZ, while on another note we are now very unlikely to see any risky forays into highrisk regions like the DRC.

So no more African adventures. That’s some consolation we suppose, but not much.

Shares in Kazakhmys are down 36p at £18.97 in early trading:

And looking at that chart Mr Kim would look to have timed his sale rather well. In fact that sale price is 240 per cent above the 2005 IPO price.

Update: 8:55am (BST). More comment this time from Liberum:

With the stock up 32% since the 25th of August and at its highest level since April we think the market will see two negatives from the announcement 1) the state’s increasing control of the business and 2) Mr Kim being a seller at current levels. As a result we expect profit taking in the near-term but see no change to the underlying investment case. Kazakhmys is a business that operates under a close relationship with the state as evidenced by its investment in the power grid (a 50/50 JV with Samruk) and its significant social spending initiatives including the construction of a library at a cost of $100m and continuing capital expense towards various other recreational and health facilities