Why do Kazakh companies want to list in Hong Kong?

Kazakhstan Temir Zholy (Kazakhstan Temir Zholy, abbreviated as KTZ) has officially filed a listing application with the Hong Kong Stock Exchange, with China International Capital Corporation (CICC) serving as the sole sponsor. The company, wholly owned by Kazakhstan’s sovereign wealth fund Samruk-Kazyna, plans to raise funds to build the 272-kilometer Bakhty-Ayagoz railway line, aiming to increase the cross-border freight transport capacity to China from about 50 million tons per year to 100 million tons. The question is: why would a Kazakh state-owned enterprise travel all the way to list in Hong Kong?

The answer is simple: because it’s a win-win deal.

Hong Kong is an ideal financing platform

KTZ’s capital needs are extremely large—building new rail lines, upgrading infrastructure, and repaying debt; each requires huge amounts of capital. Earlier this year, foreign media reported that Astana International Exchange (AIX), Kazakhstan’s domestic exchange, is still in the early stages of development (in 2025, the total market value of locally listed companies was $85 billion, ranking around 50th globally). Market depth and the scale of available funds are insufficient to support an IPO of this size. Earlier this year, foreign media estimated KTZ’s fundraising size at about $1 billion, with proceeds to be used for network expansion and potential debt reduction.

Hong Kong is entirely different. In the first quarter of 2026, the total amount of fundraising in Hong Kong’s equity capital markets reached $30.6 billion, maintaining the top spot globally as the center for new IPO financing. Hong Kong Exchanges and Clearing CEO Chen Yiting noted that more than 400 companies have already submitted listing applications, with the number of companies in queue at a “historically high level.” For infrastructure companies like KTZ that require large-scale financing, Hong Kong’s market depth is exactly what they need.

More importantly, Hong Kong has a mature common-law system and an internationally oriented regulatory framework that can connect smoothly with the legal framework of the Astana International Financial Centre (AIFC). In June this year, HKEX (00388) signed a memorandum of understanding with the AIFC Authority and AIX to promote dual listings of stocks and cross-border listings of debt securities. This institutional interconnectivity greatly lowers the threshold for Kazakh companies to list in Hong Kong.

As “the middle corridor” operator connecting key overland transport routes between China and Europe, KTZ naturally appeals to Chinese investors. Listing in Hong Kong means being able to directly access a large pool of capital interested in “Belt and Road” infrastructure projects.

Hong Kong earns financial service fees, while markets diversify—two-fold gains

The value of KTZ’s listing to Hong Kong’s financial industry is also obvious. With CICC acting as the sole sponsor, it will directly receive substantial sponsorship fees. The entire listing ecosystem—including law firms, accounting firms, underwriters, and others—will all benefit. Beyond immediate service fee revenue, it is also a showcase of Hong Kong’s capability to serve as an international financial center.

From a more macro perspective, the KTZ case is significant as a benchmark. Kazakhstan is actively promoting the privatization of state-owned enterprises across multiple sectors, including oil, telecommunications, and mining. If KTZ’s listing goes smoothly, it will open doors for more Kazakh and even Central Asian companies to seek financing in Hong Kong.

On a deeper level, this is a strategic financial linkage. Last month, Chief Executive Li Jiachao led a delegation to visit Kazakhstan, during which the two sides signed 96 cooperation agreements. One of them was a memorandum signed with Samruk-Kazyna, aiming to use Hong Kong’s financial expertise to assist Kazakhstan’s state-owned enterprise privatization. Hong Kong’s “international financial center” status will be further strengthened.

In summary, listing in Hong Kong benefits both Kazakhstan enterprises and HKEX and, by extension, the Hong Kong economy—mutual gains with no downside. Kazakhstan gets an international capital platform that can meet its huge financing needs; Hong Kong gains further consolidation of service fee income, market diversification, and its position as an international financial center. After KTZ, more Kazakh state-owned enterprises are expected to follow.