Author Archives: admin

Georgia’s CBank maintains rates

DEC. 14 2016 (The Conway Bulletin) — Georgia’s Central Bank slowed its interest rate cuts by keeping its key rate steady at 6.5% at its latest rate fixing meeting. It said that an increase in excise taxes and external factors would help lift prices temporarily although, there- after, price pressure will return. Inflation in Georgia stands at 0.2%, far below the Central Bank’s 5% target. It has cut its key interest rate from 8% at the start of the year.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

EBRD gives loan to Armenian bank

DEC. 15 2016 (The Conway Bulletin) — The EBRD sent a $10m loan to Ameriabank, Armenia’s largest bank by assets, to promote credit to women-led small and medium enterprises. The EBRD also sent a $3b loan to ACBA-Credit Agricole Bank, one of the largest lenders to Armenia’s agriculture sector. The loan is part of the EBRD’s Women in Business programme, which includes Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f

Tajik President flies to India for 5-day visit

DEC. 16 2016 (The Conway Bulletin) — >> Why is Tajik president Emomali Rakhmon in India? Is this just another meet and greet trip or something more significant?

>> It’s a five day trip starting on Dec. 14, so the length gives away some of the importance. He’s timed it nicely if he wanted to watch the final cricket test match between India and England down in Chennai, but I don’t think that’s why he’s there. Instead Rakhmon and Indian PM Narendra Modi will hold talks aimed at boosting bilateral relations. For India, Tajikistan has been groomed to be something of a springboard into Central Asia. For Tajikistan, India is a potential major investor.

>> I can understand why Tajikistan wants India as an investor, it must need a counterbalance to China’s growing influence and also to Russia, but why does India need to be in Central Asia?

>> India has been late getting in on the act in Central Asia. Whereas China, its great Asian rival, has developed now fairly substantial political and business ties, India has appeared flat-footed. Central Asia is an energy and mineral rich region virtually on its door- step but India simply hasn’t been able to develop any major footholds. Take the energy sector. India needs more energy supplies, so this is important to Delhi. When ConocoPhillips wanted to sell its 8.4% stake in the Kashagan oil project in the Kazakh sector of the Caspian Sea in 2012, it negotiated a deal with India’s state-owned ONGC. This was to be ONGC’s chance to buy into one of the most highly prized pieces of energy real estate in the world. It didn’t work out, though, as Kazakhstan exercised an option that it had on the field and pushed the stake towards China. China’s CNPC ended up buying it for $5b in 2013. India was left looking impotent.

>> That’s certainly a major snub, especially if India has already agreed the deal. What has India done since then to get back into the Central Asian region?

>> It’s been busy. Modi toured all five Central Asian states in 2015. It was a whirlwind tour to each of the region’s capitals and was generally considered a diplomatic success. And India has develop some major projects since losing out on the Kashagan stake. The biggest of these is the TAPI gas pipeline running from Turkmenistan, across Afghanistan to Pakistan and India. It’s an ambitious multi-billion-dollar project that will change the dynamic of the region. Suddenly a major infrastructure project is flowing north-south rather than west-east.

>> So where does Tajikistan fit into all this?

>> India’s interest in Tajikistan is more strategic than obviously economic. In 2003, India upgraded the Ayni airbase outside Dushanbe. The theory was, back then, than it was going to station its air force at the airbase but this never came about. When Modi was in Tajikistan last year he visited the base but no deals were agreed, at least publicly. Earlier this year, the members of the influential China and Russia led Shanghai Cooperation Organisation voted in India and Pakistan as members. Tajikistan has been an important ally for India in helping it secure this.

>> Right. What else is likely to come out of Rakhmon’s visit to India this week?

>> It’s difficult to say for sure. This is Rakhmon’s sixth trip to India but his first since 2012. Indian media have speculated that there will be an upgrade of Indian-Tajik relations and that there could be some movement over the Ayni airbase but a pre-visit statement from the Indian ministry for external affairs was tight-lipped.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Georgia Global Utilities issues 30m lari bond

TBILISI, DEC. 12 2016 (The Conway Bulletin) — Georgia Global Utilities (GGU), a subsidiary of London-listed BGEO Group, issued a 30m lari ($12m) bond, giving investors the chance to take a punt on the lari.

The bond, destined to GGU’s subsidiary Georgian Water and Power, offers a 3.5% premium over the Central Bank’s lari refinancing rate and will mature in five years.

The lari has slid by 15% in the past three months against the US dollar and is now trading at 2.66/$1. This prompted the Central Bank to stop easing its monetary policy and to keep interest rates stable at 6.5%.

Despite the fall in the value of the lari, BGEO was bullish about the issue. “This is in line with GGU’s funding strategy to continue to raise new funding in local currency, with longer-term maturity,” Irakli Gilauri, BGEO’s CEO, said in a statement.

Georgian Water and Power, which supplies water to Tbilisi, Mtskheta and Rustavi, was privatised in 2008. The sale was criticised because of a perceived lack of transparency over GGU’s British Virgin Islands registration.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Russia argues with Georgia over gas

DEC. 15 2016 (The Conway Bulletin) — At a meeting in Vienna on Dec. 13, Gazprom chiefs told Georgia that a long-standing deal by which it could take a 10% chunk of gas that Russia exports to Armenia via Georgian territory should be scrapped, Georgian energy minister Kakha Kaladze told media. The two sides held similar negotiations last year. Russia wants the gas deals to move onto a monetised basis, Georgia wants to swap deal to remain. Last year a swap deal was retained.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Oil platform collapses in Azerbaijani sector of the Caspian Sea, 1 oil worker killed and 9 missing

DEC. 15 2016 (The Conway Bulletin) — Nine oil workers were missing after an oil rig partially collapsed during a storm in the Azerbaijani sector of the Caspian Sea that killed at least one person, Azerbaijan’s state energy company SOCAR said.

The collapse came almost exactly a year after a fire on two Azerbaijani oil platforms killed 30 oil workers in the worst offshore accident in the energy sector since 167 people died in the Piper Alpha fire in the North Sea in 1988.

The latest accident will embarrass SOCAR and Azerbaijan’s oil sector because it had promised to improve safety after the deaths in 2015.

Much of the infrastructure that SOCAR uses in the Caspian Sea is decades old and Azerbaijan has been heavily criticised for not updating and modernising its structures.

The oil industry is also vital to the Azerbaijani economy. It has been under pressure to maintain oil output despite the aging infrastructure and aging fields.

SOCAR officials said that emergency services are still looking for the nine missing oil workers.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Stock market: OPEC

DEC. 16 2016 (The Conway Bulletin) — The collapse in oil prices since 2014 has hit the economies of Central Asia and the South Caucasus. Every now and then, though, a new touted solution emerges, be it maximising oil output to earn as much as possible or freezing output and waiting for sunnier days.

Both Azerbaijan and Kazakhstan, the main producers in our region, have played with the idea of “freezing” oil production, although this is more a reflection of a drop in production at aging oil fields rather than a conscious choice. An agreement reached between members of OPEC and other producers seems to have solved the headache in the medium-term. The parties pledged to cut output, forcing prices up.

This measure, however, lasted just a few days.

After the US Federal Reserve raised interest rates for the first time in one year on Wednesday, the US dollar soared against all commodities, cancelling out the progress made after the OPEC-sponsored meeting.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Kazakhstan details mortgage plan

ALMATY, DEC. 12 2016 (The Conway Bulletin) — The Kazakh government plans to stimulate the housing market by subsidising mortgages under a programme dubbed Nurly Zher, which means the Bright Land in English.

At a government meeting, the economy ministry said that the plan would help build 1.5m new houses over the next 15 years. It said that the state would invest $5.3b into the scheme and that the private sector would invest $47b.

“To encourage private developers to take advantage of available credit resources the state will subsidize part of the interest rate on loans extended by banks,” the economy ministry said in its statement.

The plan is an ambitious attempt by the Kazakh government to stimulate its flatlining economy. GDP growth has been stagnan, pulled down by low oil prices and a recession in Russia. The tenge has lost around 50% of its value and ordinary Kazakhs are feeling the pinch. This year rare anti-government protests sprung up across the country.

The government has said that it will restructure old mortgages and has also said it will subsidise the interest rate on new mortgages by knocking 7 percentage points off the cost of borrowing. Commercial rates for mortgages in Kazakhstan are currently around 17%. Under the government’s plan, new mortgage holders will pay only 10%, with the government paying the equivalent of 7% of the mortgage.

Even so, people are sceptical.

“I’m scared of whole economic situation in the country,” said Bolat Mukashev, 25. “You don’t know what will happen tomorrow and there is no stability. Any moment tenge might collapse again and there is a high chance I could lose my job.”

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Georgia’s economy to grow in 2017

DEC. 15 2016 (The Conway Bulletin) — In Georgia’s governmental budget presented to and passed by parliament, officials said that they targeted GDP growth of 4% next year. Despite the tough economic conditions, Georgia has managed to engineer some positive economic growth in 2016, unlike its neighbours, Armenia and Azerbaijan, who have been hard hit by the drop in oil prices and a recession in Russia.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f

Turkmenistan’s Democratic party puts Berdy forward

DEC. 15 2016 (The Conway Bulletin) — Turkmenistan’s Democratic party formally put President Kurbangkuly Berdymukhamedov forward as its candidate in an election set for February. Mr Berdymukhamedov has been in power for a decade. He is likely to easily win the presidential election. No Western vote monitors have ever judged an election in Turkmenistan to be either free or fair.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f