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Georgia becomes new destination for Chinese tourists

JUNE 15 2016 (The Conway Bulletin) – China Southern Airlines, a Chinese carrier, said it will begin regular flights from Beijing and Urumqi to Tbilisi from September 22. The company said the move responds to increasing interest in Georgia as a tourist destination. China Southern Airlines launched pilot flights from Tbilisi to Urumqi last November. Chinese tourism has become big business for Georgia which is increasingly promoting itself as a holiday destination.

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(News report from Issue No. 285, published on June 17 2016)

Kazakhstan begins constructing Shymkent city

JUNE 13 2016 (The Conway Bulletin) – Kazakhstan’s government said it has started construction work at Shymkent City, a new urban development outside Shymkent, in the south of the country. The government will share costs with local investors and plans to deliver the project in 2020. Shymkent is Kazakhstan’s third-largest city. The government wants to stimulate the economy through major building schemes.

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(News report from Issue No. 285, published on June 17 2016)

Kazakh oil revenues fall

JUNE 15 2016 (The Conway Bulletin) – Kazakh officials said production of oil and gas makes up around 17% of the country’s GDP, a proportion eight percentage points lower than in 2015. The fall in oil prices has impacted both feasibility and profitability at Kazakhstan’s oil and gas fields. This is an important measure of the impact of the drop in oil price on Kazakhstan’s economy.

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(News report from Issue No. 285, published on June 17 2016)

US court to seize Uzbek President’s daughter’s accounts

JUNE 12 2016 (The Conway Bulletin) – A US court said that it is ready to seize assets linked to Gulnara Karimova, daughter of Uzbekistan’s President Islam Karimov, in Ireland, Belgium and Luxembourg, if a corruption case in New York courts is not resolved soon. US authorities said these assets are valued €269m ($303m). In February, Ms Karimova was named as the beneficiary of bribes paid by telecoms companies seeking licences in Uzbekistan, the largest foreign corruption probe in US history.

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(News report from Issue No. 285, published on June 17 2016)

Business comment: Gold in Central Asia

JUNE 17 2016 (The Conway Bulletin) – Gold prices climbing up towards $1,300/ounce, but not everyone in the mining sector in Central Asia is happy.

In Kazakhstan, Russian miner Polymetal received a much-needed lifeline from Sberbank to push forward with its Kyzyl project in north-eastern Kazakhstan. The gold sector in Kazakhstan is enjoying a positive season, as production numbers in the country are up 3.7% to 13 tonnes of fine gold in the first five months of the year, compared to Jan.-May 2015.

The steady growth is paired with increased investment, as Polymetal is focusing its growth outside Russia on Kazakhstan and Armenia.

But this year has not brought only good news in Kazakhstan. In March, Alhambra Resources said it was seeking damages against Kazakhstan’s government, via the World Bank’s International Centre for Settlement of Investment Disputes, for the bankruptcy of its Kazakh subsidiary.

Recovering commodity prices, however, can do little to improve the mood in Kyrgyzstan, where Centerra Gold and the government are increasingly entangled in what could become a decisive legal battle.

Centerra sought the resolution of the continuous fines and corruption probes at the Stockholm court of arbitration.

The Kyrgyz government responded with more fines and charged a former director of Kyrgyzaltyn — which owns a stake in Centerra — of taking bribes from the Canadian miner.

These charges, fuelled by allegations from a former Centerra director, would make the Canadian company guilty of paying bribes, serving an order to the government, which is trying hard to show Centerra under a bad light.

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(News report from Issue No. 285, published on June 17 2016)

Stock market: Tethys, Nostrum

JUNE 17 2016 (The Conway Bulletin) – Central Asia and South Caucasus-linked stocks fell this week, driven down by lower oil prices. As shown in the table, Tethys and Nostrum shares dropped significantly over the past week after a rather stable month.

Roxi, on the other hand, moved against the tide, gaining 15.3% in one week.

On June 14, the company’s non-executive director Edmund Limerick purchased 500,000 shares at 9.8p/share, for a total of £49,000. Mr Limerick and his wife now own 1.15m shares, or 0.12% of the company, up from 0.07% before the purchase.

The deal pushed up the share price, giving it a boost after weeks of downward pressure.

Kuat Oraziman, CEO, and Kairat Satylganov,CFO and director, own Roxi, which operates in Western Kazakhstan, not far from the massive Tengiz oilfield.

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(News report from Issue No. 285, published on June 17 2016)

Azerbaijan’s SOCAR becomes EURO sponsor

JUNE 10 2016 (The Conway Bulletin) – SOCAR, Azerbaijan’s state-owned energy company, is a major sponsor of the UEFA Euro 2016 football tournament currently taking place in France. Neither SOCAR, nor UEFA disclosed the amount paid for the sponsorship, although local media outlets have said it is around 120m manat ($80m).Azerbaijan’s government had previously sponsored Spain’s Atletico Madrid and England’s Sheffield Wednesday.

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(News report from Issue No. 285, published on June 17 2016)

Tajikistan’s TSB resumes transactions

JUNE 10 2016 (The Conway Bulletin) – Tojiksodirotbonk, Tajikistan’s second largest lender, said it resumed money transfer transactions, and that it continued to operate under the administration of the Central Bank. TSB, as it is commonly known, is awaiting confirmation from the EBRD for a funding lifeline of around $165m. The investment would give the EBRD a 25% stake in the bank.

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(News report from Issue No. 285, published on June 17 2016)

Newspaper risks closure in Azerbaijan

JUNE 14 2016 (The Conway Bulletin) – The editors of Azadlig, an opposition newspaper in Azerbaijan, said they had received a letter from their publisher that warned of a possible closure by the end of the month. Azadlig, which means freedom, has to pay an outstanding debt of around 18,000 manat ($12,500) by June 27. Azadlig editors said that the state-owned press agency owes the newspaper around 70,000 manat ($46,000) and that this is an attempt to silence opposition voices.

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(News report from Issue No. 285, published on June 17 2016)

Chinese company opens hospital near Georgian capital

TBILISI, JUNE 14 2016 (The Conway Bulletin) — Hualing Georgia, a private Chinese company, opened a 100-bed hospital near Tbilisi, increasing its commitment to a new urban development and entering the crowded healthcare services market.

The new hospital cost 4.5m lari ($2.1m) to build and is located at the Tbilisi Sea New City, which is being built on the shores of an artificial lake near Georgia’s capital city. Georgian PM Giorgi Kvirikashvili opened the hospital and highlighted the significance of the project.

“This hospital is really an important project for this district. I wish good health to everyone but it’s important to have this type of medical facility close to where you live, and in this district there was no hospital before,” Mr Kvirikashvili said at the inauguration ceremony.

Hualing has invested heavily in Georgia. In October 2015, the company built a new hotel Tbilisi Sea New City. In May, it also said it will build an elevator factory in Kutaisi.

The healthcare sector in Georgia is dominated by London-listed Georgia Healthcare Group (GHG), which controls around 27% of hospital beds. In May, it bought GPC, a drugmaker that controls a 15% share of the pharmaceutical market. BGEO, a holding company that owns Bank of Georgia, owns 65% of GHG.

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(News report from Issue No. 285, published on June 17 2016)