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Bank of Georgia issues first ever lari denominated debt

TBILISI, MAY 23 2017 (The Conway Bulletin) — London-listed Bank of Georgia issued 500m lari of debt ($200m), the first corporate bond denominated in Georgia’s national currency.

Georgian PM Giorgi Kvirikashvili said that the issue was a major victory for Georgia and showed that investors had confidence in the national economy and the national currency.

“International investors trust our country and our national currency. It is a momentous event, and I would like to congratulate everyone,” he said.

The Bank of Georgia debt is due to mature in 2020 and has a coupon of 11%.

Fitch the ratings agency gave the Bank of Georgia debt issue a BB- rating and said that this “reflects the bank’s adequate asset quality, reasonable capitalisation, sound profitability metrics and stable funding profile.”

Bank of Georgia has been listed on the London stock exchange since 2012. Its stock is now trading at 3,744p, an all-time high, against a price of around 3,000p in January.

For investors in the West, the Bank of Georgia debt issue not only gives them exposure to the Georgian financial sector but also to the lari. It has performed well this year, currently trading at 2.41/$1 compared to 2.76/$1 at the start of the year.

Much of this strengthening has been linked to a general uplift for Emerging Market stock and currencies as oil prices have stabilised, but some of it is specific to Georgia. Western analysts rate Georgia’s economy as the most diversified in the region and best equipped to cope with shocks.

Bank of Georgia and local rival TBC are the only banks in Central Asia and the South Caucasus to be listed on the LSE.

ENDS

(News report from Issue No. 330, published on May 28 2017)

Tourist number rise in Armenia

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MAY 24 2017 (The Conway Bulletin) — Tourist numbers in Armenia have risen by 25% between January and April, media reported by quoting the chairperson of the economy ministry’s tourism committee, Zarmine Zeytuntsyan. She said the number of tourists from China, Iran and Russia had risen.

ENDS

(News report from Issue No. 330, published on May 28 2017)

Construction continues at bribe-hit Kazakh glass plant

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ALMATY, MAY 24 2017 (The Conway Bulletin) — Construction work on a glass sheet factory in southern Kazakhstan is continuing despite it being the focus of a corruption scandal earlier this year that lead to the arrest of former Kazakh economy minister Kuandyk Bishimbayev.

Stewart Engineers, the US company involved in building the Orda Glass plant in the Kyzlorda region, said a deal had been signed with Chinese firm Triumph Group to complete construction work. Bishimbayev was arrested in January and accused of taking a $2m bribe for handing out a contract linked to the glass factory project.

ENDS

(News report from Issue No. 330, published on May 28 2017)

Armenia and Iran sign farm deal

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MAY 24 2017 (The Conway Bulletin) — Armenia and Iran signed a deal to jointly develop their agricultural potential, highlighting just how improved relations between the two neighbours has become. The joint development will focus on fighting pests together and quarantines. Trade between Iran and Armenia has increased as both countries have steadily tried to attract new allies.

ENDS

(News report from Issue No. 330, published on May 28 2017)

Kazakh uranium enrichment plant to be operational by 2020

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MAY 26 2017 (The Conway Bulletin) — Kazakhstan’s first uranium enrichment facility will become operational by 2019, an official at the Ulba Metallurgical Plant told Reuters. The project is a joint venture with China, which will take delivery of the enriched uranium for its nuclear power stations. Kazakhstan produces 40% of the world’s uranium but doesn’t yet have an enrichment facility.

ENDS

(News report from Issue No. 330, published on May 28 2017)

Armenia’s top footballer scores cup goal

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MAY 24 2017 (The Conway Bulletin) — Henrikh Mkhitaryan, Armenia’s top football player, scored the final goal in Manchester United’s 2-0 victory over Dutch club Ajax in the Europa League final. Mkhitaryan is a hero in Armenia and is considered one of the best players, if not the best, that the country has ever produced.

ENDS

(News report from Issue No. 330, published on May 28 2017)

Court in Georgia sentences seven for bomb plot

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MAY 23 2017 (The Conway Bulletin) — A court in Tbilisi sentenced seven men to prison for trying to blow up a gas pipeline running from Russia to Armenia last August. Neither the police nor the court gave a potential motivation for the bomb plot but they did say that there was no connection to IS, the radical Islamic group.

ENDS

(News report from Issue No. 330, published on May 28 2017)

Georgia detains manager of Gulen-linked school in Tbilisi

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TBILISI, MAY 25 2017 (The Conway Bulletin) — On Turkey’s request, police in Georgia detained Mustafa Emre Cabuk, manager of a Gulen- linked school, for allegedly having connections with terrorist networks.

Mr Cabuk’s detention came the day after a visit to Tbilisi by Turkish PM Binali Yildirim, triggering accusations that the Georgian government was more interested in boosting relations with its neighbour than human rights.

Turkey has been pressuring its neighbours to close Gulen-linked schools and universities and to extradite their key staff since a failed coup attempt last summer, which it blamed on the exiled cleric Fetullah Gulen.

In court, media reported that Mr Cabuk sobbed.

“These tears come because they badly touch my self-esteem. I’ve not had even a small knife in my life,” media quoted him as saying.

“Unfortunately, there is no justice in Turkey and therefore I ask not to extradite me.”

Mr Cabuk was the manager of the private Demirel College in Tbilisi. As reported in the Bulletin in February, the Georgian government closed down a Gulen-linked school in Batumi on Georgia’s Black Sea coast.

Like the rest of the Central Asia and South Caucasus region, Gulenists set up a network of schools and universities immediately after the fall of the Soviet Union in 1991. Then, the newly independent countries turned to Turkey for support. Russia was too weak and China had yet to develop a strategy towards its near-abroad.

And the Gulenist educational institutions have become some of the best in Central Asia. Kazakhstan and Kyrgyzstan have resisted Turkish moves to shut down these institutions but Azerbaijan and Georgia have acquiesced. Turkey is Azerbaijan’s most loyal ally and Georgia is increasingly currying favour with its neighbour through trade and military deals.

ENDS

(News report from Issue No. 330, published on May 28 2017)

Head of Uzbek Central Bank dies

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MAY 24 2017 (The Conway Bulletin) — The head of Uzbekistan’s Central Bank, Fayzulla Mullajanov died aged 67 from complications linked to kidney disease, media reported. Mullajanov had been head of the Central Bank for 14 years and retained his position when Shavkat Mirziyoyev took over as president after Islam Karimov died in September 2016. In reality, the Uzbek Central Bank has little independence from central government.

ENDS

(News report from Issue No. 330, published on May 28 2017)

Stock market: Georgia’s TBC, Kaz Minerals

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MAY 28 2017 (The Conway Bulletin) — Profit at Georgia’s London-listed TBC Bank rose by two-thirds to nearly 100m lari ($40m) highlighting the increasingly upbeat assessment of the Georgian banking sector.

The bumper results also pushed up TBC’s share price to an all-time high of 1,695p. This is nearly an 18% increase from the start of the year and is an increase of roughly 65% from when TBC listed in August.

The main driver of this improvement has been an overall strengthening of Georgia’s economy. The region has been hit hard by a downturn in economic conditions, linked to a collapse in oil prices and also a recession in Russia.

TBC’s main rival, the London- listed Bank of Georgia, has also been hitting similar all-time highs. As well as boosting its stock price, Bank of Georgia also gain a PR boost when it issued 500m lari debt, the first corporate issue in lari.

Elsewhere, KAZ Minerals has been performing well. It’s been yoyo-ing around and has regained much of the ground lost in March. KAZ Minerals is a major copper producer and its share price follows copper prices to a large extent.

It is now trading at 506p, up from 430p at the beginning of the month but down from highs of 589p hit in mid-February.

KAZ Minerals used to by known as Kazakmys, which was linked by transparency campaigners to Kazakh Pres. Nursultan Nazarbayev.Stock market: Georgia’s TBC, Kaz minerals