Author Archives: admin

Fitch warns Azerbaijani banks they are increasingly vulnerable

SEPT. 9 2015 (The Conway Bulletin) — The Fitch ratings agency warned investors of the precarious state of Azerbaijan’s banking sector.

Authorities in Azerbaijan have put a brave face on the country’s shaky economic conditions but the Fitch report cut through the bluster.

“We believe capital positions at some banks are likely to come under significant pressure over the medium term from increasing credit losses,” Fitch said. “Capital cushions are only moderate in most cases, and internal capital generation is limited.”

Azerbaijan depends on oil and gas for over 90% of its exports, meaning that it haPs been particularly exposed to the collapse in oil and gas prices. GDP growth is slated at the relatively low 1.5%.

In February, the Central Bank devalued the manat currency by a third denting its credibility. Despite the devaluation, fresh data has shown that the Central Bank has still spent billions defending its new value.

Non-performing loans are likely to grow from their current level of 10%, a consequence that Fitch sees inevitable, especially given the growing amount of loans and deposits denominated in foreign currency.

“We expect zero loan growth for the banking sector in 2015,” Fitch said. “Asset quality, already somewhat strained, with impaired loans averaging 10% at end-1H15 at Fitch-rated banks, is likely to deteriorate further.”

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Georgian president signs banking law

SEPT. 10 2015 (The Conway Bulletin) – Georgian president Giorgi Margvelashvili signed into law a bill that switches supervision of commercial banks from the Central Bank to a state-linked body called the Financial Supervisory Body. Mr Margvelashvili tried to veto the switch but was blocked by parliament. Inter- governmental banks have criticised the switch and called it political.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

UN criticises press freedom in Azerbaijan

SEPT. 8 2015 (The Conway Bulletin) – The UN High Commissioner for Human Rights, Zeid Ra’ad al-Hussein, condemned Azerbaijan’s crackdown on media, the latest high profile institution to criticise Baku. On Sept. 1, a court in Baku jailed journalist Khadija Ismayilova for various financial crimes.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Despair hangs in the air in rural Azerbaijan

SHARABASH/Azerbaijan, SEPT. 11 2015 (The Conway Bulletin) — In northwest Azerbaijan, rain coated the mountain-ringed village of Sarabash with a glossy sheen. Walnut trees glistened and the smell of grass lifted up from the wet fields. It was 8am on a weekday morning but there were no signs of commerce or industry. Just silence.

Remote and cut-off, Sarabash was not connected to the rest of Azerbaijan by road until the 1970s. Today, the track is rock-strewn and rough and the villagers feel, once again, as though they have been forgotten.

The Soviet-era collective farming system, and their livelihoods, have collapsed. Baku and its environs may glow from a beautifying oil boom that has made Azerbaijan rich over the past decade but rural areas have been left behind. Sarabash feels forgotten.

Before the fall of the Soviet Union, collective farms did well up here. In the 1960s there were 40,000 cows and dozens of farming families.

The pair of crumbling statues that stand in the fields are testament to this. They represent the two shepherds who played a part in the village being given a Communist award in 1964. Since independence the villagers admit they have fallen on hard times. Only 40 people – and one shepherd – remain.

When the school principal, Migdav Sofiev, grimaced he revealed his full set of gold teeth. He shook his head and described the desolate state of the village.

“There are only seven children at the village school and when they leave, it will close,” he said.

By comparison the town of Qax lies just 45-minutes away from Sarabash. Throughout the summer there holidaymakers eat in garishly decorated restaurants while their children play in bowling alleys and on bouncy castles.

Over a glass of ayran, a thin, sour yogurt drink; some mountain honey; a disc of tandoor-baked bread, villagers said that despite the untouched mountain scenery it is extremely rare for foreigners to visit. Tourists are keener on the amenities in Qax and they don’t bother to come either.

A sense of resigned despair lingered over the breakfast table.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Honda says it is pulling out of Kazakhstan

ALMATY, SEPT. 4 2015 (The Conway Bulletin) — Japanese car-maker Honda has decided to quit the Kazakh and the Russian markets until economic conditions improve, media reported.

Honda’s final shipment of cars to Kazakhstan was at the start of 2015 and to Russia in Dec. 2014.

The fall in value of currencies and the collapse in the car market had forced Honda to leave.

Weak local currencies have pushed up prices of imported cars.

A Honda spokesperson denied that the company was quitting the former Soviet Union altogether.

“We think the market has potential in the future so we’re not pulling out,” she told the FT. “We can respond flexibly since we don’t have a plant in Russia.”

Honda car sales in Kazakhstan fell by around 50% in 2015. In Russia, they shrank by 78%.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Kazakhstan bans communist party

SEPT. 6 2015 (The Conway Bulletin) – A court in Almaty ordered the Communist Party of Kazakhstan, until a few years ago one of the only genuine opposition parties in the country, to disband permanently. Media reported that the Kazakh ministry of justice said the party had misrepre- sented its activities. In 2011, a few months before a parliamentary election in 2012, a court suspended the Communist Party.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Refugees from Syria resettle in Armenia

SEPT. 10 2015 (The Conway Bulletin) – Around 15,000 ethnic Armenians have fled their homes in Syria and resettled in Armenia, the BBC quoted the UN as saying. More than 100,000 Armenians had lived in Syria, mainly around Aleppo before a civil war broke out in 2011.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

FDI jumps in Georgia by 82% in Q2 2015

SEPT. 9 2015, TBILISI (The Conway Bulletin) — Foreign direct investments, so vital for Georgia’s economy, jumped by 81% in the second quarter of this year compared to the same period in 2014, the statistics agency said.

The data showed that Georgia attracted investments worth $355m between April and June 2015, up from 196m in 2014 and also up from the 175m in the first quarter of this year.

But foreign investment inflows to Georgia have been volatile over the past few years. In the second half of last year, for example, Georgia attracted investment of over $1.2b although it has damped this year.

Geostat didn’t give a reason for the increase in foreign investment although it said that the single largest investor in the second quarter of the year was Azerbaijan.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Rox Petroleum’s assets in Kazakhstan downgrade

SEPT. 4 2015 (The Conway Bulletin) — London-listed Roxi Petroleum said it had downgraded the value of its assets in Kazakhstan by 28% after last month’s devaluation of the tenge. Roxi’s main activities are focused in the Mangistau region, west Kazakhstan. Since the announcement, Roxi’s share price has fallen by 12%.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Tajik hunt for fugitive minister

SEPT. 11 2015, DUSHANBE (The Conway Bulletin) — Tajikistan’s security forces have been scouring rough countryside in a valley 150km from the capital Dushanbe for the country’s most wanted man, General Abduhalim Nazarzoda, a former deputy defence minister.

The authorities accuse Gen. Nazarzoda of masterminding a series of early morning attacks in Dushanbe and a police station at Vahdat, a town 10km away, on Sept. 4 that killed at least nine policemen and 13 gunmen.

In Dushanbe, the authorities blocked access to social media sites and ordered more soldiers to patrol along the streets.

Hoji Said, a local Dushanbe resident, summed up the tense atmosphere in the capital.

“I have not seen so many policemen in Dushanbe,” he said.

Still, despite the extra security, a World Cup football qualifier match between Tajikistan and Australia went ahead. Australia won 3-0.

Gen. Nazarzoda was one of the leaders of the Tajik United Opposition, a coalition that fought against the government in a civil war in the mid-1990s. He fled the country but returned after a UN- brokered peace deal ensured handed him a role in the government.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)