Category Archives: Central Asia & South Caucasus News

Markets: Central Asia Metals

APRIL 13 2017 (The Conway Bulletin) — Central Asia Metals, which is focused on Kazakhstan, posted turnover up 3% at $69.3m for 2016, helping to push up its share price to a five-week high of 242p by April 10.

This has since come off slightly but Central Asia Metals is still threatening to push past an all-time high of 246p set in mid-February. That’s certainly what analysts think. Most of them reiterated a ‘buy’ rating with Peel Hunt targeting 255p and FinnCap targeting 264p.

One of the main attractions for shareholders is the strong dividend that Central Asia Metals pays out. The Motley Fool, a stock analysis blog, explained.

“Shareholders will reap the benefit of this strong performance.

As much as 31% of last year’s revenue will be returned to shareholders by way of a total dividend of 15.5p. This gives a yield of 6.7% at the current share price of 229p,” the Motley Fool wrote before the share price started rising.

“This isn’t a one-off performance. The company’s dividend policy is to return at least 20% of revenue from Kounrad to shareholders each year.”

Kounrad is Central Asia Metal’s low-cost copper producing site in Balkhash, central Kazakhstan.

To underline the Motley Fool’s point, take a look at previous dividends. In 2015 and 2014, Central Asia Metals paid out 12.5p, in 2013 9p and in 2012 10.7p.

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(News report from Issue No. 324, published on April 13 2017)f

Kyrgyz Supreme court backs Tekebaev detention

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MARCH 29 2017 (The Conway Bulletin) — Kyrgyzstan’s Supreme Court upheld the detention of opposition leader Omurbek Tekebaev who was arrested when he tried to enter the country in February. The authorities have accused Mr Tekebaev, who is a leader in the Ata Meken party, of bribe-taking and fraud. His detention sparked off anti-government street demonstrations in Bishkek and in the south of the country. Also in Kyrgyzstan, the security services confirmed that it had charged another senior member of the Ata Meken party, acting chairman Almambet Shykmamatov, with fraud while he was an auditor at the State Accounting Chamber in 2011.

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(News report from Issue No. 323, published on April 6 2017)

Tajik president’s son gets elected into city assembly

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APRIL 2 2017 (The Conway Bulletin) — The son of Tajik president Emomali Rakhmon, Rustam Emomali, was officially voted in as a deputy in Dushanbe’s city assembly. The vote allows Mr Emomali to take over as mayor of Dushanbe, a move that marks yet another shift rise for a man analysts have said is being groomed to take over the top job from his father. In January, Mr Rakhmon appointed his son to be the acting mayor of Dushanbe, but he could only become the permanent mayor after he had been elected to the city’s assembly. He had previously been head of the government’s anti-corruption unit and head of Tajikistan’s football federation.

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(News report from Issue No. 323, published on April 6 2017)

Armenia’s new constitution

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APRIL 6 2017 (The Conway Bulletin) — >> Armenia has just held a parliamentary election that many observers have said is its most important since independence from the Soviet Union in 1991. Why?

>> The parliamentary election on April 2 was the first since a referendum in December 2015 that changed the constitution and shifted the balance of power away from the President to the PM and parliament. The constitutional changes don’t actually come into effect until President Serzh Sargysan finishes his second and final term in office next year, but the point is that the parliament elected this month will have more power than any other in Armenia’s independence.

>> What are the main changes in the constitution?

>> Whereas neighbouring Georgia shifted some power to parliament in constitutional changes in 2010, Armenia went the whole hog and will move from a presidential system to a parliamentary one. The president is to become a figurehead with no decision-making powers. Direct elections for the president will also be scrapped, parliament will instead pick him or her. Instead, the PM will be the head of the military, will appoint ministers and will set the various policies. Previously, the President had controlled all the major decisions, including appointing the PM.

>> So why were the changes controversial?

>> There the suspicion that Sargsyan and his allies were trying to tie up power for themselves. Sargsyan is obliged to stand down as President at the end of his second term. The opposition said that he would then try to become PM to retain all his power. We’ll have to wait and see on this. It was certainly convenient for Sargsyan that only his allies and appointees sat on the commission to draft the new constitution and also that it doesn’t come into force until the end of his second term.

>> How has Parliament changed with the new constitution?

>> The number of deputies is being cut to 101 directly elected, down from 131, with four seats being given to ethnic minorities. The 101 seats will also be elected wholly through a system of proportional representation. A second round vote has also been introduced to ensure that the winning party has a parliamentary majority. Opposition members have criticised the reforms as undemocratic but the Venice Commission, the Council of Europe’s constitutional watchdog, gave the changes a qualified thumbs up.

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(News report from Issue No. 323, published on April 6 2017)

Republican Party easily wins Armenian parliamentary election

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YEREVAN, APRIL 2/3 2017 (The Conway Bulletin) — Armenia’s ruling Republican Party won a parliamentary election that will shape the country’s politics for years to come, although its opponents complained of vote- rigging and monitors said that there had been irregularities.

Victory for the Republican Party, though, didn’t trigger the outpouring of frustration and resentment that some had predicted and a Conway Bulletin correspondent in the capital said it was calmer now than in any previous election over the past few years. In 2008, protests dragged on until clashes between demonstrators and soldiers killed at least 11 people.

Much of the Republican Party support came from people unwilling to take a risk with the opposition.

“I had to vote for Republicans as I am a teacher which means I work for the state and I am paid from state and this is kind of a payback,” said a Yerevan-based teacher after voting.

Only four groups won enough votes to enter parliament which will wield more power after a change to the constitution that shifts power from the president to parliament.

President Serzh Sargsyan’s Republican Party won 49% of the vote and will hold 55 seats of the 105-seat parliament. The Tsarukyan alliance led by oligarch Gagik Tsarukyan, generally considered to be sympathetic to the government, won 27% of the vote and will have 30 MPs. For the opposition, the Yelk (Way Out) bloc won 7% of the vote and Armenia’s Revolutionary Foundation party won 6%.

The assessment of the OSCE’s election monitoring unit, ODHIR, though, was less than flattering.

The elections were “tainted by credible information about vote-buy- ing, and pressure on civil servants and employees of private companies,” it said in a report.

The Conway Bulletin spoke to one person happy to take money in exchange for their vote.

“I wasn’t going to go at all, but my neighbour learned that they were buying votes,” said a 32-year-old man in Yerevan. “They paid 10,000 dram ($20.66) per person and explained how to vote.”

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(News report from Issue No. 323, published on April 6 2017)

Food prices rise in Turkmenistan

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MARCH 31 2017 (The Conway Bulletin) — The Turkmen government has ordered shopkeepers to raise their prices by 20%, as a kind of unofficial tax to help the state pay for the Asian Indoor and Martial Art Games which it is hosting later this year, the Radio Free Europe/Radio Liberty website reported. It quoted an opposition website and also ordinary people from Ashgabat as saying prices had risen by between 20% and 50% this year on various foodstuffs.

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(News report from Issue No. 323, published on April 6 2017)

Trail route from Azerbaijan and Georgia to Turkey to open in June

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MARCH 29 2017 (The Conway Bulletin) — The Baku-Tbilisi-Kars rail route, considered a vital piece of infrastructure linking the Caspian Sea to Europe, will officially opened in June, media reported by quoting Turkey’s minister of transport, Ahmet Arslan. The route has been severely delayed. It is primarily designed for goods transport but will also carry passenger sleeper trains.

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(News report from Issue No. 323, published on April 6 2017)

Comment: The green shoots of a recovery are visible

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APRIL 6 2017 (The Conway Bulletin) — In Edinburgh, where The Conway Bulletin has its editorial HQ, the green shoots of a timid spring are finally beginning to breakthrough after a long, grey winter.

And it’s the same scenario for the economies of Central Asia and the South Caucasus. A deep, bleak winter has enveloped them since mid-2014 but now, finally, data suggests a revival is on the horizon.

In this week’s newspaper, we report that both the Kyrgyz and Armenian Central Banks have kept their key interest rates steady. This, in itself, is a victory. Armenia has been furiously cutting its rates from a high of 10.5% in 2015 to 6% to try to stimulate growth and beat deflation. Now it says this policy has gone far enough and that inflation of around 4% is predicted this year.

In Kyrgyzstan, the economic news is even more upbeat. In its statement explaining just why it had kept interest rates steady, the Central Bank said that it was no longer having to intervene in the money market to keep the som currency from sliding. It also said that the economy had grown by 5.4% in January and February compared to the same period in 2016.

Armenia and Kyrgyzstan are two of the smaller economies in the region but the larger economies are also reporting positive news.

In Georgia, the statistics agency said that the economy had grown by 4.8% in the first two months of the year, pushed up by a growth in exports and an all- important rise in remittances. Georgia may also be benefiting from several local factors. Improved relations with Russia have given exports a major boost, especially wine, and the scrapping of visa regulations for Iranians has encouraged a large rise in tourists and business trips.

For the region’s two major economies the data has been less flattering, although there are still signs of improvements. In Azerbaijan, there is disagreement between economists on whether its economy will grow or not after it shrank by 3.8% in 2016. It’s dependent on oil, and prices are currently hovering around $50/barrel, above the anticipated $40/barrel.

In Kazakhstan, the Central Bank last month cut its interest rate and gave its most upbeat assessment of the economy, pointing out that inflation was under control and growth was expected.

And if you’re still not convinced about those green shoots of economic recovery, and that’s understandable as, just like a Scottish spring, they are fragile, take a look at the Azerbaijani manat and the Kazakh tenge. They are both up against the US dollar by more than 5% this year.

By James Kilner, Editor, The Conway Bulletin

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(News report from Issue No. 323, published on April 6 2017)

Kyrgyz opposition in jail attempts suicide

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APRIL 2 2017 (The Conway Bulletin) — Kyrgyz opposition leaders demanded an investigation into wounds found on Sadyr Japarov, a former MP who was detained last month after he arrived back in Kyrgyzstan after four years of self- imposed exile. Mr Japarov, who has been detained on suspicion of involvement in various financial crimes, was found with cuts to his neck which the authorities have said were self-inflicted during a suicide attempt. In March hundreds of Mr Japarov’s supporters had clashed with police in Bishkek. Mr Japarov is one of several opposition leaders who have been arrested.

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(News report from Issue No. 323, published on April 6 2017)

Tajik lawyer flees into exile

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MARCH 29 2017 (The Conway Bulletin) — A lawyer working on a human rights case in Tajikistan has fled the country fearing for her safety, Radio Free Europe/Radio Liberty reported, just the latest in a series of anti- government activists who have moved into self-imposed exile. RFE/RL said that they had spoken to Muazzama Qodirova who was now in Germany where she hoped to apply for asylum. She had been working on defending jailed human rights lawyer, Buzurgmehr Yorov. Free speech and human rights groups have complained of the Tajik government’s increasingly dictatorial approach to governing.

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(News report from Issue No. 323, published on April 6 2017)