Category Archives: Central Asia & South Caucasus News

Rostelmash to open plant in Uzbekistan

NOV. 29 2016 (The Conway Bulletin) — Rostselmash, a Russian manufacturer of agricultural equipment, said it plans to establish a plant in Uzbekistan. The Rostov-on-Don company plans to occupy the site that it operated during Soviet times in the township of Chirchiq, in the outskirts of Tashkent. Rostselmash had opened the Chirchiq factory and three other plants in Tashkent in the 1940s.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

EBRD wants to increase investments in Kazakhstan

NOV. 30 2016 (The Conway Bulletin) — The European Bank for Reconstruction and Development (EBRD) pledged to increase its investment plans in Kazakhstan to $1b in 2017. So far in 2016, the EBRD has invested around $900m. At a meeting in Shymkent in Southern Kazakhstan, EBRD country director Janet Heckman also pledged increased investment in the utility sector.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Kazakhstan’s Samruk-Kazyna fails to obtain a review

NOV. 28 2016 (The Conway Bulletin) — Kazakhstan’s sovereign wealth fund Samruk-Kazyna failed to obtain a review of a US court case that deemed the fund liable for the misrepresentation of BTA Bank bonds sold abroad in 2010-2012. The US court said in February that the Kazakh fund had concealed information regarding dealings with BTA that led to the bank’s default in 2012. The decision was significant because it marked an exception to the Foreign Sovereign Immunities Act which protects activities by sovereign wealth funds.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Georgia may sell 25% stake in energy company in IPO

TBILISI, NOV. 29 2016 (The Conway Bulletin) — The Georgian government is considering selling a 25% stake in Georgian Oil and Gas Corporation (GOGC) on the London Stock Exchange next year, a move that would give foreign investors another chance to buy into Georgia.

GOGC is Georgia’s state-owned energy company, administering its oil and gas contracts and also refurbishing and building power stations to generate electricity. Selling a 25% stake GOGC is likely to generate high levels of investor interest.

Georgia’s finance minister Dmitry Kumsishvili said: “The corporation’s 25% stake will be placed on one of the exchanges abroad, in London or Shanghai.”

Georgia’s BGEO Group, which controls Bank of Georgia, and its subsidiary Georgian Healthcare Group are already listed in London.

GOGC controls the North-South pipeline used by Russia to export gas to Armenia and is building the 450km-long East-West pipeline network, that will link its southern border with Azerbaijan to the Black Sea port of Poti. It also owns a 51% stake in the $230m Gardabani power plant, one of the biggest in Georgia, which was opened last year.

Azerbaijan’s state-owned energy company SOCAR, which supplies gas to Georgia, has also said that it is interested in buying a 25% stake in GOGC, according to the Trend news agency.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Tajikistan strips 6 RFE/RL reporters of accreditation

NOV. 28 2016 (The Conway Bulletin) — The US-funded Radio Free Europe/Radio Liberty said that the Tajik authorities had stripped six of its reporters of their accreditation after the news agency published a story criticising the promotion of President Emomali Rakhmon’s daughter to a senior foreign ministry position.

Mr Rakhmon has a reputation for promoting his friends and family to high positions in the Tajik government and some analysts have said that he is setting up his son, Rustam Emomali, to take over the presidency from him. Mr Rakhmon has changed the constitution to scrap minimum age limits for presidential candidates.

Earlier this year Rukhshona Rahmonova, his daughter, was made an MP and now she has been appointed the deputy head of a department within the foreign ministry.

RFE/RL said that the stripping of its journalists’ accreditation was an attack on the whole agency.

“We are outraged by this action by the Tajik government, which is a blatant attack on our ability to do our jobs as journalists,” it said in a statement on its website.

The media scene for journalists in Tajikistan has been worsening over the past few years. The government has jailed both dissenting journalists and opposition activists.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Kazakh state cuts petrol controls

NOV. 22 2016 (The Conway Bulletin) — The Kazakh government said that it would ditch price controls of AI-80 grade petrol from 2017. The move is inline with a policy developed last year. It ditched price controls of AI-92 and AI-94 in September 2015 shortly after a sharp devaluation in the Kazakh tenge. The tenge had taken a nosedive after a peg to the US dollar was scrapped, putting the government’s price controls under major pressure.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Fighting becomes intense in Turkmen-Afghan border

NOV. 23 2016 (The Conway Bulletin) — Residents of Marchak, a village on the Turkmen-Afghan border,told the US-funded Radio Free Europe/Radio Liberty that fighting in the border areas was becoming more serious. The Turkmen government has said it was concerned about a move north by the Taliban but has denied that there is currently a problem. The RFE/RL report suggests otherwise.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

OPEC courts non-members, including Azerbaijan

NOV. 24 2016 (The Conway Bulletin) — Azerbaijan’s energy minister, Natig Aliyev, said that OPEC had asked Azerbaijan and other non-OPEC members to cut oil production in an attempt to raise prices. Azeri newspaper Respublika quoted Mr Aiyev as saying that OPEC wanted non-members to cut up to 800,000 barrels of oil per day of production, a figure that it said would eat into the vast reserves. OPEC and non-OPEC members are due to meet again in Vienna on Nov. 28 to decide on the final level of cuts to production.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Stock market: Nostrum Oil & Gas

NOV. 25 2016 (The Conway Bulletin) — Amsterdam-based Nostrum Oil & Gas posted a decline in revenues it its Q3 report this week, but that didn’t stop investors buying its stock.

Nostrum’s stock price climbed back to November 2015 levels, seemingly dispersing the tough months of 2016, when oil prices plunged to around $30/barrel.

The company successfully cut costs and hopes to contain the drop in production to around 10% this year. Next year, the company will further reduce costs once it starts sending its oil through the KazTransOil pipeline due to be completed in Q2 2017.

“We look forward to realising a significant decrease in transportation costs once the KTO pipeline connection is complete by Q2 next year,” CEO Kai-Uwe Kessel said in a statement.

“Our focus now turns towards the 2017 drilling programme and delivering our major infrastructure project, GTU3, on time and on budget.”

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Trump boosts copper, companies in Central Asia benefit

NOV. 25 2016 (The Conway Bulletin) — Copper prices have gained around 12% to a 16-month high of $2.67/lb, since the election of Donald Trump as US president-elect, showing the power of his words.

Trump’s plan to invest $1 trillion in overhauling ageing infrastructure across the United States gave a boost to the global market price of copper, a key element for large construction projects.

Companies in Central Asia that focus on copper production, chiefly Central Asia Metals and KAZ Minerals in Kazakhstan, also benefited from the Trump effect on copper prices.

Both companies saw their share prices soar in the London Stock Exchange by around 20 – 25% in the past two weeks, a sign that the commodity slump could timidly start to reverse.

Central Asia Metals seized the opportunity to acquire a new deposit in Kazakhstan this week, which showed just how bullish the market has become.

Zak Mir, an analyst for the Proactive Investor website, said that Central Asia Metals’ stock price, which is already at its historical high, is on track to reach 240p/share within the next few months. This would be almost double this year’s low of 124p/share.

It’s been a roller coaster year for commodity companies in the region and this doesn’t look like changing.

Despite the uncertainty, the metals market might well reverse their downward trend before oil prices start growing again, marking an important split between the two sectors.

The Central Asian and South Caucasus region has been badly hit by the fall in commodity prices in the last two years. Any sign of recovery is good news.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)