Category Archives: Uncategorised

Gelncore to sell futures in Kazakhstan

MAY 17 2016 (The Conway Bulletin) — Switzerland-based trader Glencore is considering selling gold futures, not its whole gold mining operation at Vasilkovskoye, a source close to the deal told the business website atameken.info. Glencore owns 70% of Kazzinc, the company that operates Vasilkovskoye which is located 300 km north-west of Astana. Reports had previously stated that Glencore was looking to sell its stake in the mine.

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(News report from Issue No. 281, published on May 20 2016)

Rakishev dismisses latest KazKom downgrade

ALMATY, MAY 18 2016 (The Conway Bulletin) — Kazkommertsbank, Kazakhstan’s largest lender, said it wants to buy back up to $500m in Eurobonds due this year, a bullish response to a recent double downgrade it received from international ratings agencies.

In a wide-ranging press conference, KazKom’s new chairman Kenes Rakishev said the bank has enough liquidity to pay for its debt, which will reach maturity later in 2016 and in early 2017.

“While our consultants advise us to buy back $300m, we are ready to buy back $500m,” Mr Rakishev told media and investors. “It’s a business decision as it is now cheaper to deal in the domestic market than it was when the bonds were issued.”

Mr Rakishev was appointed chairman of KazKom earlier this month after effectively completing a buyout of the country’s largest bank. He is the son-in-law of Kazakh defence minister, Imangali Tasmagambetov. He owns large stakes in several major

Kazakh companies and is often considered to be working on behalf of more senior members of the Kazakh elite.

Earlier in the week, the ratings agency Standard & Poor’s had cut KazKom’s debt rating to CCC+ because it said that via its merger with BTA Bank, the indebted bank that the government had owned, KazKom had inherited a swathe of bad debt in foreign currencies.

Some analysts have said that the KazKom/BTA merger and Mr Rakishev’s takeover were driven by politics and not business.

Mr Rakishev, though, brushed the downgrade aside and pointed out that other ratings agencies had already factored this into their calculations and issued earlier downgrades.

“I think we’ve passed the darkest zone and that we will move on to a completely new zone and concentrate on how to eliminate negative things that have occurred,” he said.

And Mr Rakishev also said that he wanted KazKom to shift its emphasis into the SME sector.

“We have an opportunity here to grow,” he said. “And not only in Almaty and Astana but also in the regions.”

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(News report from Issue No. 281, published on May 20 2016)

Azerbaijan and Uzbekistan sign energy deal

MAY 18 2016 (The Conway Bulletin) – Azerbaijani and Uzbek state-owned energy companies signed a memorandum of understanding to explore and exploit oil and gas fields in Uzbekistan. SOCAR’s president Rovnag Abdullayev and Uzbekneftegaz’s chairman Alisher Sultanov met in Tashkent on the sidelines of an international oil and gas conference to sign the deal. It is perhaps telling that with oil prices so low, the Azerbaijani and Uzbek governments are having to fund development of their oil and gas sectors themselves.

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(News report from Issue No. 281, published on May 20 2016)

Business comment: Flying TSE – ULN

MAY 20 2016 (The Conway Bulletin) — The two coldest capital cities in the world will not be connected after all.

Air Astana postponed indefinitely the launch of a new link with Ulaanbaatar because of an ongoing spat between the Kazakh flagship carrier and the Mongolian civil aviation agency.

This can be easily dismissed as a hiccup in the business process, but there might be more to it.

Publicly, Air Astana said: “We had permission to start flights in March 2016. In April the CAAM [the Mongolian agency] unilaterally withdrew it without any valid grounds.”

Responding to a question from the Bulletin posted on Twitter, Air Astana said that the spat with Mongolia has nothing to do with the problems with Russia’s aviation agency, which left a Top Gear crew stranded in Moscow last year while a handful of flights were cancelled.

“It isn’t linked to Russia CAA,” the Air Astana tweet read.

But it’s hard to believe that the two incidents are not connected, since both happened in the same week and were cross-referenced by the Kazakh government when it addressed the issue. This might well be a case of international politics interfering with the business world in Central Asia.

But let’s take Air Astana’s version at face value. In this case, the spat with the Russian and Mongolian civil aviation agencies and the recent announcement that the launch of a connection to Tehran would be a triple setback for the company owned by the sovereign wealth fund Samruk- Kazyna (51%) and British BAE Systems (49%).

Maybe the bullish attitude of the previous months, boasting new routes and international agreements, is unjustified?

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(News report from Issue No. 281, published on May 20 2016)

Georgia Healthcare Group posts strong Q1 results

MAY 17 2016 (The Conway Bulletin) — Georgia’s largest healthcare company, Georgia Healthcare Group (GHG), posted a 33% rise in revenue in the first quarter of 2016, highlighting rising demand from Georgians for private medical services.

Revenues increased to 71.7m lari (around $33m) in the first quarter of 2016, a jump of a third from 2015. The company attributed the positive results to its ability to grab market share in the healthcare sector.

And this is set to grow, according to GHG, which bought Georgian pharmaceutical retailer and wholesaler GPC earlier in May.

“We are clearly on track to deliver our target of more than doubling 2015 healthcare services revenues by 2018,” CEO Nikoloz Gamkrelidze said in a statement.

GHG also positively reviewed the recent tax reforms that the Georgian government put in place for next year. Under the new rules, undistributed profits will no longer be subject to a 15% profit tax. The government has said that the new tax rules are designed to encourage companies to invest, giving the economy a boost. In the short-term, though, the new tax code will reduce government income.

“We expect this amendment to take effect for our healthcare services earnings on 1 January 2017, and this is expected to significantly reduce the Group’s effective tax rate from 2017 onwards,” Mr Gamkrelidze said.

The healthcare sector in Georgia has proven resilient during the current economic downturn. This economic slowdown, which has hit the entire Central Asia and South Caucasus region, forced Georgia’s lari currency to fall by 30% in the past 18 months and has slowed GDP growth.

Last November, GHG listed its shares on the London Stock Exchange.

BGEO Group, a London-based holding company that owns Bank of Georgia, owns a 65.07% stake in GHG.

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(News report from Issue No. 281, published on May 20 2016)

Turkmen President dishes out reprimands

MAY 17 2016 (The Conway Bulletin) – Turkmen President Kurbanguly Berdymukhamedov rounded up and publicly shamed several government officials, in another televised show of strength. Most notably, Mr Berdymukhamedov targeted the minister of public utilities and the vice-minister of transport. Myratniyaz Abilov, mayor of Ashgabat, received his second reprimand in three months. Mr Berdymukhamedov said he is unhappy with the progress of construction work on the upcoming Asian Indoor Games. Mr Berdymukhamedov generally dishes out reprimands when Turkmenistan’s economy has tightened.

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(News report from Issue No. 281, published on May 20 2016)

Uzbekistan opens language studies

MAY 13 2016 (The Conway Bulletin) – The Uzbek government opened the first state university devoted entirely to the study of Uzbek language and literature. The new university, named after Alisher Navoi, a 15th century linguist and poet, is located in Tashkent. The Uzbek government considers Uzbek language as part of its national brand and an important part of its nation building.

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(News report from Issue No. 281, published on May 20 2016)

Uzbek and Bulgarian oil companies open recycling plant

MAY 17 2016 (The Conway Bulletin) — Bulgarian oil company Prista and Uzbekistan’s Uzneftprodukt opened a new oil recycling plant in Angren, eastern Uzbekistan. The new plant will process 43,000 tonnes of used oil and produce 30,000 tonnes of fuel per year. The venture spent around $15m building the plant. Bulgarian PM Boyko Borisov travelled to Tashkent to take part in the inauguration ceremony.

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(News report from Issue No. 281, published on May 20 2016)

Germany to vote on Armenian genocide

MAY 17 2016 (The Conway Bulletin) – German lawmakers scheduled for June a vote on whether to label the mass killings of Armenians by Ottoman Turks in 1915 as a “genocide”, a move that will score a major victory for Armenian lobby groups. In a 2005 resolution, the German parliament fell short of calling the deaths a genocide. France, Italy and a handful of other European countries recognise the 1915 events as a genocide, which irritates Turkey.

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(News report from Issue No. 281, published on May 20 2016)

Tajik migration slows by 10%

MAY 18 2016 (The Conway Bulletin) – The Tajik ministry of labour said that outbound migration decreased by 10% in the first four months of 2016, compared to the same period last year. Around 200,000 Tajik labour migrants left the country in Jan.-April 2016. Around 87% of the migrants are men. Most of them head to Russia for work. Remittances from migrants are an important part of Tajikistan’s economy.

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(News report from Issue No. 281, published on May 20 2016)