Category Archives: Uncategorised

Gazprom rises prices for Kyrgyzstan

MARCH 3 2016 (The Conway Bulletin) – Olga Lavrova, Gazprom Kyrgyzstan’s deputy director, said that the company had had to raise the price it charges to its Kyrgyz customers to match the devaluation of the Kyrgyz som. Gazprom, which bought Kyrgyzgaz in 2013 for a symbolic $1 plus debt, also said that it was still effectively subsidising the price of gas in Kyrgyzstan. Gas price rises are a sensitive issue in Central Asia and the South Caucasus.

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(News report from Issue No. 270, published on March 4 2016)

Turkcell submits bid for TeliaSonera’s Eurasian holdings

ALMATY, FEB. 26 2016, (The Conway Bulletin) — Turkcell, Turkey’s largest telecoms operator, said it had submitted a formal offer for TeliaSonera’s share in Fintur, a holding company that owns several stakes in telecoms operators across Central Asia and the South Caucasus.

TeliaSonera owns a 58.55% stake in Fintur. Turkcell owns the rest of the Netherlands-based company. Fintur, in turn, owns stakes in Azerbaijan Azercell, Georgia’s Geocell, Kazakhstan’s Kcell, Uzbekistan Ucell and Tajikistan’s Tcell.

If the sale goes through, the deal will reduce TeliaSonera’s exposure to the region. TeliaSonera will not, though, be able to walk away completely as the Swedish-Finnish company owns, directly and indirectly, 38% of Turkcell.

Other major Turkcell shareholders include Alfa Group and Cukurova Holding.

Many TeliaSonera shareholders had wanted the company to quit the region entirely after being accused of bribing senior officials in Uzbekistan for 3G licences nine years ago. The corruption investigation is ongoing.

In its statement, Turkcell also said it had submitted another offer for TeliaSonera’s directly owned 24% share in Kcell. If the two companies agree on the sale, Turkcell will own 75% in Kcell.

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(News report from Issue No. 270, published on March 4 2016)

Kazakhstan’s senate agrees new budget

MARCH 3 2016 (The Conway Bulletin) – Kazakhstan’s senate passed a new budget for 2016 that reported an increase in state spending, a plan designed to kick-start the economy. The government’s actual income from taxes will drop in 2016, it is forecasting, by around 8% but a lump of cash earmarked for various projects in 2017 will instead be injected into the system this year.

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(News report from Issue No. 270, published on March 4 2016)

Azerbaijan to sell electricity to Iran

FEB. 26 2016 (The Conway Bulletin) – Azerbaijan will start selling electricity to Iran by the end of March, media quoted its energy minister Shahin Mustafayev, as saying. The trade in electricity marks another step towards fully integrating Iran into the regional economy.

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(News report from Issue No. 270, published on March 4 2016)

Satybaldy invests in Kazakh IT and finance

FEB. 29 2016 (The Conway Bulletin) – Kairat Satybaldy’s new investment company Alatau Capital Invest, Baring Vostok Capital and Kaspi Bank signed a deal to co-invest in projects in Kazakhstan’s IT and finance sectors. Mr Satybaldy, President Nursultan Nazarbayev’s nephew, was the secretary of the ruling party Nur Otan until November 2015, when he became a shareholder in Kaspi Bank. Baring Vostok Capital is also a shareholder in Kaspi Bank.

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(News report from Issue No. 270, published on March 4 2016)

Stock market: KAZ Minerals

MARCH 4 2016 (The Conway Bulletin) — London-based miner KAZ Minerals has continued to rally after publishing its annual report at the end of February.

Since Feb. 1, its share price has gained 61% in the London Stock Exchange.

In the past week, equity researchers have increased their target price and their rating for KAZ Minerals, formerly known as Kazakhmys.

Copper prices have gone up in the past weeks and this has allowed the company to be more bullish in its forecast.

One sign of warning, however, comes from the strengthening tenge. The stability of the Kazakh currency at around 350/$1 over the past weeks confirms appears to suggest that it has founds an equilibrium.

This means that last year’s foreign currency gains for KAZ Minerals were a one-off boon and the company will have to rely solely on increased production if it wants to keep its growth rate.

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(News report from Issue No. 270, published on March 4 2016)

Tajikistan plans massive war games

MARCH 1 2016, DUSHANBE (The Conway Bulletin) — With governments in Central Asia increasingly worried about the Taliban, Tajikistan’s said that it will hold one of its largest ever military exercises with Russia, involving at least 50,000 soldiers.

Faridun Mahmadalizoda, a spokesman for the Tajik defence ministry, said that the military exercise will last from March 15-20 in the south of the country near the border with Afghanistan. Soldiers from the Russian military base in Tajikistan will take part in the war games, although the final number hasn’t yet been decided.

Both Russia and Tajikistan have warned of the increasing threat of the Taliban. Last year the Taliban briefly captured the town of Kunduz on the Afghan-Tajik border and this year there have been a number of reports of attacks on power lines running from Central Asia to Kabul. This is especially important as Central Asian states have committed to power and gas export projects to Pakistan and India which involve Afghanistan as a transit state.

And boosting the military is also a popular policy with ordinary Tajiks who worry about stability.

A 35 year-old accountant in Dushanbe said that Tajikistan should ensure stability at any price.

“The government wants to show the Taliban that we have an army, in case the terrorists want to cross the border,” he said, keeping his hands crossed on his chest.

A Dushanbe-based political analyst, who did not want to be named, told The Conway Bulletin’s correspondent in Dushanbe that Russia was pursuing a foreign policy in Central Asia based around boosting its military and playing up fears about renewed Taliban strength.

“The new exercises are first of all a signal to all superpowers that are interested in Central Asia about who exactly is the boss here,” he said.

“It’s also a signal to extremist groups, who have been thinking about moving across the (Afghan- Tajik) border onto the other side of the river in an act of war.”

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(News report from Issue No. 270, published on March 4 2016)

Russia’s Polymetal buys second gold mine in Armenia

MARCH 2 2016 (The Conway Bulletin) — Russian miner Polymetal bought the Kapan gold mine in Armenia from Canada’s Dundee Precious Metals, in a move that consolidates and expands its Armenian assets.

The deal, worth up to $50m, is Polymetal’s second acquisition in Armenia, after it bought the Lichkvaz gold mine last year for $13.2m.

Kapan, a medium-sized mine, located around 300km south of Yerevan, is surrounded by other gold reserves. Lichkvaz is 70km away from Kapan. According to the latest survey, it holds 16m tonnes of ore. Polymetal wants to make it a processing centre for its operations in Armenia.

“We believe Polymetal can transform Kapan from a low-margin asset into a capital-light profitable regional processing hub with sizable production” said Vitaly Nesis, Polymetal CEO.

Analysts agreed that the deal would bring major benefits to Polymetal’s Armenia operations.

“Polymetal bought Kapan to enable synergies with Lichkvaz. I think Polymetal will focus on developing these two mines first (before looking at others),” said Anna Mulholland, director of equity research for European metals at Deutsche Bank.

Dundee will receive $10m in cash and $15m in shares from Polymetal. Dundee is also entitled to receive a 2% royalty, capped at $25m.

Kapan produced 410,000 tonnes of ore in 2015, a 2% increase compared to 2014. Last year, Dundee said production at Kapan could rise to around 1m tonnes per year.

Polymetal’s operations are mostly concentrated in Russia. In May 2014, Polymetal bought the Kyzyl gold mine in Kazakhstan from Timur Kulibayev, son-in-law of President Nursultan Nazarbayev for $619m.

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(News report from Issue No. 270, published on March 4 2016)

Tajik President warns of droughts

MARCH 1 2016 (The Conway Bulletin) – Tajik President Emomali Rakhmon warned people that reservoirs in Tajikistan were low because of a relatively dry winter and that droughts were likely this summer. It’s unusual for Mr Rakhmon to give drought warnings. Tajikistan’s rivers feed downstream Turkmenistan and Uzbekistan, meaning that droughts would have knock-on consequences and could strain bilateral relations.

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(News report from Issue No. 270, published on March 4 2016)

Editorial: Kyrgyz, Kazakh inflation

MARCH 4 2016 (The Conway Bulletin) – Inflation is the next enemy for South Caucasus and Central Asian countries hit by the regional economic downturn.

A fall in commodity prices at the end of 2014 pushed down revenues in the extractive sectors and sent the Russian rouble into a downward spiral. This then hit the value of local currencies, hurting people’s confidence in their Central Banks and their pockets.

Then came a fall in vital workers’ remittances from Russia, down by up to 45%.

Now, inflation appears to be on the rise, as Kyrgyzstan’s Central Bank chief Tolkunbek Abdygulov has warned.

In Kazakhstan, inflation is already at 15.1% year-on-year to the end of February 2016. It has been warning about a surge in prices and salaries since it effectively devalued its currency in Aug. 2015.

A couple of days after the devaluation, the Kazakh Central Bank said it was now making inflation-busting its top target. There is a lot of work to do.

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(Editorial from Issue No. 270, published on March 4 2016)