DEC. 7 2015 (The Conway Bulletin) – In tenge terms, prices for new housing in Kazakhstan have risen on average by 12% in the year to the end of November, media reported quoting the national statistics agency. The rise is a reflection of the devaluation of the tenge and also of rising inflation. The tenge has lost around 40% in value this year.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 11 2015 (The Conway Bulletin) — Oil prices fell by almost 10% to under $40/barrel this week — its lowest price since 2009. This hit several of the region’s energy companies who were already dealing with a sharp slump in their share prices.
Tethys Petroleum closed at 4.38p on Thursday, down 2.7% in one week. Roxi Petroleum continued to decline, closing at 6.38p on Thursday, down 8.9% on the week. Nostrum Oil & Gas shares lost 3% to close at 369.5p.
Commodity companies were hit by the general downturn in the market and the news of giant miner Anglo American scaling down operations dramatically. Gold prices fell again by 2% this week, hitting $1,067/ounce.
This affected Kazakhstan-focused mining companies such as Central Asia Metals and KAZ Minerals, which lost 8.9% and 3.8% respectively this week. Kyrgyzstan-focused miner Centerra Gold surged 4%in the Toronto Stock Exchange to 7.94 Canadian dollars, against the trend of other companies, perhaps rallying on its positive results in the first three-quarters of the year.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 7 2015 (The Conway Bulletin) – The Manila-based Asian Development Bank approved a grant of $53.4m and an additional loan of $6.6m to Tajikistan to help it develop private businesses. The ADB said the grant was designed to bring in programmes that would reduce business costs as well as increase protection for small companies.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 7 2015 (The Conway Bulletin) — Georgian Water and Power (GWP) said it has started construction of a new hydropower plant near Tbilisi, part of a broader investment package designed to boost Georgia’s electricity generating capacity.
The Saguramo hydropower plant will cost 10.5m lari ($4.38m) to build and be operational by the end of 2016.
Importantly, it will feed its electricity straight into the Tbilisi power system.
And the timing of the start of construction at the Saguramo 4.4 megawatt plant was pertinent.
Only a couple of days earlier, Georgian energy minister Kakha Kaladze told media that he wanted to see a united energy market in the South Caucasus.
Georgia is deficient in energy and is currently negotiating with Russia to import more gas.
It has unveiled a large hydropower investment plan which at its centre has the much-delayed Nenskra dam in the northwest of Georgia. Nenskra will have a power generating capacity of 280 megawatts and cost $1b to build.
But Mr Kaladze appeared to suggest that he wanted to hedge his bets and develop a pan-South Caucasus energy market that also included Turkey and Russia.
“Taking into account existing and future projects, it is possible to connect the energy system of the South Caucasus and Georgia will be an energy bridge, ensuring the growth of exchange and trading of electricity,” he said.
So far, though, there has been a less than ecstatic response from the rest of the region, unsurprisingly given the fraught nature of most of the neighbours’ relations.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 10 2015 (The Conway Bulletin) – Remittances to Kyrgyzstan were 30% lower in the first 10 months of the year compared to the same period in 2014, said the head of the Central Bank, Tolkunbek Abdygulov. This shortfall, triggered by a recession in Russia and a fall in the value of the som, has blown a $400m hole in the national budget.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 9 2015 (The Conway Bulletin) — GM Uzbekistan posted a 47% fall in sales of cars to Russia in the first eleven months of the year. Only 18,753 cars manufactured by the General Motors-led joint venture with the Uzbek government were sold in the Russian market. In January-November last year, GM Uzbekistan sold over 35,000 cars to Russia. Russia is its most important market.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 9 2015 (The Conway Bulletin) -The Armenian-backed authorities in the disputed region of Nagorno- Karabakh accused Azerbaijani tanks of shelling its positions for the first time in nearly 20 years. Azerbaijan denied the accusation and said that the Armenian-backed rebels had been firing on their positions. Fighting around Nagorno-Karabakh has worsened over the past few years.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 9 2015 (The Conway Bulletin) – Foreign direct investment in Georgia, an important part of its economy, was 17% less in the first nine months of this year compared to the same period in 2014, the Georgian statistics agency said.
Georgia’s FDI rate has only just started to recover from the war against Russia in 2008 and the 2008/9 Global Financial Crisis.
In total, net inflow of investments in Georgia measured over $1b between January and September. And this net inflow has picked up pace throughout the year. In Q1 it measured $175m, in Q2 $355 and in Q3 $489m.
The transport and communications sector received by far the greatest volume of inflows with $218m invested in Q3. Construction has been up and down. For most of 2013 it recorded near zero FDI before recording large growth in 2014.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 7/10 2015 (The Conway Bulletin) – Ratings agencies Standard & Poor’s and Fitch said that worsening economic conditions in Kazakhstan threaten to generate bad debt that could drag down the banking sector.
The warnings add to the mounting analysis which suggest that the initial impact of low oil prices and a recession in Russia were underestimated. Last week the World Bank said that the Kazakh economy would grow by its lowest rate since the 1990s.
Specifically Standard & Poor’s downgraded the rating of Almaty-based Eurasian Bank to B from B+ because of an increase in its non- performing loan portfolio.
“The level of non-performing loans increased to 11.1% of total loans on Nov. 1, 2015 from 7.5% on Jan. 1, 2015,” it said in a statement.
Non-performing loans are those which are more than 90 days overdue.
After the Global Financial Crisis of 2008/9, Kazakhstan’s banks held portfolios with the largest proportion of non-performing loans in the world. It had managed to reduce this before the onset of the current economic malaise.
But the current economic problems have slowed this recovery.
Similarly to the World Bank last week, Fitch said the Kazakh economy would grow by just 1% this year.
“Medium-term prospects for Kazakhstan’s banking system have deteriorated in 2015 due to lower oil prices, the economic slowdown (especially in non-extractive sectors) and the weaker tenge,” it said in a statement.
Unlike the World Bank, though, it did say the recovery would be quicker and that the Kazakh economy would grow by 2.3% in 2015, compared to a World Bank estimate of 1.1%.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 7 2015 (The Conway Bulletin) – Georgia’s Central Bank chief Giorgi Kadagidze hinted at another interest rate rise to control inflation. He said inflation would peak next year before dropping back. At the start of last month, Georgia’s Central Bank increased its key interest rate by 0.5% to 7.5% — it’s highest level since 2011.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
