Category Archives: Uncategorised

Markets: Central Bank reserves in Kazakhstan, Kyrgyzstan and Azerbaijan

SEPT. 9 2015 (The Conway Bulletin) — Perhaps the most important feature of news and data from the region’s money markets this week was details about the various Central Banks’ gold and currency reserves.

Kazakhstan’s Central Bank said it had increased its reserves in August to $29.1b. Kazakhstan has amassed reserves over the past 3 months after spending around $400m in April to contain the effects of the regional financial crisis.

In Kyrgyzstan, the Central Bank’s reserves hit $2b, according to the Central Bank, back up to the levels of August 2014.

In Baku it was another story. The Central Bank has been spending ferociously since it devalued its manat currency by a third in February. According to the state-linked Trend news agency, the Azerbaijani Central Bank spent 14% of its foreign currency reserves in August. In the last year, Azerbaijan has spent half its foreign currency reserves trying to defend the manat.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Tajik soft drink produces opens new factory

SEPT. 7 2015 (The Conway Bulletin) — Obi Zulol, a Tajik soft drink producer, opened a new, 3.7m somoni ($600,000) factory in Dushanbe. The company holds the licence to produce and sell brands from Canadian distributor Cott Corporation, such as RC Cola. This is Obi Zulol’s second soft drinks plant in Dushanbe.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Stock market: KAZ Minerals, Roxi, Centerra

SEPT. 11 2015 (The Conway Bulletin) — The biggest movers on the stock markets were copper producer KAZ Minerals which finished the week up 8%, Roxi Petroleum settled down 12% and Centerra Gold fell by 6.6%.

KAZ Minerals’ share price has fluctuated wildly, hit by China’s economic health and commodity prices. It is now trading at 162 pence, up from around 150 pence at the start of the week. It is sensitive to the value of the tenge which weakened by 10% this week and gave KAZ Minerals a lift.

Roxi Petroleum’s main oil assets are in Kazakhstan.

Its shares fell after it said it was having to downgrade the value of its assets by 28% in line with the fall in the tenge last month.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Kazakhstan may cut oil production

SEPT. 9 2015 (The Conway Bulletin) – If oil prices continue to fall, Kazakhstan may cut production back to 73m tonnes a year, media quoted deputy energy minister Uzakbai Karabalin as saying. Kazakhstan is projected to produce around 80m tonnes of oil this year. Oil is the main driver of the Kazakh economy.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Senior Uzbek official talks of corruption blight

SEPT. 8 2015 (The Conway Bulletin) – At a conference in Tashkent this week, Deputy Premier Rustam Azimov said corruption and extortion were among the hurdles that private entrepreneurs face in Uzbekistan.

This is important because it is rare for government officials to admit that corruption blights Uzbekistan and its officials.

“Businesses in Uzbekistan are today experiencing a lot of problems related to the illegal interference in entrepreneurial activity. There is excessive bureaucracy, as well as bribery and extortion,” media quoted him as saying. Mr Azimov was speaking at national conference on the security forces’ role in reforming and diversifying the economy.

A Tashkent-based analyst said Mr Azimov’s comments may be a signal the government was about to launch an anti-corruption purge.

It may also be a way of deflecting problems that have hit Uzbekistan. Remittances have fallen by half and inflation is rising. Most of these problems are regional and linked to a weak Russian economy and a fall in oil prices, but the Uzbek government will want to shift responsibility.

Transparency International, the global anti-corruption watchdog, ranks Uzbekistan as one of the worst countries in the world for corruption.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Georgian president signs banking law

SEPT. 10 2015 (The Conway Bulletin) – Georgian president Giorgi Margvelashvili signed into law a bill that switches supervision of commercial banks from the Central Bank to a state-linked body called the Financial Supervisory Body. Mr Margvelashvili tried to veto the switch but was blocked by parliament. Inter- governmental banks have criticised the switch and called it political.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Fitch warns Azerbaijani banks they are increasingly vulnerable

SEPT. 9 2015 (The Conway Bulletin) — The Fitch ratings agency warned investors of the precarious state of Azerbaijan’s banking sector.

Authorities in Azerbaijan have put a brave face on the country’s shaky economic conditions but the Fitch report cut through the bluster.

“We believe capital positions at some banks are likely to come under significant pressure over the medium term from increasing credit losses,” Fitch said. “Capital cushions are only moderate in most cases, and internal capital generation is limited.”

Azerbaijan depends on oil and gas for over 90% of its exports, meaning that it haPs been particularly exposed to the collapse in oil and gas prices. GDP growth is slated at the relatively low 1.5%.

In February, the Central Bank devalued the manat currency by a third denting its credibility. Despite the devaluation, fresh data has shown that the Central Bank has still spent billions defending its new value.

Non-performing loans are likely to grow from their current level of 10%, a consequence that Fitch sees inevitable, especially given the growing amount of loans and deposits denominated in foreign currency.

“We expect zero loan growth for the banking sector in 2015,” Fitch said. “Asset quality, already somewhat strained, with impaired loans averaging 10% at end-1H15 at Fitch-rated banks, is likely to deteriorate further.”

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

UN criticises press freedom in Azerbaijan

SEPT. 8 2015 (The Conway Bulletin) – The UN High Commissioner for Human Rights, Zeid Ra’ad al-Hussein, condemned Azerbaijan’s crackdown on media, the latest high profile institution to criticise Baku. On Sept. 1, a court in Baku jailed journalist Khadija Ismayilova for various financial crimes.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Despair hangs in the air in rural Azerbaijan

SHARABASH/Azerbaijan, SEPT. 11 2015 (The Conway Bulletin) — In northwest Azerbaijan, rain coated the mountain-ringed village of Sarabash with a glossy sheen. Walnut trees glistened and the smell of grass lifted up from the wet fields. It was 8am on a weekday morning but there were no signs of commerce or industry. Just silence.

Remote and cut-off, Sarabash was not connected to the rest of Azerbaijan by road until the 1970s. Today, the track is rock-strewn and rough and the villagers feel, once again, as though they have been forgotten.

The Soviet-era collective farming system, and their livelihoods, have collapsed. Baku and its environs may glow from a beautifying oil boom that has made Azerbaijan rich over the past decade but rural areas have been left behind. Sarabash feels forgotten.

Before the fall of the Soviet Union, collective farms did well up here. In the 1960s there were 40,000 cows and dozens of farming families.

The pair of crumbling statues that stand in the fields are testament to this. They represent the two shepherds who played a part in the village being given a Communist award in 1964. Since independence the villagers admit they have fallen on hard times. Only 40 people – and one shepherd – remain.

When the school principal, Migdav Sofiev, grimaced he revealed his full set of gold teeth. He shook his head and described the desolate state of the village.

“There are only seven children at the village school and when they leave, it will close,” he said.

By comparison the town of Qax lies just 45-minutes away from Sarabash. Throughout the summer there holidaymakers eat in garishly decorated restaurants while their children play in bowling alleys and on bouncy castles.

Over a glass of ayran, a thin, sour yogurt drink; some mountain honey; a disc of tandoor-baked bread, villagers said that despite the untouched mountain scenery it is extremely rare for foreigners to visit. Tourists are keener on the amenities in Qax and they don’t bother to come either.

A sense of resigned despair lingered over the breakfast table.

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(News report from Issue No. 247, published on Sept. 11 2015)

FDI jumps in Georgia by 82% in Q2 2015

SEPT. 9 2015, TBILISI (The Conway Bulletin) — Foreign direct investments, so vital for Georgia’s economy, jumped by 81% in the second quarter of this year compared to the same period in 2014, the statistics agency said.

The data showed that Georgia attracted investments worth $355m between April and June 2015, up from 196m in 2014 and also up from the 175m in the first quarter of this year.

But foreign investment inflows to Georgia have been volatile over the past few years. In the second half of last year, for example, Georgia attracted investment of over $1.2b although it has damped this year.

Geostat didn’t give a reason for the increase in foreign investment although it said that the single largest investor in the second quarter of the year was Azerbaijan.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)