Tag Archives: banking

Stock market: Tethys, Nostrum, KAZ Minerals, TBC Bank

SEPT. 3 2015 (The Conway Bulletin) – Shares in Toronto- and London listed Tethys Petroleum, whose focus is on oil and gas production and exploration in Central Asia, fell significantly after rival Nostrum on Aug. 28 cut a third off the value of an earlier buyout offer.

Tethys shares in Toronto fell by 20% and in London by 29.3%. Tethys responded by saying that it would honour the exclusivity agreement with Nostrum and then look to other companies for potential buyers.

Nostrum said that it had cut its offer after a new due diligence project showed that the original offer had overvalued the company.

In mining, shares in London-listed KAZ Minerals lost 14.2% of their value between Aug. 28 and Sept. 4, wiping gains from August’s devaluation.

KAZ Minerals used to be called Kazakhmys and is focused on copper production.

The Global Depositary Receipts (GDRs) of TBC Bank, which are traded in London, fell by around 8% over the week to $9.12, the lowest price to date for the bank.

TBC, which is the largest retail bank in Georgia and counts PM Irakli Garibashvili as a director, has been trading its GDRs in London since 2014.

The Georgian economy, like the rest of the region, has been dealing with the fallout from the slowdown in Russia’s economy. Georgia is also vulnerable to Greece, its second largest source of remittances. There was no particular news from TBC that would have pressures its GDRs.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Georgian MPs vote against veto

SEPT. 3 2015 (The Conway Bulletin) – Georgia’s parliament voted to overrule a veto by President Giorgi Margvelashvili that would have blocked the adoption of a controversial bill that stripped the Central Bank of its supervisory powers over the commercial banking sector. International organisations have criticised the bill as politically-motivated. The Central Bank has argued with the government over economic policy.

ENDS

(News report from Issue No. 246, published on Sept. 4 2015)

Kazakhstan’s Kazkom posts $231m loss

AUG. 28 2015 (The Conway Bulletin) – Kazkommertsbank, one of the largest banks in Kazakhstan, posted a net loss of almost 55b tenge ($231m) in the first half of 2015, due to costs associated with bad loans inherited from the takeover of troubled BTA bank.

Kazkommertsbank had to sell assets to guarantee provisions for its non-performing loans (NPL) portfolio, which increased after the takeover of BTA earlier this year. Analysts said at the time of the merger that political, rather than business, reasons had driven the Kazkommertsbank’s takeover of BTA Bank.

The latest earnings results follow a 55% fall in net profit in 2014, a drop also associated with the takeover of BTA Bank. Sabina Amangeldi, senior analyst at Halyk Finance, said that the high non-performing loan (NPL) ratio in Kazkommertsbank’s portfolio would continue to weigh on its earnings potential.

“NPL share and cost of risk, remain high and earnings quality is still low,” she wrote in a note.

NPLs now account for 14.5% of Kazkommertsbank’s loan portfolio.

Ms Amangeldi also highlighted the weak tenge as a potential problem for Kazkommertsbank, an issue that the bank also pointed out.

Kazkommertsbank said the impact of the Central Bank’s decision at the end of last month to remove the tenge from its US dollar peg was still unclear.

“At the present time it is impossible to determine the impact of [the new monetary policy] on the Kazakhstan economy and the banking system,” it said.

The value of the tenge collapsed by 23% after the dollar peg was withdrawn in August, the second major devaluation in the value of the Kazakh currency since Feb. 2014.

ENDS

(News report from Issue No. 246, published on Sept. 4 2015)

Georgian parliament passes banking law

JULY 17 2015 (The Conway Bulletin) – Georgia’s parliament passed a final reading of a bill that strips supervision of the country’s commercial banking sector from the Central Bank. The World Bank had urged the government to drop the bill. President Giorgi Margvelashvili now has to sign the bill into law although he has said he may veto it.

ENDS

(News report from Issue No. 241, published on July 23 2015)

Kazakhs issue sovereign debt

JULY 14 2015 (The Conway Bulletin) – In a move designed to plug a gap in it finances, Kazakhstan issued a $4b bond in two tranches.

These 10 and 30 year eurobonds with an initial yield of 3% and 3.5% over their US Treasuries equivalents were the second debt issued by Kazakhstan since October 2014, highlighting just how heavily a drop in oil prices had hit its budget.

And bond traders said that the yield, a measure of the risk factor attached to taking on the debt, had been relatively high.

“Remarkably, the placement yields are even higher than Russian sovereign bond yields,” Reuters quoted Alexey Bulgakov, a senior credit analyst at Sberbank, as saying.

Kazakhstan had not been active in the sovereign debt market since 2000, so two issues in the past nine months show how badly Kazakhstan needs the cash.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Kazakh Central Bank spends reserves

JULY 8 2015 (The Conway Bulletin) – Kazakhstan’s foreign currency reserves declined by 4.4% in the first half of 2015, data from the Central Bank showed. Kazakhstan, like other countries across the region, has been defending the value of its currency by spending its reserves.

ENDS

(News report from Issue No. 239, published on July 9 2015)

Rakishev buys another stake in Kazkommertsbank

JULY 3 2015 (The Conway Bulletin) – Kenes Rakishev bought an additional 2.61% stake in Kazkommertsbank from its founder and former chairman Nurzhan Subkhanberdin, further strengthening the Kazakh elite’s grip on one of the country’s largest banks.

The share purchase gives the 35-year-old Mr Rakishev, who is regarded as a trustee for more powerful members of the Kazakh elite and is best known for helping to buy a house in England from Prince Andrew in 2008, a 25.84% stake in the bank.

Samruk-Kazyna, Kazakhstan’s national welfare fund, owns 10.7% of the bank and an investment company called Alnair, which is also close to the Kazakh elite, owns a 28% stake in it.

The London-based Mr Subkhanberdin still controls around 32% of the bank but he has been gradually pushed out of Kazkommertsbank this year. His stake in the bank has dwindled and in March he was ousted as chairman.

Mr Subkhanberdin’s mistake had been to flirt with supporting Kazakhstan’s opposition.

In 2009 he wrote an open letter to Kazakh President Nursultan Nazarbayev questioning the imprisonment of the former head of the Kazakh uranium company Kazatomprom, Moukhtar Dzhakishev on various corruption charges.

Earlier this year, the Kazakh government, through Mr Rakishev, forced Kazkommertsbank to buy the debt-ridden BTA Bank.

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(News report from Issue No. 239, published on July 9 2015)

Kyrgyz Central Bank initiates capitalisation criteria

JULY 1 2015 (The Conway Bulletin) – Commercial banks in Kyrgyzstan’s need to meet a minimum capitalisation level, the Central Bank said, part of an ongoing process to professionalise the banking sector and protect it against another Global Financial Crisis. By 2017, commercial banks in Kyrgyzstan will need a working capital of nearly $10m.

ENDS

(News report from Issue No. 238, published on July 2 2015)

NPLs drop in Kazakhstan

JULY 1 2015 (The Conway Bulletin) – Kazakhstan’s Central Bank said the percentage of non-performing loans held by banks had fallen from a peak of 33% to 13% because of a combination of tax breaks and state financing. It’s unclear exactly how these measures helped to reduce non-performing loans.

ENDS

(News report from Issue No. 238, published on July 2 2015)

Kazakhstan to issue Eurobond, again

JUNE 24 2015 (The Conway Bulletin) – Kazakhstan will issue a £2b Eurobond, economy minister Yerbolat Dossayev told local media.

Mr Dossayev didn’t give specific dates for the issue but Reuters reported that Citigroup and JP Morgan are joint book- runners and Kazkommerts Securities and Halyk Finance are joint lead managers for the issue.

This is the second major dollar-denominated Eurobond that Kazakhstan has issued in the last year. In 2014, Kazakhstan issued a $2.5b Eurobond, its first since 2000.

Kazakhstan has been dealing with the fall out of a slide in global oil prices and a dip in the fortunes of Russia’s economy. Although the Central Bank has not stated just why it has borrowed so heavily in the past year, it is likely linked to this economic downturn.

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(News report from Issue No. 237, published on June 25 2015)