Tag Archives: business

World Bank mulls Tajik hydropower help

MAY 18 2016 (The Conway Bulletin) – The World Bank said it would consider funding the modernisation of the Nurek hydropower plant in central Tajikistan. Located 70km east of Dushanbe, the 3,000 MW plant at Nurek produces around 70% of Tajikistan’s total electricity output. Earlier in May, Tajik President Emomali Rakhmon said it needs an investment of more than 4.7bn somoni (around $600m).

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

Armenia to discuss Chinese drinks market

MAY 16 2016 (The Conway Bulletin) – The Armenian ministry of agriculture sent a delegation to China to discuss a trade agreement aimed at opening the potentially lucrative Chinese market to alcoholic drinks from Armenia. Armenian wine exports tripled in volume between 2008 and 2014 and Armenian brandy is revered in the FSU. Last year, in a reflection of the current economic downturn, volumes fell by 31.5%.

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

Azerbaijani and Georgian delegation to attend ceremony TAP construction start

MAY 17 2016 (The Conway Bulletin) – Azerbaijan and Georgia sent a delegation to Greece for the groundbreaking ceremony of the Trans Adriatic Pipeline (TAP), part of a network of pipelines that will pump gas from the Caspian Sea to Europe, in a show of support for a project that the European Union considers vitally important.

Georgia’s PM Giorgi Kvirikashvili and Azerbaijan’s deputy PM Yagub Eyyubov attended the inauguration event with Greek Prime Minister Alexis Tsipras, European Commissioner Maroš Šefčovič and Special Envoy at the US State Department Amos Hochstein.

“Georgia, as a transit country, reiterates its commitments to the diversification of energy supplies to Europe and expresses supports for existing and future energy projects connected to the Southern Gas Corridor,” Mr Kvirikashvili said.

The so-called Southern Gas Corridor, a network of pipelines, is scheduled to be completed in 2019 and will send 16b cubic metres of gas to Europe every year.

TAP will ship 10b cubic metres from Greece’s border with Turkey across the Adriatic Sea to Italy. From there it will be pumped to central Europe.

Mr Kvirikashvili said the project “creates a new dimension for economic cooperation and for the security in the region.”

Azerbaijan is an integral part of the project. The Corridor’s pipelines will be filled with gas from its major fields, chiefly Shah Deniz.

Azerbaijan is also invested in the construction and management of the pipelines. SOCAR, the state energy company, owns 20% of TAP. BP (20%), Snam (20%), Fluxys (16%), Enagas (16%) and Axpo (5%) consti- tute the remaining shareholders.

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

Editorial: European gas

MAY 20 2016 (The Conway Bulletin) – Construction work on the Trans-Adriatic Pipeline (TAP) has begun. It will link the Azerbaijani and Turkish sections of the so-called Southern Gas Corridor to Greece and Italy.

The Southern Gas Corridor is the EU and the US’ pet project and will bring Azerbaijani gas to Europe.

This is the culmination of years of planning and fending off rival projects, Russian and European.

But the fundamentals of the energy sector have changed dramatically in the past couple of years. The oil price collapse means that profit margins have dropped through the floor, making it near impossible to invest in major infrastructure projects.

That is unless you’re working on the Southern Gas Corridor. The point is not that the Southern Gas Corridor is more profitable than other pipelines, it isn’t, but that politics is more important than economics on this project.

The drivers of the project want to reduce Europe’s reliance on Russia for gas.

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

Telecoms tech boost in Kyrgyzstan

MAY 19 2016 (The Conway Bulletin) — Kyrgyz telecoms operator Sky Mobile said it has introduced 4G technology across Kyrgyzstan. Sky Mobile, which operates under the Beeline brand, is Kyrgyzstan’s second-largest mobile operator. In September last year, Kyrgyzstan rolled out 4G frequencies. Sky Mobile is a subsidiary of Russia-based and New York-listed Vimpelcom. In its quarterly results this month, it said that Kyrgyz were spending more on their mobiles.

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

Is Tajikistan preparing to unleash its Nashi?

MAY 20 2016 (The Conway Bulletin) — So, it’s becoming increasingly clear that the authorities in Tajikistan are using students to promote their causes.

Excellent reporting from our ‘Man in Dushanbe’ has exposed this practice. He has spoken to several students who have said their universities and teachers have forced them to either march in favour of government policies or demonstrate outside the embassies of countries which have irritated President Emomali Rakhmon by giving his enemies sanctuary.

This is a well-worn strategy in the former Soviet Union. When I was a correspondent in Moscow between 2006-9 I reported heavily on the growth of a youth group called Nashi and its various offshoots. Nashi was effectively a massive mobilisation of Russian youth, often whipped up into a frenzy to support various policies promoted by Vladimir Putin and Dmitri Medvedev, who was the Russian President at the time.

Their summer camps, set up in the dense forests of northern Russia, were an eye-opener. Pictures of opposition activists dressed up as prostitutes were placed around the site. In Moscow, Nashi rallies were rowdy affairs, nationalistic and with a violent undercurrent.

The movement in Tajikistan hasn’t reached these proportions yet and is less sophisticated but the authorities are still unleashing, while trying to control, the same forces.

It’s a crude, dangerous technique.

BANKING ISSUES

Sticking with Tajikistan, news that the country’s second largest bank has been placed under administration doesn’t come as a surprise. TSB has been listing heavily for a while. The strains on the Tajik economy have just become too great and it was only a matter of time before something gave. The important issue to monitor now is whether this is contagious and other Tajik banks also cave in.

It’s also important to keep the banking failure in context. The Tajik banking system may be weaker than its neighbours but all the Central Asian economies have been under the same pressures. Remittances from Russia have dried up, currencies have halved in value and GDP growth rates are being revised down. These banks were giving out soft loans for years and many of these will have turned bad.

If a bank in Tajikistan effectively says it doesn’t have any more money left, could banks in neighbouring Kyrgyzstan and Kazakhstan be experiencing the same problem?

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

Stock market: Georgia Healthcare Group

MAY 20 2016 (The Conway Bulletin) — London-listed Georgia Healthcare Group posted a perky 33% increase in revenues in Q1 2016, sending the Group’s share price up by 5.9% on May 17. In its brief history on the London Stock Exchange, GHG seems to have entered into its best period so far with share prices now firmly above £2. This week, it gained 16.7% to close at 231p on Thursday.

It had started trading in November 2015 at 170p/share, giving early investors a 35% return.

The company was also bullish about its acquisitions in Georgia’s healthcare market.

“We have just completed the acquisition of GPC one of the largest retail and wholesale pharmacy chains in Georgia,” GHG CEO Nikoloz Gamkrelidze said in a statement. “This acquisition supports our desire to be the leading integrated provider in all areas of the [Georgian] healthcare ecosystem.”

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

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)