SEPT. 5 2015 (The Conway Bulletin) – Turkmen president Kurbanguly Berdymukhamedov has approved a bill that will increase customs duties on sausages, fruit, vegetable, softs drinks and fruit juice and come into force on Oct. 1. Mr Berdymukhamedov has said he wants a policy of import substitution.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 11 2015, YEREVAN (The Conway Bulletin) — Russian gas monopoly Gazprom agreed to cut the price of gas it sells to Armenia by 12%, giving the Armenian government much needed economic breathing space.
The economic turmoil blowing through the former Soviet region has hit Armenia hard. Its dram currency has lost around 20% of its value and its economy is stalling.
Inflation is also rising and protesters have become increasingly agitated about utility price increases. Earlier this year, thousands of people demonstrated against proposed electricity price rises, eventually forcing the government into a climb-down.
Now Gazprom, which owns 100% of Armenia’s gas network, appears to have taken pity on Armenia.
Shushan Sardaryan, a spokeswoman for Gazprom Armenia, said that the new price was set at $165, down from $189, for 1,000 cubic metres of gas.
“The current price of natural gas was based on an exchange rate of $1 equalling 416 Armenian drams,” she told reporters. “But the exchange rate significantly differs from this level and the fluctuations damaged the company.”
The dram is now hovering at around 480 against the US dollar.
Ms Sardaryan also made the point that although Russia had reduced the cost of its gas to Armenia, this price reduction would not be passed on to consumers.
Instead, the saving would be made by the government. Armenia has also floated the idea of pricing its gas in roubles, rather than US dollars, a move which would, in theory, protect it from price rises linked to the devaluation of its dram currency.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 9 2015 (The Conway Bulletin) — Car-maker GM Uzbekistan’s sales to Russia in Jan.-Aug. fell by 53% compared to the same period last year, it said. GM Uzbekistan is a joint venture between General Motors and the Uzbek government. It sold 13,752 cars to Russia in Jan.-Aug.
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(News report from Issue No. 247, published on Sept. 11 2015)
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.
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(News report from Issue No. 247, published on Sept. 11 2015)
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.
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(News report from Issue No. 247, published on Sept. 11 2015)
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.
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(News report from Issue No. 247, published on Sept. 11 2015)
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.
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(News report from Issue No. 247, published on Sept. 11 2015)
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.”
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(News report from Issue No. 247, published on Sept. 11 2015)
ALMATY, SEPT. 4 2015 (The Conway Bulletin) — Japanese car-maker Honda has decided to quit the Kazakh and the Russian markets until economic conditions improve, media reported.
Honda’s final shipment of cars to Kazakhstan was at the start of 2015 and to Russia in Dec. 2014.
The fall in value of currencies and the collapse in the car market had forced Honda to leave.
Weak local currencies have pushed up prices of imported cars.
A Honda spokesperson denied that the company was quitting the former Soviet Union altogether.
“We think the market has potential in the future so we’re not pulling out,” she told the FT. “We can respond flexibly since we don’t have a plant in Russia.”
Honda car sales in Kazakhstan fell by around 50% in 2015. In Russia, they shrank by 78%.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 4 2015 (The Conway Bulletin) — London-listed Roxi Petroleum said it had downgraded the value of its assets in Kazakhstan by 28% after last month’s devaluation of the tenge. Roxi’s main activities are focused in the Mangistau region, west Kazakhstan. Since the announcement, Roxi’s share price has fallen by 12%.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 247, published on Sept. 11 2015)
