Tag Archives: business

IFC and ADB issue lari-denominated bonds

FEB. 25 2015 (The Conway Bulletin) — Two major inter-governmental financial organisations — the Asian Development Bank and the International Finance Corporation (IFC) — have issued lari-denominated bonds for the first time.

The IFC, which is part of the World Bank, issued a 30m lari ($13.2m) bond with an initial yield of 6.924% and the Asian Development Bank issued a 100m lari ($44.2m) bond with a floating yield.

The idea behind the issues is to help boost the Georgian capital markets and to support small businesses.

In a statement, Pierre Van Peteghem, treasury of the Asian Development Bank said: “This bond — the largest by a foreign issuer — will provide a key market benchmark and could encourage more borrowers, both domestic and foreign, to tap the Georgian bond market.”

The ADB explained that profit from the bonds would be given to TBC Bank to lend out to small and medium sized enterprises.

And they need all the help they can get at the moment.

Like its neighbours in the South Caucasus, Georgia is struggling to deal with the fallout from the economic turbulence in Russia. Its lari currency is losing value, making lari-denominated bonds a risky investment.

Still, the drive by the IFC and the ADB to sell lari denominated bonds is a boost for the ailing currency. It also shows confidence in its future. It remains to be seen if the market also holds the same confidence in the lari currency.
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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 220, published on Feb. 25 2015)

Lithuania dairy exporters use Uzbekistan to skirt round Russia sanctions

MARCH 19 2015 (The Conway Bulletin) – Forced to look for alternative markets because of sanctions on Russia and war in Ukraine, Uzbekistan has become a major target for Lithuania’s dairy exports.

In December, dairy exports from Lithuania to Uzbekistan recorded a 19-fold increase compared to the same month in 2013, according to Russia’s Soyuzmoloko, a milk industry group.

Uzbekistan now represents over 12% of the Lithuanian dairy export market, becoming a key target for Lithuanian cheese and butter. Only Poland and Italy now import more dairy products from Lithuania.

Soyuzmoloko said there may be an alternative motive for sending products to Uzbekistan.
“Dairy products exported from Lithuania to Uzbekistan are then sent from Uzbekistan to Russia directly or via Kazakhstan, which is part of the Customs Union,” the Soyuzmoloko said in a note on its website.

The reference to the Customs Union is to an old Kremlin-led economic group. It is now called the Eurasian Economic Union.

While relations between Uzbekistan and the EU have been strained over the past few years because of rows over human rights abuses, Uzbekistan–Lithuania bilateral relations have been improving.

Last year, Lithuania’s foreign minister travelled to Tashkent for direct talks with his Uzbek counterpart.
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(News report from Issue No. 224, published on March 25 2015)

Tajik cotton exports increase

FEB. 18 2015 (The Conway Bulletin) — Tajikistan’s cotton exports, an important foreign currency earner, grew by 7% in January compared to a year earlier, local media reported. The increase bucks a trend of falling cotton exports from Tajikistan over the past few years. Extra revenue from the exports though are tempered by a global drop in cotton prices.
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(News report from Issue No. 220, published on Feb. 25 2015

Kyrgyzstan puts Jerooy up for sale

FEB. 20 2015 (The Conway Bulletin) — The Kyrgyz government said it was once again putting its second largest gold mine, Jerooy, up for sale by tender despite a failed attempt to sell it in 2013 for $300m. The Jerooy mine is also the subject of a $549m arbitration suit filed by its former owners, the Kazakh investment fund Visor Holdings.
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(News report from Issue No. 220, published on Feb. 25 2015)

Uzbekistan boosts gold production

FEB. 18 2015 (The Conway Bulletin) — Uzbekistan increased gold production in 2014 by 4.1% to 102 tonnes, media reported quoting the US Geological Survey. Gold is an important source of foreign cash for the Uzbek government. Uzbekistan is now the seventh largest gold producer in the world.
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(News report from Issue No. 220, published on Feb. 25 2015

Uzbekistan to send car parts to Brazil

FEB. 19 2015 (The Conway Bulletin) — A car plant factory in Uzbekistan has started producing parts for cars in Brazil, media reported. UzSungwoo is an Uzbek-Korean joint venture. It was set up to produce parts for GM’s plant in Uzbekistan. Demand has dropped at the GM plant because of an economic crisis, possibly triggering UzSungwoo to sell to Brazil.
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(News report from Issue No. 220, published on Feb. 25 2015)

Turkmenistan says it wants to boost gas output

FEB. 18 2015 (The Conway Bulletin) — Turkmenistan intends to increase production of gas in 2015 to around 80b cubic metres compared to 76b cubic metres in 2014, media reported quoting its energy ministry.

This is important because it underlines Turkmenistan’s determination to sell more gas to make up for the drop in prices.

Over the last few years Turkmenistan has built up its client base for gas and shifted itself into position as one of the region’s major gas suppliers.

Its main client is China but Europe, India and Pakistan are also clamouring to receive more gas.

News that Turkmen President Kurbangkuly Berdymukhamdov wants to increase gas production this year will be a boost for the proposed TAPI pipeline that is planned to run from Turkmenistan across Afghanistan to Pakistan and India and also for a potential pipeline to run under the Caspian Sea that will feed gas to Europe.
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(News report from Issue No. 220, published on Feb. 25 2015)

Output at BP’s ACG field falls

FEB. 19 2015 (The Conway Bulletin) — Bucking expectations BP said output from its Azeri-Chirag-Guneshli (ACG) oil field in Azerbaijan continued to fall in 2014. BP said oil output at ACG, which is essential to Azerbaijan’s overall output, fell to 31.5m tonnes in 2014 from 32.3m tonnes in 2013.
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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 220, published on Feb. 25 2015)

Kazakhstan cuts oil export tax

>>Slump in global oil prices triggers tax cut>>

FEB. 11 2015 (The Conway Bulletin) — Kazakhstan will slash its oil export duty by 25% to help companies manage a sharp drop in energy prices, economy minister Yerbolat Dossayev said.

The measure is part of a package of proposals designed to help Kazakhstan’s economy weather an increasingly nasty economic downturn. Energy minister Vladimir Shkolnik also said that taxes on miners would be cut soon.

Currently oil exporters pay $80 to ship a tonne of oil out of Kazakhstan. The government will cut this to $60.

It’s a drastic step for Kazakhstan which still relies heavily on oil exports for its revenue. Drastic but, possibly, unavoidable. Oil prices have halved in the past seven months, forcing spending cut backs and budget cuts.

The sharp drop in oil prices also creates another problem for Kazakhstan. It makes the more expensive projects, such as the Kashagan project in the Caspian Sea, unprofitable. Dropping export tax may go some way to addressing this problem.
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(News report from Issue No. 219, published on Feb. 18 2015)

Lukoil invests in Uzbekistan

FEB. 13 2015 (The Conway Bulletin) — Russian energy company LukOil said that along with a consortium headed by South Korea’s Hyundai Engineering it had won a contract to build a gas processing plant in the Kandym region of south Uzbekistan. LukOil did not say how much the project would cost but it did say that it was its largest investment in Uzbekistan.
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(News report from Issue No. 219, published on Feb. 18 2015)