Tag Archives: business

Two banks merge in Kazakhstan

MARCH 15 2017 (The Conway Bulletin) — Tengri Bank and Capital Bank Kazakhstan are to merge, they said in a statement, the first of what observers hope will be a series of mergers in the fragmented banking sector. Observers have said that there are too many small and undercapitalised banks and that the sector needs to consolidate. The merged bank will be the 17th largest in Kazakhstan and have a capital ratio of 19% which is more than double the minimum level, Tengri Bank and Capital Bank said.

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(News report from Issue No. 321, published on March 20 2017)

Turkmenistan Airline changes corporate structure

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MARCH 11 2017 (The Conway Bulletin) — Turkmenistan’s official press service said that the corporate structure of Turkmenistan Airlines had been changed to a open joint-stock company. Under the new structure, the government will own a 70% stake in the company, the aviation department within the ministry of transport will own 27% and Turkmenistan Airline will own 3%. It’s unclear why the corporate structure has been changed.

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(News report from Issue No. 321, published on March 20 2017)

Fitch says more banks in Azerbaijan are likely to fail before the end of the year

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MARCH 16 2017 (The Conway Bulletin) — Fitch the ratings agency said that more banks in Azerbaijan would fail this year as the economy continued to labour under the pressure of depressed oil prices and bad debts.

The Azerbaijani banking sector has been faltering, forcing a major investment by the government into its biggest bank — International Bank of Azerbaijan. It now owns 76.7% of the bank, up from 55%. Last year, several smaller banks had their licences removed or were forcibly merged.

“Fitch expects the banking sector to remain loss-making in 2017 and we have Negative Outlooks on most of the Azerbaijani banks we rate,” it said in a statement.

“Banks will not be able to absorb new NPLs (non-performing loans) through growth, given the sluggish economy and capital constraints.”

Importantly it also said that non- performing loans, those considered more than 90 days overdue, had increased to average 21% of the banks’ loan portfolio, up from 12% at the end of 2015.

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(News report from Issue No. 321, published on March 20 2017)

Kazakhstan breaks OPEC limit

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MARCH 13 2017 (The Conway Bulletin) — Kazakhstan produced more oil in February than it was supposed to under an OPEC-led deal in December aimed at cutting global production, official data showed. It produced 1.718m barrels of oil/day in February, a 2% rise from its output in January. This is 38,000 barrels of oil/day than it had agreed to. Oil prices have fallen on news that oil stockpiles were higher than thought.

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(News report from Issue No. 321, published on March 20 2017)

Azerbaijan’s SOFAZ to invest in real estate

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MARCH 10 2017 (The Conway Bulletin) — Azerbaijan’s state oil fund, SOFAZ, has investments worth $1.7b in foreign real estate deals, its press office told the Russian news agency Interfax. SOFAZ started investing in foreign property in 2012.

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(News report from Issue No. 320, published on March 13 2017)

Kazakh C.Bank loans Delta $31m

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MARCH 7 2017 (The Conway Bulletin) — As part of its well-publicised plan to help its struggling banking sector, the Kazakh Central Bank said that it had loaned Delta Bank, one of the smaller banks in Kazakhstan, 9.8b tenge ($31m), media reported. The loan, made on March 3, was linked to a missed coupon repayment that Delta Bank had needed to pay. This was connected to pension obligations.

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(News report from Issue No. 320, published on March 13 2017)

Rio-Tinto is planning investments in Kazakhstan, says official

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MARCH 9 2017 (The Conway Bulletin) — After a meeting with two senior officials from Rio Tinto at a trade fair in Toronto, Kazakhstan’s deputy minister for investment development, Timur Toktabayev, said that the mining company planned a couple of significant investments in the country. The British-Australian company is one of the biggest miners in the world but doesn’t currently have any projects in Kazakhstan. If it did start work on a project in Kazakhstan, it would give the country a major PR boost.

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(News report from Issue No. 320, published on March 13 2017)

Kazakh company to invest in Yurt tourism

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MARCH 10 2017 (The Conway Bulletin) — Baiterek Travel Center, a government-linked tourist development company, plans to invest around $2.8m building a yurt camp resort in the Zhambyl region of southern Kazakhstan, the Interfax news agency reported by quoting a source at the regional chamber of entrepreneurs. Kazakhstan has been looking to boost tourism numbers. Since 2014 it has scrapped visa requirements for visitors from dozens of Western countries.

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(News report from Issue No. 320, published on March 13 2017)

Kazakh bank posts improving results

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MARCH 10 2017 (The Conway Bulletin) — Halyk Bank, Kazakhstan’s second largest bank by assets, said its net income in 2016 was 9.2% higher than in 2015 at 131.2b tenge ($412m). Importantly, its Q4 net income was 32% higher in 2016 than the same period in 2015 and the proportion of loans considered to be bad, those more than 90 days overdue, had dropped to 10.2% by Dec. 31, from 11.5 % on Sept. 30. The data suggested that the economic downturn that has hit Kazakhstan is lifting. Last week, Halyk Bank confirmed it would merge with Kazkommertsbank.

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(News report from Issue No. 320, published on March 13 2017)

Stock market: Brent

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MARCH 8 2017 (The Conway Bulletin) — Governments across the Central Asia/South Caucasus region will be nervously watching the Brent spot price as it slips back down to that all-important $50/barrel level. This is the psychological breakpoint.

If Brent oil dips below $50/barrel, national budgets, which have just been adjusted upwards, will have to be rethought. It broke through this level in mid-December and had hovered around the $55/barrel mark since then, before taking a downturn.

Oil prices had been pushed up in mid-December by a plan lead by producers to cut output. Data, though, this week showed that crude oil stocks held by the US government have risen, raising concerns that the fragile coalition patched together to contain global production was cracking. Data from Saudi Arabia, Iraq and Nigeria also suggested that production was rising again.

Kazakhstan’s output estimate has also been increased. The US Energy Information Administration (EIA) said Kazakhstan would produce 1.88m barrels of oil/day in 2017, compared to an earlier estimate of 1.86m barrels/day. In 2016, it produced 1.73m barrels of oil/day.

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(News report from Issue No. 320, published on March 13 2017)