Tag Archives: business

Fitch says Kazakhstan’s KKB-Halyk merger will be complicated

ALMATY, MARCH 10 2017 (The Conway Bulletin) — The Fitch ratings agency said that it doubted a proposed merger between Kazakhstan’s two largest banks, Halyk Bank and Kazkommertsbank, could be achieved as smoothly and as quickly as the authorities had suggested.

Instead Fitch said that the bad debt inherited by Kazkommertabank when it completed the purchase of BTA Bank in 2015 was likely to linger despite a promise by the Central Bank to buy it up. It said that a Central Bank fund had promised 2 trillion tenge to buy up bad debt but that this was still short of the 2.4 trillion bad debt pile that Kazkommertsbank currently holds.

“Fitch believes there is a material risk that KKB’s problem assets may not be fully removed from the bank’s balance sheet or adequately reserved prior to a transaction,” Fitch said.

“Halyk Bank’s capitalization could weaken significantly as a result of the acquisition of KKB.”

This is important as Fitch is the first major Western institution to speak out against plans revealed earlier this month to merge the two banks.

The merged bank will have a 38% market share of the Kazakh banking sector. It placed Halyk Bank on a negative watch.

ENDS

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

Trump’s problematic Azerbaijan hotel deal

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MARCH 8 2017 (The Conway Bulletin) — >> So what has Donald Trump, President of the United States, been doing in Azerbaijan?

>> Trump’s deals with Azerbaijanis have been getting him in trouble. Do you remember the dossier that a former British spy compiled on him last year, during the US presidential election? So incriminating were some of his discoveries about Trump’s alleged dealings with Russia and his potential for being blackmailed that the spy handed over the dossier to the US intelligence services. At the heart of these allegations was a visit that Trump made to Moscow in 2013 during the Miss Universe contest that he owns. There were some lewd allegations from that trip, too lewd to repeat in this family newspaper, but, and this is the point, the trip was set up by an Azerbaijani businessman, Araz Agalarov, with strong links in Russia.

>> Okay, but now I hear that there has been hotel project in Baku which is linked to Trump.

>> Yes, this is a different issue. Trump agreed to lend his brand to a hotel in a Baku suburb in 2012. This was before the US election and during a boom time for the Azerbaijani economy. It was a good place to invest. His daughter Ivanka visited the Tower in 2014 to make sure that the work was going to plan. While she was there, she also met with Trump’s Azerbaijani business partners, and this is where the trouble now lies for Trump. He either picked his business partners carelessly or, worse, was in some way complicit in various dodgy deals.

>> What do you mean? Who were his business partners for this Baku project?

>> Trump’s main business partner was Elton Mammadov, brother of Azerbaijan’s former powerful transport minister Ziya Mammadov who has various businesses, including in the hotel sector. The problem for Trump is that these businesses are alleged to be linked to corruption and also to dealings with Iran’s Republican Guard. This is illegal for Americans under US sanctions. Trump has vigorously denied any links to corruption or doing business with Iran.

>> What has Trump and his team done about this?

>> Before Christmas, Trump quietly cut his links to the unopened Baku hotel and last month, Azerbaijani president Ilham Aliyev sacked Ziya Mammadov as transport minister, although it is unclear if this was connected to the Baku hotel deal.

ENDS

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

ADB agrees $573m loan to Uzbekistan

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MARCH 6 2017 (The Conway Bulletin) — The Asian Development Bank agreed to give Uzbekistan a series of loans worth $573m in a deal that signifies that institutional lenders consider Uzbek president Shavkat Mirziyoyev worth doing business with. A $100m loan has been earmarked for small businesses in rural communities and another $121m loan has been put against developing Tashkent’s water supply.

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

Kazakh energy site pays fine

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MARCH 4 2017 (The Conway Bulletin) — The consortium developing the Karachaganak oil and gas site in northwest Kazakhstan paid a fine of 10.4m tenge ($32,800) because of an inventory error, media reported quoting the court in west Kazakhstan. It wasn’t specific about the inventory error. In a far bigger arbitration dispute playing out from last year, the Kazakh government has accused the Karachaganak consortium of withholding oil worth billions.

ENDS

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

Row hurts mobile users in Tajikistan

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MARCH 6 2017 (The Conway Bulletin) — Telecoms companies in Tajikistan have, according to local media, stopped taking payments via terminals because of a dispute over the commission that the terminal operators were charging. The row has meant that long queues of people waiting to top up their mobiles are snaking out of telecoms shops in Dushanbe and other cities.

ENDS

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

Georgians to enter EU on March 28

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MARCH 8 2017 (The Conway Bulletin) — Georgians will finally be allowed to travel to the EU for up to 90 days without a visa from March 28, Georgia’s foreign ministry said. Earlier this month, the EU had approved visa-free travel for Georgia and Ukraine to the 26- member Schengen Zone.

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

IFC to help cotton farmers in Uzbekistan

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MARCH 7 2017 (The Conway Bulletin) — The IFC, part of the World Bank, is developing a programme to help cotton growers in Uzbekistan produce better cotton, more efficiently and without forced labour, an industry website reported. Cotton is one of Uzbekistan’s key currency earners but its reputation has been dented over the past few years because of the use of child labour to pick cotton. Many Western brands have boycotted it. The IFC is trialling its programme across 12 farms. If it is successful, it will roll it out to 3,000.

ENDS

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

Fourth Turkmen pipeline to China is ‘cancelled’

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MARCH 6 2017 (The Conway Bulletin) — In a major blow to Turkmenistan’s ambitions to cements itself as the region’s top gas exporter, Uzbekistan and China cancelled planned work on a fourth pipeline that was to pump gas to Chinese consumers.

The so-called Line D was quietly dropped at the beginning of the month, media reported quoting a RIA-Novosti article. In the article, RIA-Novosti quoted unnamed officials as saying a drop in demand for gas in China meant that there was no need to build an expensive fourth pipeline from Turkmenistan.

A JV between China’s CNPC and Uzbekneftegas had been created in 2014 to build the 200km section of the pipeline through Uzbekistan. Work had been due to start in H1 2016 but had been pushed back.

For Turkmenistan, the cancelling of Line D, which hasn’t been officially confirmed by Ashgabat or Beijing, is bad news. It’s economy is reliant on gas exports, and with prices low, it is floundering.

ENDS

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

Trump’s opponents ask questions over Azerbaijan deal

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MARCH 8 2017 (The Conway Bulletin) — Opponents of US President Donald Trump verged on accusing him of corruption after they linked him to a hotel in Baku connected to Azerbaijani officials accused of taking bribes and of having links to the Iranian Revolutionary Guard.

A report by the New Yorker said the Trump International Hotel and Tower Baku was linked to Azerbaijan’s former transport minister Ziya Mammadov who has been linked to a business partner who does business with Iran’s Revolutionary Guard.

Some sanctions on dealing with Iran have been lifted but for US citizens it is still illegal to deal with Iran’s Revolutionary Guard, directly or indirectly

ENDS

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

Georgian wine producers tap into Chinese market

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TBILISI, MARCH 7 2017 (The Conway Bulletin) — Official data from Georgia showed that its wine producers exported 8.8m bottles of wine in January and February, nearly double the volume during the same period in 2016.

Wine is one of Georgia’s most important exports and the National Wine Agency said that the value of exports in January and February hit $20.5m. This puts Georgia on course for a record year and highlights the success of its export strategy. So successful has the marketing strategy become that rival winemaker Azerbaijan has pledged to mimic it.

Georgia’s wine industry has concentrated its efforts on breaking into new markets where drinkers are acquiring a taste for wine. Top of this list is China. Georgia sold nearly 832,000 bottles of wine to China in Jan. – Feb. and expects the Chinese market to become the second biggest, after Russia, by the end of the year, overtaking Ukraine.

The head of marketing at the Wine Agency, Irakli Cholobargia, said: “China as a market is one of the keys to drive volumes and serve as one of the alternatives to the Russian market on which we would like to be less dependent as far as unstable political relations are concerned.”

The boost in wine exports to China also vindicates advocates of a free-trade deal signed with China in Sept. 2016. Since then Georgian wine companies have signed a series of deals with Chinese companies, including a deal by Badagoni in Nov. 2016 to export 5m bottles of wine.

In 2016, Georgia’s overall exports rose by 38% to 50m bottles. Russia made up 27.2m of this total, Ukraine 8.8m and China 8.3m.

ENDS

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