Tag Archives: business

Kazakh elite are winners from bank merger

MARCH 3 2017 (The Conway Bulletin) — By merging Kazkommertsbank with Halyk Bank, the Kazakh elite have completed their drive to control the country’s banking sector.

It’s been a long campaign but, for the Kazakh elite, one worth fighting and winning. If previously, the country’s banking sector had been troublesome, creating billionaires such as Mukhtar Ablyazov and Nurlan Subkhanberdin who didn’t necessarily want to go along with President Nursultan Nazarbayev’s vision for Kazakhstan, now they have full control.

The process to subjugate the banking sector started with the government’s purchase of BTA Bank in 2008/9 when it was on the brink of collapse. Next came the not-so-subtle takeover of Kazkommertsbank in 2014/15 and then its absorption of BTA Bank, and its mountain of bad debt.

And now we have the denouement.

Kazkommertsbank has apparently agreed to merge with, or perhaps more accurately – be taken over by, Halyk Bank. The first and second biggest banks in the country will create a mega-bank that will dominate the sector.

Halyk Bank is owned by Dinara Kulibayeva, President Nursultan Nazarbayev’s daughter, and her husband, Timur Kulibayev. Since 2015, the 37-year-old Kenes Rakishev, one of the Kazakh elite’s favourite businessmen has been the majority owner of Kazkommertsbank. Last year he also became its chairman.

And, as if to underline the elite/insider nature of the deal, the Kazakh Central Bank has given the deal its blessing, saying that it will provide the necessary funds to see it through, including buying up the bad debt that Kazkommertzbank inherited when it took over BTA Bank. In other words, expect the new bank to be in excellent health and to be fully compliant to the whims of the Kazakh elite.

This cements the elite’s control of Kazakh business and banking. Opposition forces will never have as much leverage, good or bad, as when Ablyazov controlled BTA Bank and Subkhanberdin controlled Kazkommertsbank.

The business acumen of the Kazkommertsbank-Halyk merger may not be obvious, but the political reasons are crystal clear.

ENDS

(News report from Issue No. 319, published on March 3 2017)

Armenia to produce Solar panel

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FEB. 24 2017 (The Conway Bulletin) — Armenia will start producing solar panels later this year under a government-sponsored scheme designed to give solar-power a boost in the country, media reported quoting Hayk Harutyunyan, the deputy energy infrastructure and natural resources minister. He said that 50 jobs will be created at the plant which will begin production in Q3 2017.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

BP cuts costs in Azerbaijan

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FEB. 21 2017 (The Conway Bulletin) — BP cut its costs in Azerbaijan by 17.8% in 2016, Azerbaijani media reported by quoting the British company. The cut in expenditure is probably a reflection of the drop in the price of oil and the need for energy companies to cut costs. Azerbaijan has been hard hit by the drop in oil prices, forcing it to reduce its budget and various social development programmes. BP is the biggest foreign investor in Azerbaijan and has helped to build up its energy sector since the 1991 collapse of the Soviet Union.

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(News report from Issue No. 318, published on Feb.24 2017)

Bank of Georgia revenue rises

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FEB. 24 2017 (The Conway Bulletin) — London-listed Bank of Georgia said in its full year 2016 results that its revenues had risen by 17.8% to over 1b lari. Analysts considered this a decent but not overly brilliant annual performance because of the drop in value of the lari, which fell 10.5% against the the US dollar in 2016.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Georgian businesses strive to meet new EU hygiene regulations

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TBILISI, FEB. 18 2017 (The Conway Bulletin) — Georgia’s National Food Agency said it had suspended operational licences for 11 meat businesses because they failed hygiene requirements set out under new rules imposed by the EU.

The suspensions show the complexities of trying to bring hygiene standards in Georgia up to EU requirements so that businesses can take advantage of a new deal brought in last year which allows Georgian companies to export directly to Europe.

The 11 business included three slaughterhouses, four meat whole- sale facilities, three catering facilities, and one farmers’ market. On top of that, 34 business operators were fined due to minor infringements.

In an interview with The Conway Bulletin, Kakha Sokhadze, deputy head food safety inspector at the National Food Agency, said many local businesses still need to adapt to the new regulations.

“Because of the obligations we have with the EU, we are increasing the number of inspections and the more you cover, the more you find cases of non-compliance. Business operators should understand that there are new rules and new requirements,” he said.

Last year the EU and Georgia signed an Association Agreement that paved the way for various producers to export goods to the EU. Georgian companies have already signed deals with European importers to send wool and honey.

And the deal with the EU is having a far-reaching impact in Georgia.

Even meat which is not being exported now has to comply with new rules aimed at boosting hygiene.

Various labelling requirements, for example, were brought in on Jan. 1.

To export to the EU, each food category needs to be certified, said Carlo Natale, deputy head of the EU’s delegation in Georgia.

“Each product is approved after several studies and measurements are made in the country of production,” he told the Conway Bulletin. “At the moment we are examining fish and its various types of process- ing. Then, we will examine dairy products. The last one will be beef and meat. They are the most difficult.”

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Italy moves olive trees for Azerbaijani gas pipeline

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FEB. 23 2017 (The Conway Bulletin) — The authorities in Italy have started moving 200 olive trees that stood in the way of the TAPI pipeline which is slated to pump gas from the Caspian Sea to Europe. Environmentalists had wanted the pipeline re-routed to save the trees but the pipeline’s backers said that this would delay Azerbaijani gas reaching Europe and also add millions of dollars to the cost. The authorities, in the end, decided it was simplest just to move the trees.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Textile production drops in Kyrgyzstan

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FEB. 23 2017 (The Conway Bulletin) — Textile production in Kyrgyzstan was 27% lower in January compared to the same period a year earlier, media reported quoting official statistics. This is important as it shows the impact of a downturn in the economy. Textile production, outside mining, is one of Kyrgyzstan’s main earners.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Tablet production increases in Armenia

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FEB. 18 2017 (The Conway Bulletin) — Armenia produced 2,012 tablet computers in 2016, up from 932 in 2015, media reported quoting the national statistics service. The US-Armenian joint-venture Technology and Science Dynamics Inc started making tablets in 2014 under a headline scheme designed to try to turn Armenia into something of tech-hub destination. Last year it also started producing smartphones.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Azerbaijan-Russia-Iran to hold talks on energy corridor

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FEB. 21 2017 (The Conway Bulletin) — Russia, Azerbaijan and Iran plan to meet up next month to discuss setting up a North-South energy corridor, Russian energy minister Alexander Novak was quoted by media as saying. This is important as regional governments have been talking about trying to build a North-South energy corridor for years. It would give gas and oil produced in Russia, Central Asia and the South Caucasus access to the Persian Gulf, and Iran much- needed energy supplies in the north of the country.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

BP’s oil production in Azerbaijan falls

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FEB. 21 2017 (The Conway Bulletin) — Oil output from BP’s projects in Azerbaijan, the mainstay of the country’s economy, fell to 630,000 barrels per day in 2016 from 634,000 in 2015, it said. This is bad news for Azerbaijan which is reliant on BP’s output to generate most of its income. Pres. Ilham Aliyev has personally extolled BP to boost production at its Azeri-Chirag- Guneshli fields.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)