Tag Archives: business

Passenger numbers are rising, says private Kazakh airline

FEB. 13 2017 (The Conway Bulletin) — SCAT, a privately-owned airline based in Shymkent in south Kazakhstan, increased its passenger numbers to 1.269m in 2016 up from 1.229m in 2015, media reported. The slight increase in passenger numbers, though, may mask a drop in relative demand, in-line with the poor economic conditions, because SCAT has increased the number of flights and routes it flies. SCAT mainly flies domestic routes, although it is adding more foreign destinations. In 2013, a SCAT plane crashed near Almaty killing 21 passengers and crew.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Stock market: KAZ Minerals, Georgia Healthcare

FEB. 17 2017 (The Conway Bulletin) — Georgia Healthcare’s shares surged 8.4% to near an all-time high of 379/$1 after earnings results showed that it had tripled its pretax profit in the fourth quarter of last year thanks to organic growth and acquisitions.

It also said that by the end of 2018, it expects to have doubled its revenues compared to 2015.

Long a favourite for investors looking to invest directly into the South Caucasus, Georgia Healthcare stock gives them a slice of the growing Georgian private healthcare sector.

The only downside of the earnings results was a pretax loss for its insurance division. Still, analysts were bullish. Jefferies increased its target price on Georgia Healthcare to 435p from 420p. Numis Securities stuck with its target price of 420p.

The other big mover of the week was KAZ Minerals, the Kazakhstan-focused copper producer, which finished up 5.7% at 559p. On Tuesday its shares had peaked at 592p, its highest level for nearly four years.

Copper prices have recovered since they started to fall in mid- 2015. KAZ Minerals also announced the start-up of new production in Kazakhstan.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Kazakhstan promises to prop up banks with $6.5b fund

ALMATY, FEB. 13 2017 (The Conway Bulletin) — The Kazakh government is preparing what would amount to a 2 trillion tenge ($6.5b) bailout of its banking sector only eight years after it was forced to buy up a handful of failing banks during the Global Financial Crisis of 2008/9.

The plan is a virtual admission that policies brought in by the Central Bank since the Global Finance Crisis have failed to prevent another banking meltdown.

The sharp economic downturn triggered by a collapse in oil price in mid-2014, has wiped out jobs, pressured inflation and knocked 50% off the value of the tenge. Despite being forced to increase their capital and pass Central Bank stress tests, the Kazakh banking sector has been hit badly and is now holding billions of dollars of bad debt.

Earlier this month, the IMF said that urgent action was needed to stave off another banking collapse. Now that warning appears to have been heeded by the Kazakh government after it announced the emergency plan.

In a statement on the finance ministry’s website, Bakhyt Sultanov, the finance minister, said that the government would pull in funds from the country’s oil wealth fund to plug the financial shortfall.

The Interfax news agency later reported by quoting the deputy governor of the Central Bank, Oleg Smolyakov, that the cash would be injected into the government’s Problem Loan Fund, through which it has been funnelling cash to banks.

The government has already doubled its loans to troubled banks to 400b tenge ($1.3b), half of which has been borrowed by Kazkommertsbank.

Kazkommertsbank bought the debt-laden BTA Bank in 2014/15 in a deal heavy with political undertones. It is now in talks with Halyk Bank, owned by President Nursultan Nazarbayev’s daughter Dinara and her husband Timur Kulibayev, to merge and create a banking giant.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Turkmenistan increases electricity production

FEB. 13 2017 (The Conway Bulletin) — Turkmenistan has increased its electricity production by 7.4% so far this year compared to the same period in 2016, media reported quoting government officials. This is important because Turkmenistan sees electricity as a second major export after gas and has been investing heavily in infrastructure. It has also said that it wants to export electricity along a route built adjacent to the TAPI pipeline that will pump gas to Pakistan and India. This will rival the World Bank-backed CASA-1000 electricity power line being built from Tajikistan and Kyrgyzstan.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Georgia Healthcare posts strong 2016 results

TBILISI, FEB. 16 2017 (The Conway Bulletin) — In its full year results, London-listed Georgia Healthcare said that revenue had risen by 75% and that the company was well- placed for more growth in 2017 and 2018.

The Tbilisi-based company, which is part-owned by Bank of Georgia, did say that results at its insurance business were worse than expected but this didn’t dampen investor enthusiasm for one of the Central Asia/South Caucasus region’s best- performing stocks.

The day after the results, Georgia Healthcare’s share price was up 6.3% at 379p (see Markets on page 12 for more information on Georgia Healthcare’s stock price).

Nikoloz Gamkrelidze, the Georgia Healthcare CEO, said in a statement that a combination of organic growth and acquisitions in the pharmacy and medicines distribution sectors had helped push up revenues to 426.4m lari ($161.5m) and to more than double net profit to 61.3m lari ($23.2m).

“The Group delivered a strong performance in 2016, and remains in good shape to benefit over the next few years from the combination of its position as the largest healthcare services provider, pharmaceuticals wholesaler and retailer and medical insurer in what continues to be a fast-growing, predominantly privately-owned, Georgian healthcare services market,” he said.

Georgia Healthcare listed on the London stock exchange in November 2015 for 170p. It is the largest private healthcare company in Georgia and now operates 13 regional clinics and 28 so-called express clinics. Acquisitions in 2016 in the competitive pharmacy sector has now given is a 29% share of this market.

The one blight on its 2016 results was in the insurance sector which lost 4.9m lari ($1.85m). Mr Gamkrelidze blamed a loss on one contract.

“Our medical insurance business had a more challenging year, particularly reflecting the loss- making impact of one large corporate insurance contract,” he said. “This contract has now expired and has not been renewed.”

Mr Gamkrelidze predicted that the Georgia Healthcare insurance unit will break even in 2017. It has a 35% share of Georgia’s medical insurance market.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Azerbaijan budget airline to fly to Moscow

FEB. 16 2017 (The Conway Bulletin) — AZALJet the budget airline belonging to Azerbaijan Airlines, known as AZAL, will start flying to Moscow’s Vnukovo airport from Ganja and Gabala, two Azerbaijani regional towns, media reported, a move that may be aimed at migrant workers as much as businessmen or tourists. AZALjet was founded in March 2016 and links Baku mainly to capitals of former Soviet states but also to many of Turkey’s biggest cities.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Oil output in Kazakhstan beats forecast

FEB. 13 2017 (The Conway Bulletin) — Kanat Bozumbayev, the Kazakh energy minister, told media that in 2016 Kazakhstan produced 78m tonnes of oil, beating an initial forecast of 75.5m tonnes. This is important because the government had been forecasting a drop in production because companies were throttling back output under the pressure of poor prices.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Iran considers setting up bank in Azerbaijan

FEB. 16 2017 (The Conway Bulletin) — Iran’s state-owned Bank Melli is considering spinning off its branches in Azerbaijan into an independent bank, Valiollah Seif, the Iranian Central Bank chief, told the Trend news agency.

If a new Iran-owned bank does emerge in Azerbaijan, it will mark a major watershed in relations between the two countries. These relations have improved markedly over the past couple of years, since Hassan Rouhani became Iran’s president in 2013. Under Mr Rouhani’s predecessor, Mahmoud Ahmadinejad, war had at times appeared likely.

In the interview, Mr Seif also said that he had held talks with this counterparts in Azerbaijan to set up a joint bank run by the two neighbours.

Azerbaijan’s banking sector has been roiled by an economic down- turn linked to a collapse in oil prices and it is likely that any move by Iran to set up a fully-owned bank in Azerbaijan will be driven by politics as much as by economics.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Kazakh oil project to double oil output

FEB. 13 2017 (The Conway Bulletin) — The Kashagan oil project in the Kazakh sector of the Caspian Sea will double oil production to 370,000 barrels of oil per day by the end of 2017, the North Caspian Operating Company consortium developing the project said in a statement. Kashagan is the Great White Hope of Kazakhstan’s oil industry. It started commercial production at the end of last year, three years behind schedule because pipes running from the mainland to the field were found to be leaky and needed to be repaired.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)f

Azerbaijan orders new locomotives

FEB. 15 2017 (The Conway Bulletin) — Azerbaijan has ordered 50 locomotives from French rail manufacturer Alstom for 276m euros, media reported quoting an Azerbaijani railways spokesperson. The loan for the locomotives was supplied by a consortium of French and British banks. The new locomotives will run along the Baku-Tbilisi-Kars railway that will be completed later this year.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)