Tag Archives: business

Georgia signs new deal with Bitfury to develop property register

TBILISI, FEB. 8 2017 (The Conway Bulletin) — Georgia agreed to forge ahead with a plan to develop a property register using technology that supports the bitcoin virtual currency.

The deal is a gamble for Georgia, which wants to promote itself as a forward-looking and technologically savvy country as bitcoin has been largely discredited, partly because of its association with illegal activities.

The deal that Georgia has struck is an extension of a deal it entered into last year with Bitfury, which engineers the blockchain system used to trade bitcoins.

Although best-known for its association with bitcoin, Bitfury has engineered different uses for its blockchain system which effectively allows people to convert an asset into a certificate that can be traded digitally. The blockchain system takes its name from the technique of recording transactions across multiple computers, forming a chain that would be broken by any attempted fraud.

Papuna Ugrekhelidze, the chairman of the Georgian National Agency of Public Registry (NAPR), said that this was the first time that a national government had signed a deal to use Bitfury’s technology.

“The NAPR will use the world’s latest technology [to] guarantee safe transactions, transparency and flexibility. The process is electronic, in which human agents will not interfere, ensuring its security,” media quoted him as saying.

The deal represents a massive overhaul of Georgia’s property registration system and Mr Ugrekhelidze said that using Bitfury’s technology would reduce the cost of updating the register by 95%.

He didn’t give away any of the specifics of the contract that Bitfury has signed with Georgia.

This is the culmination of a process that started in April last year when Bitfury and Georgia began a trial process. Previously, in 2015, Bitfury said it would invest $100m into a technology park in Tbilisi. It also operates a data centre in Gori, 70km from Tbilisi.

ENDS

(News report from Issue No. 316, published on Feb. 10 2017)

Oil price drop hits Kazakh export value hard

FEB. 7 2017 (The Conway Bulletin) — The value of Kazakhstan’s exports fell by 20% in 2016, the Central Bank said, reflecting just how heavily the drop in oil prices has hit the country. It said that exports dropped to $37.2b. In 2016, the average price of a barrel of Brent oil was $42.80. In 2015 it had been $50.80. This year, oil prices have hovered around $55/barrel.

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(News report from Issue No. 316, published on Feb. 10 2017)

Uzbekistan wants to process all its raw cotton

FEB. 8 2017 (The Conway Bulletin) — Uzbekistan wants to process 100% of its raw cotton harvest by 2020, the fibre2fashion.com website reported, signifying a potential step-change in its cotton export strategy.

The fibre2fashion website said that Uzbekistan currently processed only 40% of its cotton harvest and that it would need an investment of

$2.2b to build the processing facilities needed to hit this target. Cotton is one of Uzbekistan’s biggest commodities but it has been stigmatised by its association with child labour. Many Western brands have refused to buy clothing that contains Uzbek cotton.

Over the past few years, though, the UN’s International Labour Organisation (ILO) has said the Uzbek authorities have reduced their reliance on child labour.

And constructing cotton processing plants would also create much needed jobs and help push rural Uzbekistan from a predominantly agrarian society towards a more industrialised one.

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(News report from Issue No. 316, published on Feb. 10 2017)

Armenia wants to buy jets from Russia

FEB. 7 2017 (The Conway Bulletin) — Armenia wants to buy between two and four Sukhoi Superjet-100s from Russia over the next couple of years, media reported quoting Russian industry minister Denis Manturov. The Sukhoi Superjet-100 is a Russian-made and designed passenger aircraft. It was released in 2008. Sukhoi, which is state-owned, has struggled to sell the aircraft, though, except to Russia’s allies. The Sukhoi Superjet-100’s first commercial flight was between Yerevan and Moscow in 2011.

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(News report from Issue No. 316, published on Feb. 10 2017)

EBRD heads to Uzbek capital

FEB. 6 2017 (The Conway Bulletin) — The European Bank for Reconstruction and Development (EBRD) sent its first mission to Tashkent to meet with officials from the new government of President Shavkat Mirziyoyev for the first time since Islam Karimov died in September, Reuters reported. Reuters suggested that this visit was important as it might signal renewed interest in investing in Uzbekistan by the EBRD.

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(News report from Issue No. 316, published on Feb. 10 2017)

Mobile subscriptions fall in Tajikistan

FEB. 10 2017 (The Conway Bulletin) — Mobile phone subscriptions in Tajikistan fell 22% in 2016 to 8.7m, the telecompaper.com website reported by quoting industry data. The drop is likely linked to the sharp economic downturn that has hit Tajikistan and its neighbours over the past couple of years. It relies heavily on Russia to power its economy but the Russian economy has tipped into a recession because of a fall in oil prices.

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(News report from Issue No. 316, published on Feb. 10 2017)

Fashion label opens factory in Georgia

FEB. 3 2017 (The Conway Bulletin) — Georgian fashion design company Materia has opened a new factory on the outskirts of Tbilisi that will hire 250 people to produce clothes for export to Switzerland, Australia, South Korea, Russia, Italy, China, Armenia, Kuwait, and Ukraine. The factory was funded by a 1.2m euro loan given the European Bank for Reconstruction and Development (EBRD).

ENDS

(News report from Issue No. 316, published on Feb. 10 2017)

$9.5m sock-making factory opens in northern Kyrgyzstan

BISHKEK, FEB. 4 2017 (The Conway Bulletin) — Kyrgyz sock-maker Textile Trans opened a new $9.5m factory in the Chui region of northern Kyrgyzstan, a rare example of manufacturing investment in one of the the former Soviet Union’s poorest countries.

Textile Trans said the factory would employ 150 people and that it would producewoollen socks and tights mainly for the local market.

PM Sooronbay Jeenbekov opened the factory. He said that it was going to give a boost to the whole country.

“This is a significant event not only for the Chuiregion, but for the whole country. With the opening of this enterprise we will decrease the dependence of Kyrgyzstan on imports of textile products in the form of fabric, which will reduce production costs for local garment manufacturers,” local media quoted him as saying.

A loan of $7.5m from the Russian- Kyrgyz Development Fund helped Textile Trans pay for the new factory. The Russian-Kyrgyz Development Fund was an organisation set up in 2015 by the Kremlin as a sweetener for Kyrgyzstan to join the Eurasian Economic Union.

And this sort of investment is important in Kyrgyzstan. Around 50% of its GDP is linked to fragile remittance flows from workers living abroad, mainly in Russia, and another 10% or so of the country’s wealth is derived from the Kumtor gold mine in the east of the country. This is owned by Centerra Gold, although the Kyrgyz government owns a 27% stake in the Toronto-listed company.

Analysts have been calling for Kyrgyzstan to diversify its economic base away from gold mining and labour exports, and news that Textile Trans has opened a new factory will be welcomed.

Tourism is another major potential revenue flow that Kyrgyzstan wants to tap into.

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(News report from Issue No. 316, published on Feb. 10 2017)

Stock market: Nostrum Oil and Gas

FEB. 10 2017 (The Conway Bulletin) — Nostrum Oil & Gas, the London- listed and Kazakhstan-focused, oil producer hit its lowest level since the beginning of the year on Feb. 9. On its main listing in London, Nostrum’s shares were valued at 436p.

Analysts have said that the drop, which has seen it tumble from a high of 475/$1 since Feb. 1, was linked to a general softening of oil prices rather than any news linked to the company itself.

Instead most analysts have given the company a ‘buy’ rating and raised their target prices. Last month Deutsche Bank, Numis Securities, GMP Securities and

Panmure Gordon all gave Nostrum a ‘buy’ rating and targeted share prices of 535p to 600p.

Credit Suisse downgraded its outlook for Nostrum to a ‘hold’ from a ‘buy’ and targeted a price of 415p to 440p.

At the end of last month, Nostrum said in its annual report that output had just about matched expectations and that it would realise savings in 2017 through a connection to the KTO pipeline.

“(This) will allow us to realise significant savings to exported crude oil transportation costs and continue to seek to reduce costs across the business,” it said.

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(News report from Issue No. 316, published on Feb. 10 2017)

Kazakh banking sector in bad shape, say IMF

FEB. 9 2017 (The Conway Bulletin) — Kazakhstan’s banking sector needs urgent care and attention if the country is going to be able to pull through an economic downturn that has destroyed growth and wiped out people’s ability to pay back loans. The IMF said that a large proportion of the banks’ loans and assets were linked to the construction sector which has been particularly hard hit. Kazakhstan’s Central Bank has said that it would be willing to use state funds to support banks.

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(News report from Issue No. 316, published on Feb. 10 2017)