Tag Archives: business

Azerbaijan oil exports via BTC fall 11.8%

JULY 5 2017 (The Bulletin) — Azerbaijan’s oil exports through the Baku-Tbilisi-Ceyhan pipeline (BTC) fell by 11.8% in the first half of 2017 compared to the same period last year to 13.174m tonnes, state-owned SOCAR said. This is significant as the BTC export route is Azerbaijan’s main thoroughfare for its oil, its most important commodity. No reason was given for the drop in oil exports.

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(News report from Issue No. 336, published on July 16 2017)

Armenian Lydian secures more support

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JULY 4 2017 (The Bulletin) — Armenian gold miner Lydian said that it had secured another $25m loan from the Orion and Resource Capital funds, specialist mining creditors, to help pay for the construction of its operations at its Amsular site in the south of the country. Earlier this year it also secured a $50m loan for funding on the same project from ING Bank. Armenia has been looking to boost mining projects.

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(News report from Issue No. 336, published on July 16 2017)

New hydro power plant opens in Georgia

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JULY 3 2017 (The Bulletin) — Adjaristsqali Georgia, a subsidiary of India’s Tata Power, said that it had completed the construction of the 186MW Shuakhevi Hydro Power Station in Georgia, one of the largest to be built in the last 50 years. Its finance partners for the project were the IFC (part of the World Bank) and Norway’s Clean Energy Invest. The project cost $420m to build and has been under construction since 2013. Speaking at the opening of the plant, Georgian PM Giorgi Kvirikashvili said that power produced by the plant would be sold during winter, when there is traditionally a deficit. Georgia has been heavily investing in its hydropower capacity.

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(News report from Issue No. 336, published on July 16 2017)

Uranium bank to open in August, says Kazakh President

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JULY 3 2017 (The Bulletin) — Kazakh president Nursultan Nazarbayev said that a low-enriched Uranium bank will open in eastern Kazakhstan on Aug. 29. The project is being administered by the International Atomic Energy Agency (IAEA) and is being promoted by Kazakh officials and Mr Nazarbayev as yet another contribution by Kazakhstan to world peace. On the day the uranium bank opens, Mr Nazarbayev intends to give out his first international award for nuclear disarmament. He already has his own peace award.

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(News report from Issue No. 336, published on July 16 2017)

Azerbaijan makes diversification plans

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JULY 11 2017 (The Bulletin) — Azerbaijan plans to set up a new textile champion that will generate 550 jobs and place the country at the heart of regional, if not global, garment production, the ministry of economy said in a statement. The ministry said that the textile park centre was planned for Mingachevir Industrial Park in the north-central area of the country, although it didn’t release any other details. Azerbaijan has been under pressure to diversify its economy away from oil and gas.

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(News report from Issue No. 336, published on July 16 2017)

Foreign investment climate in Georgia is worsening says business group

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TBILISI, JULY 3 2017 (The Bulletin) — The foreign investment climate in Georgia is deteriorating at a rapid rate because of the unscrupulous use of the courts, the influential Georgia International Chamber of Commerce (GICC) said in a statement after its AGM.

The GICC was careful to say that it thought that Georgia’s government was a positive influence on the business climate but that there were other forces and influences that were dragging it down.

“On the other hand (there is) a negative and destructive power represented by ‘uncontrolled elements’ from both in and out of state structures who do not report to the Head of Government and on whom government has no control,” it said in a statement.

Specifically, the IGCC said that unscrupulous officials, police and other officials “scam foreign businesses, expropriate them, steal their lands and their businesses.”

The criticism is a rare blow to Georgia’s reputation as a place to do business. It is more usually associated with positive criticism, relative to the rest of the region. The Georgian government has not responded.

Direct foreign investment is a vital inflow of cash for the Georgian economy. FDI measured $1.65b in 2016, double the inflow of 2010 but down on 2007 when inflows measured over $2b. A war with Russia in 2008 dented Georgia’s FDI pull.

The IGCC referenced fines handed out by a Tbilisi city court against Philip Morris, the US cigarette maker, and British American Tobacco this year as bias against foreign companies.

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(News report from Issue No. 336, published on July 16 2017)

Kazakhstan props up banks

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JULY 11 2017 (The Bulletin) — Kazakhstan is prepared to give up to 500b tenge ($1.52b) to its banks to help them weather an economic downturn that has piled their loan portfolios with bad debt, deputy central bank chief Oleg Smolyakov was quoted as saying. Kazakhstan’s bank have been listing worryingly after a collapse in oil prices in mid-2014 forced a sharp economic decline and the tenge to lose half its value.

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(News report from Issue No. 336, published on July 16 2017)

Kazakh authorities slap $27.4m tax fine against Kcell

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ALMATY, JULY 5 2017 (The Bulletin) — Kcell, the biggest Kazakh mobile operator, said that Kazakhstan’s tax authorities have handed it a 9b tenge fine ($27.4m) for unpaid taxes.

In response Kcell, majority owned by Swedish -Finnish operator Telia, said it would dispute the fine, setting up a potentially explosive court fight between a Western corporate and the Kazakh government.

“Following the audit (of our accounts for 2012-15), the tax authority has made a total claim of 9b tenge, of which 5.8b tenge is for unpaid taxes and 3.2b tenge represents fines and penalties for late payment. Kcell intends to dispute this claim through the available mechanisms, which includes court litigation,” Kcell said in a statement.

For both parties a lengthy court battle is poor timing. After a corruption scandal in Uzbekistan centred on paying the daughter of former Uzbek leader Islam Karimov for market access, Telia said it wants to exit the former Soviet Union. As well as its stake in Kcell, it plans to sell out of Uzbekistan Ucell, Azerbaijan’s Azercell, Moldova’s Moldcell and Georgia’s Geocell.

Kazakhstan wants to woo finance companies into setting up in Astana, where it is building an investment centre. Headlines highlighting rows will damage this drive.

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(News report from Issue No. 336, published on July 16 2017)

Stock market: KAZ Minerals, Georgia Healthcare

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JULY 16 2017 (The Bulletin) — In a rocky fortnight for stocks in Central Asia and the South Caucasus, only KAZ Minerals and Georgia Healthcare bucked the trend and returned growth. Both have had stellar years and are hitting all-time highs.

For KAZ Minerals, the Kazakhstan-focused copper producer formerly called Kazakhmys, production costs at its sites in north Kazakhstan have been lower than previously expected giving it greater margins. Copper prices have been fairly stable, trading in the $250 – $270 per lb corridor this year after a jump at the end of 2016.

For Georgia Healthcare, analysts have simply underestimated the profitability of the product that it was offering. This profitability may have been a motivating factor for London-listed BGEO Group, which owns a 57% stake in Georgia Healthcare, to tell investors that it was going to split into two companies. BGEO Group plans to hold the Georgia Healthcare stake, along with other assets, but it will spin off Bank of Georgia into its own London-listed company.

On the downside Nostrum was the biggest faller, shedding more than 15% of its price. It is now trading at below 430p for the first time since the end of March.

On Toronto’s stock exchange, Centerra Gold was down 6.3% to C$6.63, its lowest since the March.

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(News report from Issue No. 336, published on July 16 2017)

WB keeps lending to Azerbaijan

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JULY 6 2017 (The Bulletin) — The World Bank approved a plan to lend Azerbaijan just over $400m in 2017, Russia’s Interfax reported, to fund the construction of the Southern Gas Corridor that will pump gas to Europe from the Azerbaijani section of the Caspian Sea. Earlier this year, Azerbaijan quit the Oslo-based Extractive Industries Transparency Initiative (EITI), a move that some analysts had said may impact its ability to secure loans from major intergovernmental institutions.

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(News report from Issue No. 336, published on July 16 2017)