Tag Archives: business

Turkish cuts flights to Tajik and Kyrgyz cities

NOV. 8 2016 (The Conway Bulletin) — Turkish Airlines, Turkey’s flagship carrier, dropped Osh, Kyrgyzstan’s second-largest city, and Khujand, a major city in northern Tajikistan, as destinations in a global revision of its connections. Turkish said it was suspending flights to 22 destinations and making around 30 aircrafts redundant in an effort to focus only on profitable routes.

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(News report from Issue No. 304, published on Nov. 11 2016)

China’s CITIC Bank buys 60% stake in Kazakhstan’s Altyn Bank

ALMATY, NOV. 4 2016 (The Conway Bulletin) — Halyk Bank, one of Kazakhstan’s biggest lenders, said it will sell a 60% stake in its subsidiary, Altyn Bank, to China’s CITIC Bank at the start of next year, China’s most significant investment in the Kazakh banking sector.

The parties did not disclose the cost of the transaction, but experts believe it could be around $300m.

“The valuation of Altyn’s current assets as of September 30 is 316b tenge ($929m) and we can expect an increase in the bank’s activity in Q4. After premiums and non-performing loans discounts, the final figure could be around $300m,” Rasul Rysmambetov, director of the Public Fund Financial Freedom, told the Kursiv newspaper.

Altyn Bank is the successor of HSBC Kazakhstan that Halyk Bank bought in March 2014 for $176m.

China already owns Bank of China in Kazakhstan and Industrial and Commercial Bank of China in Almaty, two small-sized lenders founded in 1993. Owning Altyn Bank will boost its presence and could help the bank grow trade with China.

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(News report from Issue No. 304, published on Nov. 11 2016)

Kazakhstan to subsidise mortgages

ALMATY, NOV. 8 2016 (The Conway Bulletin) — The Kazakh government will gives subsidies of 15m tenge ($43,455) to mortgages for new homes, Marat Idryshev, head of the Association of Kazakh Constructors said, part of President Nursultan Nazarbayev’s plan to breathe life into Kazakhstan’s flatlining economy.

Mr Nazarbayev announced the Nurly Zher programme in September, the name means Bright Land in Kazakh, a few months after a series of unprecedented anti- government protests focused on mortgages and land ownership showed just how frustrated ordinary Kazakhs were with the state of the economy.

Precise details of the $1.3b plan to re-energise Kazakhstan’s construction sector have been thin, so Mr Idryshev’s comments are important. He said that the mortgage market was severely undernourished in Kazakhstan.

“Today the proportion of mortgages given by commercial banks in Kazakhstan is no higher than 5%,” he told media. “In Russia it is 50-70%, a world standard. We will act in accordance with the experience of our neighbours. The government will subsidise mortgages.”

The subsidy should, Mr Idtzhev said, bring interest on mortgages down to around 10% from 17%.

The collapse of the tenge last year made it difficult for mortgage holders to pay back their loans. Almaty-based economist Zharas Akhmetov said the plan should dampen growing tension.

“This, firstly, will support the housing market. Secondly, this will remove tension in society,” he told the Bulletin. “One of the drivers of economic growth is construction, and not only construction of houses but also roads and industrial objects.”

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(News report from Issue No. 304, published on Nov. 11 2016)

Georgia to import gas from Iran

NOV. 6 2016 (The Conway Bulletin) — The directors of the National Iranian Gas Exports Company (NIGEC) and the Georgian International Energy Corporation (GIEC) met to define terms of a supply deal they made in July. NIGEC agreed to sell 40m cubic metres of gas to GIEC in the second half of 2016. GIEC is a subsidiary of Georgian Industrial Group.

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(News report from Issue No. 304, published on Nov. 11 2016)

Kyrgyzstan-based Centerra increases profit but still can’t access Kumtor’s cashpile

BISHKEK, NOV. 7 2016 (The Conway Bulletin) — Canadian mining company Centerra Gold, owner of the Kumtor mine in Kyrgyzstan, reported a profitable Q3 for the first time in five years because it had cut costs and processed higher grade, and more valuable, gold but said it is still unable to access cash held in the company’s bank account.

Also, in the first nine months of 2016 the company turned a profit of $87.9m, compared to $44.5m in the same period last year. Centerra also revised upwards by 7% its yearly production guidance to 520,000 – 560,000 ounces. This is important because Kumtor is the single biggest economic asset in Kyrgyzstan, delivering around 10% of its total GDP.

But Centerra, which is 32% owned by the Kyrgyz government, also said that Bishkek’s Supreme Court rejected its appeal in October against a freeze of Kumtor’s bank account. Importantly, the Supreme Court’s decision came just one day after Centerra finalised the buyout of Canada’s Thompson Creek, which Kyrgyz lawmakers had fiercely opposed.

A Bishkek Court has frozen Kumtor’s bank accounts since June because of an unpaid environmental fine. Centerra has said the fine is politically motivated. The two sides have been locked in a row over ownership of the Kumtor gold mine.

CEO Scott Perry said the ongoing spat meant Centerra could not pay a dividend this quarter and hinted it may have to raise external finance.

“Absent access to cash held by KGC (Kumtor), the Company expects that it will be required to raise financing in order to fund construction and development expenditures on its development properties or to defer such expenditures,” he said in Centerra’s statement. The Kyrgyz government has not commented.

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(News report from Issue No. 304, published on Nov. 11 2016)

Tajik President opens new steel plant

NOV. 5 2016 (The Conway Bulletin) — Tajik President Emomali Rakhmon inaugurated a new steel plant in the city of Hisor, in western Tajikistan. The plant, which cost 250m somoni ($31.8m) to build, will produce between 100,000 and 200,000 tonnes of steel and other metals. Faroz, a construction company, will be the plant’s main customer.

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(News report from Issue No. 304, published on Nov. 11 2016)

Kazakh government approves uranium bank

NOV. 2 2016 (The Conway Bulletin) — Kazakhstan’s Parliament approved a law to establish an International Atomic Energy Agency-sponsored low-enriched uranium fuel bank in the country. For years, Kazakhstan lobbied the Agency to establish a nuclear fuel bank in its territory, as a testimony of the country’s efforts to combat nuclear proliferation. Kazakhstan is the world’s largest producer of uranium.

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(News report from Issue No. 303, published on Nov. 4 2016)

KAZ Minerals posts strong Q3

OCT. 28 2016 (The Conway Bulletin) — Kazakhstan-focused copper miner KAZ Minerals posted a strong Q3 operational report, more than tripling production compared to the same period last year, mainly due to the coming online of the Aktogay and Bozshakol projects.

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(News report from Issue No. 303, published on Nov. 4 2016)

Russia threatens Tajikistan over flights

NOV. 3 2016 (The Conway Bulletin) — Russia could suspend flight connections with Tajikistan next week, if the countries fail to reach an agreement on flights originating from the new Zhukovsky airport in Moscow, TASS quoted unnamed Russian government sources as saying. Tajikistan’s Aviation Committee had refused to grant permission to companies that operated out of Zhukovsky. Delegations from both governments met in Kyrgyzstan to negotiate a deal, but failed to reach an agreement.

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(News report from Issue No. 303, published on Nov. 4 2016)

Armenian airline to compete with Russian

NOV. 1 2016 (The Conway Bulletin) — The newly-established Armenia carrier said it is ready to compete with the low-cost Russian company Pobeda, which started flights linking Armenia to Moscow and Rostov-on-Don. Armenia’s CEO, Robert Hovhannisyan, said that his company will fly from the more central Yerevan airport, which will give the local carrier a competitive advantage on Pobeda, which flies to and from Gyumri, Armenia’s second city. Pobeda is a low-cost subsidiary of Russia’s Aeroflot.

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(News report from Issue No. 303, published on Nov. 4 2016)