Tag Archives: business

Gazprombank sells its Armenian subsidiary

OCT. 11 2016 (The Conway Bulletin) — Ardshinbank, one of Armenia’s top- three banks, bought Areximbank from Gazprombank, the financial arm of Russia’s giant gas company, for an undisclosed amount.

Areximbank was Armenia’s fifth- largest bank, according to local media and the buy-out will push Ardshinbank towards becoming the largest bank in Armenia. Its assets will grow by 20% to around 540b dram ($1.1b) after the deal. Karen Safaryan, a Russian billionaire businessman with Armenian roots, founded Ardshinbank in 2003 and remains its beneficial owner.

Analysts said that US sanctions against Gazprom and its subsidiaries and Armenian Central Bank requirements for commercial banks could be behind the buy-out.

In 2014, the Central Bank ordered banks to increase their minimum capital requirements by six times to 30b dram ($63m) by January 2017. The rule has prompted a round of mergers.

ENDS

(News report from Issue No. 300, published on Oct. 14 2016)

Kazakh oil service company loses money

OCT. 11 2016 (The Conway Bulletin) – Oil service companies owned by Kazakhstan’s Kazmunaigas posted a 12% drop in revenues over the past two years, mostly due to sustained low oil prices, Kazmunaigas chairman Sauat Mynbayev said. Mr Mynbayev said that this trend should have triggered layoffs, but under government mandate the companies will not cut jobs. Loss- making Ozenmunaigas will maintain 9,500 workers on its payroll.

ENDS

(News report from Issue No. 300, published on Oct. 14 2016)

Kazakhstan to extend visa-free travel

OCT. 11 2016 (The Conway Bulletin) – Kazakhstan will expand its visa-free regime next year, in an effort to boost tourism, the ministry of investment and development said. The new regulations will expand visa-free travel beyond the current 20 developed economies, to include all OECD countries from January 2017.

ENDS

(News report from Issue No. 300, published on Oct. 14 2016)

Trade between Georgia and S. Arabia rises

OCT. 11 2016 (The Conway Bulletin) – Trade turnover between Georgia and Saudi Arabia has increased, the two countries’ diplomatic corps said at a meeting in London. Saudi investment into Georgia reached $100m in the first nine months of the year and total trade turnover has doubled. Tourism is also on the rise, with visits from Saudi Arabia to Georgia likely to triple.

ENDS

(News report from Issue No. 300, published on Oct. 14 2016)

EBRD gives business loan to Turkmenistan

OCT. 7 2016 (The Conway Bulletin) – The EBRD gave a $560,000 loan to Taze Ay, a Turkmen meatpacker aiming to expand its production line by 25%. Located in the southern city of Mary, Taze Ay was founded in 2003 by a local family. Taiwan’s International Development and Cooperation fund will also contribute to the expansion of the factory with a $240,000 loan.

ENDS

(News report from Issue No. 300, published on Oct. 14 2016)

Radisson Blue to build in Kyrgyzstan

OCT. 4 2016 (The Conway Bulletin) – Brussels-based Rezidor Hotel Group said that its first Radisson Blu hotel in Kyrgyzstan will open in 2019. Rezidor has teamed up with local LLC Stability to build the hotel in central Bishkek. The Radisson Blu is Rezidor’s high-end hotel brand. In Central Asia and the South Caucasus, Radisson Blu hotels already operate in Astana, Tashkent, Yerevan and Tbilisi.

ENDS

(News report from Issue No. 299, published on Oct. 7 2016)

Azerbaijan’s Bank Standard files for bankruptcy

OCT. 6 2016 (The Conway Bulletin) – Bank Standard, one of the largest banks in Azerbaijan, filed for bankruptcy, delivering a sharp shock to the country’s banking sector which is trying to recover from a currency crisis.

The sight of Bank Standard, considered a stalwart of the high street since the mid-1990s, going bankrupt in Azerbaijan will worry ordinary Azerbaijanis who have already seen the manat collapse and other smaller banks disappear in a harsh economic downturn.

Azad Javadov, director of the Azerbaijan Deposits Insurance Fund, a government fund that insures people’s savings in banks, told media the government had tried to save Bank Standard.

“The state tried to normalise Bank Standard, but failed. It was decided to declare the bank bankrupt to prevent more loss,” he said.

Bank Standard has, effectively, been on life-support for some time receiving funds from the government which wanted to save the bank and protect its financial sector.

But like several other smaller banks which have filed for bankruptcy this year, Bank Standard couldn’t weather the financial storm generated since 2014 by a collapse in oil prices, a recession in Russia and the fall in value of emerging market currencies.

Part of the blame, some analysts have said, lies with the Azerbaijani government which imposed heavy capital requirements on banks in 2016.

A few days after Bank Standard declared bankruptcy, the Central Bank ordered its deposits be transferred to Muganbank, a mid-sized bank. Zaminbank, another small bank, was also declared bankrupt on Oct. 4.

ENDS

(News report from Issue No. 299, published on Oct. 7 2016)

Azerbaijan and Kazakhstan’s oil and gas

OCT. 7 2016 (The Conway Bulletin) – As shown in our charts this week, markets were upbeat, especially due to a steady increase in oil prices over the past two weeks, following a landmark agreement among the world’s top oil exporters.

OPEC, the exporters’ lobby group, decided to cut oil output by around 1.5% in an effort to put pressure on the US dollar and send oil prices higher.

This is OPEC’s first production cut in eight years, since the 2008 Global Financial Crisis. And the decision is an important one.

It marks a formal agreement between Saudi Arabia and Iran, whose diplomatic spats had been at the core of OPEC’s inability to decide in the past year.

It also has an important effect on countries around the Caspian Sea.

Azerbaijan has quickly eroded its reserve base, pumping its oil money into the budget to contain its currency crisis. This could have not lasted much longer. Now, if oil prices continue to float around $50/barrel, a good 20% higher than two months ago, transfers from the oil fund can slow down and the leadership can breathe.

Perhaps out of excitement from the impending re-start of Kashagan in the Caspian Sea, Kazakhstan is also rallying on higher oil prices, cutting interest rates and transfers from its oil fund into the budget.

Two caveats, however, are needed for Azerbaijan and Kazakhstan. First, don’t believe in any proposal from these two non- OPEC countries on freezing or cutting production. If their output falls it is because of economics.

Second, you need to wait until their mega projects, from Kashagan to Shah Deniz II, come online before making long-term assumptions on the energy might held by Kazakhstan and Azerbaijan.

ENDS

(News report from Issue No. 299, published on Oct. 7 2016)

With help from the EBRD, Georgia opens its first large wind farm

TBILISI, OCT. 6 2016 (The Conway Bulletin) — The Georgian government unveiled the 20.7MW Kartli Wind Farm, Georgia’s first large-scale wind farm which is considered a key milestone towards both boosting its power production and increasing its green energy footprint.

Kartli Wind Power Plant, a joint venture owned by the Georgian Energy Development Fund (GEDF) and Oil and Gas Company of Georgia, manages the project, which cost $34m to build. GEDF is part-owned by the EBRD, which loaned $22m for the project.

At the inauguration ceremony near the town of Gori in central Georgia, PM Giorgi Kvirikashvili lauded the project and highlighted its importance.

“This project is an indication that Georgia is becoming a truly developed country with leading technologies,” Mr Kvirikashvili said.

“This wind farm will enable us to partly meet our electricity demand during winter time.”

The government has pushed for the development of wind projects across the country to increase domestic production and limit the growth in imports during the winter months.

In the summer, Georgia exports its electricity surplus from its hydropower plants, mainly to Russia and Turkey.

The Kartli wind farm aims to reduce the winter gap and lower carbon emissions.

The EBRD also praised the project and said that it was ready to lend more funds to develop the country’s renewable energies.

“The EBRD stands ready to support Georgia in promoting renewable energy sources and this project confirms our determination to continue making significant investments in renewable energy,” Aida Sitdikova, EBRD’s regional director for Energy, said in a statement.

The Kartli Wind Farm is the biggest wind power project in the South Caucasus although Azerbaijan said it was considering erecting a wind farm in the Caspian Sea.

Power production has become a major headache for governments in the region as they try to feed electricity to growing populations and also replace aging Soviet infrastructure.

ENDS

(News report from Issue No. 299, published on Oct. 7 2016)

Stock market: Centerra Gold, Thompson Creek

OCT. 7 2016 (The Conway Bulletin) – Centerra Gold’s stock price has been on a rollercoaster this summer, closely following the ups and downs of the price of gold.

This week, both fell. Centerra contracted by 9% to 6.49 Canadian dollars and gold registered an unusual 5% fall to $1,254.38/troy ounce on Thursday. After a tense spring, when the Kyrgyz government and Centerra were at loggerheads over permits and court cases, calm now appears to reign. Importantly, though, this year Centerra has actively tried to diversify its portfolio away from Kyrgyzstan, investing in Turkey and in the US.

As part of the financing for the acquisition of Colorado-based Thompson Creek, Centerra issued new shares which analysts said will dilute the share that Kyrgyzaltyn, the government-owned gold miner, owns in Centerra from 32% to approximately 28.8%.

The deal, inked in July, put relations between the company and the government under strain once again.

ENDS

(News report from Issue No. 299, published on Oct. 7 2016)