Tag Archives: business

Stock market: Tethys, Nostrum

JUNE 17 2016 (The Conway Bulletin) – Central Asia and South Caucasus-linked stocks fell this week, driven down by lower oil prices. As shown in the table, Tethys and Nostrum shares dropped significantly over the past week after a rather stable month.

Roxi, on the other hand, moved against the tide, gaining 15.3% in one week.

On June 14, the company’s non-executive director Edmund Limerick purchased 500,000 shares at 9.8p/share, for a total of £49,000. Mr Limerick and his wife now own 1.15m shares, or 0.12% of the company, up from 0.07% before the purchase.

The deal pushed up the share price, giving it a boost after weeks of downward pressure.

Kuat Oraziman, CEO, and Kairat Satylganov,CFO and director, own Roxi, which operates in Western Kazakhstan, not far from the massive Tengiz oilfield.

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(News report from Issue No. 285, published on June 17 2016)

Business comment: Gold in Central Asia

JUNE 17 2016 (The Conway Bulletin) – Gold prices climbing up towards $1,300/ounce, but not everyone in the mining sector in Central Asia is happy.

In Kazakhstan, Russian miner Polymetal received a much-needed lifeline from Sberbank to push forward with its Kyzyl project in north-eastern Kazakhstan. The gold sector in Kazakhstan is enjoying a positive season, as production numbers in the country are up 3.7% to 13 tonnes of fine gold in the first five months of the year, compared to Jan.-May 2015.

The steady growth is paired with increased investment, as Polymetal is focusing its growth outside Russia on Kazakhstan and Armenia.

But this year has not brought only good news in Kazakhstan. In March, Alhambra Resources said it was seeking damages against Kazakhstan’s government, via the World Bank’s International Centre for Settlement of Investment Disputes, for the bankruptcy of its Kazakh subsidiary.

Recovering commodity prices, however, can do little to improve the mood in Kyrgyzstan, where Centerra Gold and the government are increasingly entangled in what could become a decisive legal battle.

Centerra sought the resolution of the continuous fines and corruption probes at the Stockholm court of arbitration.

The Kyrgyz government responded with more fines and charged a former director of Kyrgyzaltyn — which owns a stake in Centerra — of taking bribes from the Canadian miner.

These charges, fuelled by allegations from a former Centerra director, would make the Canadian company guilty of paying bribes, serving an order to the government, which is trying hard to show Centerra under a bad light.

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(News report from Issue No. 285, published on June 17 2016)

Tajikistan’s TSB resumes transactions

JUNE 10 2016 (The Conway Bulletin) – Tojiksodirotbonk, Tajikistan’s second largest lender, said it resumed money transfer transactions, and that it continued to operate under the administration of the Central Bank. TSB, as it is commonly known, is awaiting confirmation from the EBRD for a funding lifeline of around $165m. The investment would give the EBRD a 25% stake in the bank.

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(News report from Issue No. 285, published on June 17 2016)

Kazakh airline to prepare an IPO

JUNE 16 2016 (The Conway Bulletin) – Peter Foster, CEO of Kazakhstan’s flagship airline Air Astana, said the company will seek financial advisors this autumn to prepare an IPO in 2018. Mr Foster said that the company will list in Kazakhstan and in other more liquid markets, such as London or Singapore. Britain’s BAE Systems owns 49% of Air Astana, Kazakhstan’s sovereign wealth fund Samruk-Kazyna owns 51%.

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(News report from Issue No. 285, published on June 17 2016)

Azerbaijan makes bank deal with Iran

JUNE 14 2016 (The Conway Bulletin) – Azerbaijan and Iran will launch their first joint bank next year, the countries’ central bankers told media. Elman Rustamov, Azerbaijan’s Central Bank chief, visited his Iranian counterpart Valiollah Seif in Tehran. Both laid the groundwork for the establishment of a new bank, a sign of the growing cooperation in the financial sector.

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(News report from Issue No. 285, published on June 17 2016)

Uber starts operating in Kazakh capital, challenging gypsy cab system

ALMATY, JUNE 10 2016 (The Conway Bulletin) — Uber started operations in Astana, posing a major challenge to Kazakhstan’s taxi industry which, like much of the rest of the former Soviet Union, has been based on an informal gypsy cab system for generations.

But the San Francisco-based ride-hailing app said in a statement that the service would only be offered with electronic payments, potentially creating an obstacle in the stubbornly cash-oriented economy.

Traditionally, taxi rides in Kazakhstan are a matter of flagging any private car down and then haggling a price. Cash is the only way of paying.

Astana residents, backed this up. They said that fixed prices and cashless payments will act as a brake on Uber’s popularity.

“The inability to negotiate the price will surely make rides more expensive,” said Alberto, an expat working for an European consultancy in Astana.

“The city government is trying to eliminate gipsy cabs ahead of the EXPO next year, but the cashless-only payment option will deter local travellers from using Uber.”

Electronic payments make up around 15% of total commercial transactions in Kazakhstan, according to the Central Bank, compared to a global average of 25% and a European average of around 50%.

In Uber’s experience, the payment system could change, though.

Months after Uber rolled out its service in Baku in April 2015, the company listened to its customers’ demands and introduced a cash option for paying their rides.

Uber said it chose Astana for its growth opportunities. “Astana is a dream-city, a city of the future and big opportunities,” it said.

Uber is not the first taxi app to tap into the Kazakh market. A long-haul Russian service, called InDriver, launched in Kazakhstan,Uzbekistan and Kyrgyzstan. Users said InDriver’s clunky technology made it hard to use.

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(News report from Issue No. 285, published on June 17 2016)

Kazakhstan’s Kashagan to start production in October

JUNE 14 2016 (The Conway Bulletin) – Kazakhstan’s PM Karim Massimov said that Kashagan, the country’s largest oilfield will start production in October 2016. Mr Massimov challenged the consortium members – which include Exxon, Kazmunaigas, Total, Eni, Shell and Inpex – to meet the government’s production plans and resume production at the Caspian Sea field, which had briefly started pumping oil in 2013, before damaged pipes forced its closure.

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(News report from Issue No. 285, published on June 17 2016)

Active Batumi builds 5-star hotel in Georgia

JUNE 16 2016 (The Conway Bulletin) – Active Batumi, a hotel and entertainment company, will build a new five-star hotel in Batumi, Georgia’s tourist hotspot by the end of the year. The new hotel will hold the Wyndham brand, which belongs to a US-based hotel and resorts chain. This would be the first Wyndham-branded hotel in Georgia. In Central Asia and the South Caucasus, the only two other Wyndham hotels are located in Uzbekistan’s capital, Tashkent.

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(News report from Issue No. 285, published on June 17 2016)

Inter-RAO sells its Georgian stake

JUNE 10 2016 (The Conway Bulletin) – Russia’s state-owned power distribution company Inter RAO said the sale of its 100% stake in the Georgian company Mtkvari Energy will generate a positive return for shareholders. Inter RAO representatives told media that the total amount of the sale cannot be disclosed for a few months, but that it “greatly exceeds” the value of the assets. Inter RAO completed the sale of Mtkvari Energy to unnamed international investors on June 2. Mtkvari Energy operates a thermal power plant outside Tbilisi. A recession in Russia and opposition to electricity price increases across the South Caucasus has persuaded Inter RAO to sell assets in Georgia and Armenia.

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(News report from Issue No. 285, published on June 17 2016)

Turkmenistan’s dream pipeline to be ready by 2020

JUNE 11 2016 (The Conway Bulletin) – TAPI, the proposed gas pipeline that will pump gas from Turkmenistan through Afghanistan and Pakistan to India, will be ready in 2020, Pakistan’s minister of natural resources Shahid Khaqan Abbasi told media. This is yet another official voice pushing back the completion date of the project, originally planned for 2019.

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(News report from Issue No. 285, published on June 17 2016)