SEPT. 29 2014 (The Conway Bulletin) – Japan has signed a deal to help build local infrastructure projects in Azerbaijan such as improving basic drinking water access in villages, media reported. This may show that Japan is trying to increase its participation in the South Caucasus.
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(News report from Issue No. 202, published on Oct. 1 2014)
SEPT. 25 2014 (The Conway Bulletin) – Kazakhstan will issue a US dollar denominated bond later this year, its first since 2000, Reuters reported. Government officials have launched a roadshow to drum up support for the debt issue. These are difficult times, though, because of the knock-on effect of sanctions on Russia.
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(News report from Issue No. 202, published on Oct. 1 2014)
SEPT. 24 2014 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD) sold its 5% stake in Bank of Georgia.
The sale ends the EBRD’s mission to support Bank of Georgia after the 2008 Global Financial Crisis. It took control of the stake in 2012 after a financial aid package put together in December 2008 was converted into shares.
“The EBRD’s role in supporting Bank of Georgia in the aftermath of the 2008 crisis is now complete,” Reuters quoted Nick Tesseyman, the EBRD MD, as saying.
“The EBRD will continue to provide debt financing to Bank of Georgia going forward as part of our continued support to the Georgian financial sector.”
The Bank of Georgia is publicly listed on the London Stock Exchange.
In many ways the sale of the EBRD’s 5% stake in Bank of Georgia is a success for Georgia as a country. The EBRD would not have sold its stake if it didn’t think that the bank was stable enough and if there wasn’t enough investor interest in Georgia and its finance industry.
Bank of Georgia CEO Irakli Gilauri acknowledged this.
“This transaction illustrates the depth of support for the bank from international investors and signals increasing investor interest in Georgia’s capital market,” he said.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 202, published on Oct. 1 2014)
SEPT. 29 2014 (The Conway Bulletin) – Kazakhstan’s grain harvest is likely to top 17m tonne this year, media quoted the Kazakh agriculture ministry as saying. This is slightly down on 2013 but is more or less in line with early predictions. Grain has become an important commodity for Kazakhstan.
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(News report from Issue No. 202, published on Oct. 1 2014)
SEPT. 29 2014 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD) has agreed to lend Kazakhstan’s railway company $165m as part of its upgrade plan, media reported. This is important because it shows that Kazakhstan continues to attract investment despite declining economic growth rate predictions.
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(News report from Issue No. 202, published on Oct. 1 2014)
SEPT. 30 2014 (The Conway Bulletin) – On a trip to Yerevan, Greece’s president Karolos Papoulias and Armenia’s president Serzh Sargsyan agreed to expand economic relations.
The statement was short on detail and mainly forgettable, if it wasn’t for the timing. The visit by President Papoulias to Armenia comes less than a month after Greece’s parliament agreed to make denial of the alleged genocide by Ottoman Turks against the Armenians a crime.
For Armenia, persuading Greece to take this line was a major success. Some countries, such as France, do formally recognise the Armenian genocide but Greece is only the third country to make it illegal to deny that the genocide took place.
Switzerland and Slovakia have also made it illegal to deny the Armenian genocide. France is considering a similar law.
Turkey denies genocide and says instead that Armenians died in fighting between the two sides towards the end of the First World War.
Relations between Armenia and Turkey and are still strained and the border between the two neighbours is closed.
Of course, relations between Turkey and Greece are also strained making a deal between Armenia and Greece natural.
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(News report from Issue No. 202, published on Oct. 1 2014)
SEPT. 24 2014 (The Conway Bulletin) – The closure of the US airbase at Manas outside Bishkek earlier this year is already having a knock-on effect on the local economy, the eurasianet.org website reported. It its story, eurasianet.org reported that around 2,000 Kyrgyz truck drivers were now out of a job because of the closure.
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(News report from Issue No. 202, published on Oct. 1 2014)
SEPT. 30 2014 (The Conway Bulletin) – Shares in Kazkommertzbank have nose-dived since it bought a stake in BTA Bank from the Kazakh government.
By the end of September, shares in KazKom, as the bank is commonly known, traded at $1.65 on the Kazakh Stock Exchange, down by 37.5% since July when it completed buying nearly half of BTA.
Analysts said the drop highlighted the toxic nature of BTA’s bad debt portfolio and a drop in profit. KazKom said profit for the first half of 2014 was down by 6%.
A source from the banking industry said: “Most bad loans are with BTA which is unable to recover them from its debtors. This entails a huge cost.”
Mountains of bad debt still holds back Kazakhstan’s financial sector, a legacy of the Global Financial Crisis of 2008/9 when the government had to buy up a handful of banks. One of these was BTA Bank.
At the end of last year, the Kazakh government said it wanted to sell its shares in government-owned banks.
Kenes Rakishev, a young Kazakh businessman with strong links to the elite and KazKom, controlled by the London- based businessman Nurzhan Subkhanberdin agreed in February to buy the bank. At the time, sources with knowledge of the Kazakh finance centre said buying BTA Bank made no business sense for KazKom. Instead, they said, it was a political move by Mr Subkhanberdin to win favour.
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(News report from Issue No. 202, published on Oct. 1 2014)
SEPT. 29 2014 (The Conway Bulletin) – A court in Bishkek ruled against plans by the government to increase fees on electricity and gas, media reported, argued for by reformers who have said that Kyrgyzstan needs to charge more for its utilities.The ruling is a blow for the government which has been working to modernise Soviet-era systems.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 202, published on Oct. 1 2014)
SEPT. 18 2014 (The Conway Bulletin) – Kyrgyz PM Djoomart Otorbayev sacked two cabinet ministers, minister of culture Kamila Taliyeva and interior minister Abdyldy Suranchiyev, his first major reshuffle since taking over the job in March.
The sackings are a nod to public dissatisfaction with the government, with reports growing that many ministers are hanging on to their jobs by a thread.
But they may be less about improving the efficiency of government and more about preparations for next year’s parliamentary elections. With a winter energy crisis expected to put pressure on both President Almazbek Atambayev, affiliated to the Social Democratic Party of Kyrgyzstan, and Mr Otorbayev, loosely associated with the socialist Ata-Meken party, dropping a few unpopular officials makes political sense.
Kyrgyz media reported that both the sacked ministers where disliked, making them easy scapegoats for failings across government but personnel changes are unlikely to spare the government public frustration if the winters are as cold as expected, especially with Kyrgyzstan’s power production struggling.
Ulugbek Erkeshev, a Kyrgyz political journalist, said he has seen it all before.
“At a time when they need to be working together as a government around the clock they are passing portfolios around,” he said.
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(News report from Issue No. 201, published on Sept. 24 2014)
