Tag Archives: economy

Georgia’s Central Bank raises rates

MAY 2 2017 (The Conway Bulletin) — Georgia’s Central Bank raised interest rates to 7% from 6.75%, its highest rate since June 2016, because of supply-side price pressure. One of the Central Bank’s key remits is to keep inflation at 4% and it said that one- off price rises, such as an increase in excise duties, were pushing up prices. It also said, though, that it didn’t expect any more interest rate rises this year. Annualised inflation in March was 5.4%.

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(News report from Issue No. 327, published on May 5 2017)

FDI in Kazakhstan jumps to 40%

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APRIL 27 2017 (The Conway Bulletin) — Foreign investment in Kazakhstan jumped 40% to $20.6b in 2016, compared to 2015, investment and development minister Zhenis Kassymbek told media. The jump was mainly linked to major infrastructure projects in the energy and mining sectors, such as the expansion of the CPC Pipeline.

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(News report from Issue No. 327, published on May 5 2017)

Turkey wants to boost ties with Uzbekistan

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APRIL 26 2017 (The Conway Bulletin) — On a trip to Tashkent, Turkish foreign minister Mevlut Cavusoglu said that he wanted to see improved ties with Uzbekistan, a boost to new president Shavkat Mirziyoyev who has been trying to woo his neighbours . Relations between Uzbekistan and Turkish had been strained under Mr Mirziyoyev’s predecessor, Islam Karimov, with the Turkish business community in Tashkent, a sizable and influential group, complaining of being unfairly targeted by the authorities.

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(News report from Issue No. 326, published on April 28 2017)

India wants to boost cotton imports from Kazakhstan

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APRIL 20/21 2017 (The Conway Bulletin) — At a meeting in the south Kazakh city of Shymkent, Kazakh and Indian officials pledged to increase cooperation in the cotton trade. Indian businessmen said that they wanted to increase the supply of cotton from Kazakhstan. Kazakhstan has been trying to develop its cotton sector over the past few years in a drive to move away from rely too heavily on the oil and gas sector.

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(News report from Issue No. 326, published on April 28 2017)

Currencies: Kazakh tenge and Azerbaijani manat

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APRIL 28 2017 (The Conway Bulletin) — Softer oil prices have pushed down the value of the Kazakh tenge and the Azerbaijani manat. The tenge is now trading at 313.8/$1, its lowest value since March and the manat is trading at 1.665/$1, a two week low.

Oil has come off a high on April 11 of $56.23/barrel to be trading at around the $51/barrel mark. The main driver of the dip in oil prices is geopolitical concerns over US intervention in Syria and the spike in tension around the Korean peninsular. Both Azerbaijan and Kazakhstan are price takers and will have to settle for whatever the geopolitical machinations hand them.

On the equities front, it has been a very good fortnight for TBC Bank. It has ragreed a $100m loan from the EBRD to implement the so- called Deep and Comprehensive Trade Agreement with the EU. This is designed to boost trade between Georgia and the EU. TBC Bank’s share price has risen by around 20% this year and analysts are positive.

“Looking ahead, TBC Bank is expected to record a rise in its bottom line of 8% this year, followed by further growth of 14% next year,” said share analyst The Motley Fool. “When combined with its relatively low P/E ratio, this puts it on a PEG ratio of only 0.8. This suggests that more share price growth could be ahead for the company.”

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(News report from Issue No. 326, published on April 28 2017)

Azerbaijani state oil fund rises

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APRIL 18 2017 (The Conway Bulletin) — Azerbaijan’s state oil fund Sofaz is worth £33.2b, officials said, a slight increase from $33.147 at the beginning of the year. This figure is important because Azerbaijan has been borrowing cash from Sofaz to top up its state budget which has shrunk with falling oil prices.

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(News report from Issue No. 325, published on April 17 2017)

Panic fuelling monetary crisis, says Tajik CBank

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APRIL 13 2017 (The Conway Bulletin) — Tajikistan’s Central Bank said that panic speculation was driving up the cash exchange rate against the official rate to dangerous levels. The Reuters news agency said that the official somoni rate was 8.49 somomi/$1 compared to 8.9/$1 at cash exchanges. Tajikistan’s banking system has been teetering on the verge of collapse, only propped up by the government.

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(News report from Issue No. 325, published on April 17 2017)

Money changers still operate in Uzbekistan

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TASHKENT, APRIL 10 2017 (The Conway Bulletin) — Money changers still hawk for custom outside nearly all markets and shopping malls in Uzbekistan despite reports of a crackdown on the trade that has become a part of the Uzbek scene over the past 25 years.

A correspondent for the Conway Bulletin said that he had received around double the official Uzbek som/US dollar exchange rate on the Black Market. The Uzbek government has been devaluing the Uzbek som by around 1.4% per week since September last year. It now measures around 3,650 som.

Last month reports appeared that Uzbek police had been arresting money changers at some of Tashkent’s biggest markets. The Conway Bulletin correspondent, though, reported that money changers appeared to be operating with impunity, touting for business across the capital.

At rural markets, the correspondent said money changers carried wads of cash in bags and openly haggled with people looking to change som into US dollars.

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(News report from Issue No. 324, published on April 13 2017)

Currencies: Kazakh Tenge

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APRIL 13 2017 (The Conway Bulletin) — The Kazakh Tenge continues its upword trajectory this year and is now threatening to break through the psychologically important 310/$1 barrier.

It last breached this level at the beginning of December 2015, during the second devaluation of the year. After 310/$1 barrier is broken, analysts are confident that with oil pushing past $55/Barrel and the macro-economic picture improving, that it is only a matter of time before the next important level of 300 tenge/$1 is also breached.

It barely registered in October 2015 when the tenge fell past this level. Overnight on Oct. 10/11 2015, the tenge fell from 280/$1 to 307.5/$1. It kept falling in value as oil prices fell and by Jan. 22 2016 was valued at 381/$1. Since then, oil has improved from under $30/barrel, helping the economy to heal and pushing the value of the tenge up by 18.3% to 311.9/$1.

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(News report from Issue No. 324, published on April 13 2017)

Kazakhstan says interest is high for privatisations

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ALMATY, APRIL 5 2017 (The Conway Bulletin) — A senior official at Samruk Kazyna, Kazakhstan’s sovereign wealth fund, said that the up-and-coming privatisations of Air Astana, the national airline, and Kazatomprom, the state nuclear company, were attracting a lot of attention from Western investors.

In an interview with Reuters in London, Berik Beisengaliyev, managing director for assets optimisation of Samruk Kazyna, also said that the Kazakh government had sold off 120 small and medium sized companies. Samruk Kazyna is Kazakhstan’s $67b sovereign wealth fund.

“We saw a very positive mood in the market,” he was quoted as saying. Kazakhstan has been promising the so-called People’s IPO that would see chunks of the country’s biggest companies listed on both the Kazakh Stock Exchange and an international exchange. It has continually delayed the IPOs, mainly because market conditions have moved against sales.

Still, Mr Beisengaliyev said that the sale of the smaller companies would be complete by the end of 2018 allowing the government to sell off what have been considered its top tier assets.

As well as Air Astana, which is 49% owned by BAE Systems, and Kazatomprom, the world’s biggest uranium producer, the more high profile companies slated to be sold off, or at least be partially privatised, include Kazpost, oil and gas company Kazmunaigas and railway operator Temir Zholy.

A third tier of companies are being considered for sale to strategic investors, single high-profile companies instead of the multiple smaller investors attracted through an IPO, Mr Beisengaliyev said. These companies include domestic airline Qazqom, Kazakhtelecom and mining company Teu-Ken Sumruk.

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(News report from Issue No. 324, published on April 13 2017)