Tag Archives: economy

Kazakhs issue sovereign debt

JULY 14 2015 (The Conway Bulletin) – In a move designed to plug a gap in it finances, Kazakhstan issued a $4b bond in two tranches.

These 10 and 30 year eurobonds with an initial yield of 3% and 3.5% over their US Treasuries equivalents were the second debt issued by Kazakhstan since October 2014, highlighting just how heavily a drop in oil prices had hit its budget.

And bond traders said that the yield, a measure of the risk factor attached to taking on the debt, had been relatively high.

“Remarkably, the placement yields are even higher than Russian sovereign bond yields,” Reuters quoted Alexey Bulgakov, a senior credit analyst at Sberbank, as saying.

Kazakhstan had not been active in the sovereign debt market since 2000, so two issues in the past nine months show how badly Kazakhstan needs the cash.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Georgia’s PPI jumps up, again

JULY 15 2015 (The Conway Bulletin) – Georgia’s Producer Price Index (PPI) measured 10.2% higher in June compared to a year earlier, Geostat reported, signalling creeping inflation. Geostat said manufacturing prices had pushed up. Georgian officials have been warning of inflation linked to the devaluation of the lari.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Kyrgyz-Russia trade falls

JULY 14 2015 (The Conway Bulletin) – Trade turnover between Kyrgyzstan and Russia fell by 17.3% in January-May 2015 as compared to the same period in 2014, according to the Russian Customs Service. This is more evidence of the knock on effect on Central Asia of Russia’s economic downturn.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Armenia looks to Iran for economic boost

YEREVAN, JULY 15 2015 (The Conway Bulletin) — Armenia welcomed the announcement from Vienna, perhaps with even more gusto than its neighbours, that Western powers had agreed a deal with Iran that should see sanctions on it lifted.

As a landlocked country surrounded mainly by enemies, Armenia has viewed its southern neighbour as a necessary trade partner over the past few years. A sanction-free Iran, it is hoped in Yerevan, will also give Armenia a boost.

“Naturally, if we consider Armenia and Iran as not only neighbours with friendly relations but also having partnership relations, then the lifting of sanctions against Iran and growing regional role of Iran will benefit us in terms of Iran’s developing economic relations,” said Armenian orientalist Vardan Voskanyan on Shant TV.

Both countries have been forced to improve bilateral relations — both diplomatic and trade — over the past few years. Iran has experienced years in the international wilderness. Armenia’s neighbours include Turkey and Azerbaijan, its enemies.

Armenia supplies electricity to Iran in return for gas and there is a programme to build a joint hydro-electricity generating plant along the border on the Arax River.

Various other projects are planned, including a railway.

The Zhamanak newspaper wrote that Armenia can now become a transit country for Iranian goods heading to Europe.

“We just have to welcome the achievement of the agreement, hoping that the positive effects of this situation will impact us as soon as possible,” it said.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Iran deal to give region an economic boost

JULY 16 2015 (The Conway Bulletin) – Governments across Central Asia and the South Caucasus welcomed a deal between the West and Iran over its nuclear programme that will allow sanctions on Tehran to be lifted, boosting their southern neighbour as an important trade partner once again.

Sanctions have weighed down Iran’s economy since 2002, stunting demand and undercutting its value to the region.

Central Asian and South Caucasus countries have legally been able to trade with Iran during the Western-imposed sanctions, but Iran’s economy had faltered. They now hope that, unshackled, Iran can generate wealth and demand throughout the region once again.

“It will have a positive impact on the economic and social development of all countries in the region, and will further strengthen the cooperation between Kazakhstan and Iran,” Kazakh foreign minister Erlan Idrissov said of the deal with Iran.

From Dushanbe to Yerevan, these sentiments were echoed across the region.

Georgia’s foreign ministry said in a statement: “(This) deal brings about normalisation of relations between Iran and Western countries, which will create new economic opportunities for countries both in the region and in the entire world.”

Iran has, over the past few years, been increasing links with both Central Asia and the South Caucasus.

In Azerbaijan it patched up a row over spying, in Georgia new regulations have allowed Iranians to set up businesses and Armenia has been busy making plans to increase trade with one of its few regional allies.

Its a similar story in Central Asia where ties with Iran are being improved and strengthened through new train links and product swaps.

And Iran’s economic impact on the region is significant. The ArcelorMittal steel factory at Temirtau in central Kazakhstan, for example, has long complained that sanctions on Iran severely dented demand for its steel.

With sanctions soon to be lifted and Iranian domestic and industrial demand primed to rise, Central Asia and the South Caucasus should benefit.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Azerbaijani manat stays stable

JULY 16 2015 (The Conway Bulletin) – Azerbaijan’s Central Bank chief Elman Rustamov told local media that he expected the manat currency to remain stable if oil prices steadied at around $50/barrel. The Central Bank devalued the manat by a third in February.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Azerbaijani Central Bank chief reassures on growth

JULY 15 2015 (The Conway Bulletin) – Elman Rustamov, the Azerbaijani Central Bank chief, said that at current oil prices, Azerbaijan’s economy will continue to grow. Mr Rustamov may have been trying to reassure a jittery public. Azerbaijan’s economy has been coping with the fallout of a drop in oil prices and a downturn in Russian economic prospects.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Currency transactions rise in Azerbaijan

JULY 9 2015 (The Conway Bulletin) – Azerbaijan’s Central Bank reported that foreign currency exchanges increased by more than 50% in the first six months of the year compared to the same period in 2014. In Feb., Azerbaijan devalued its manat currency by a third.

ENDS

(News report from Issue No. 239, published on July 9 2015)

Kazakh Central Bank spends reserves

JULY 8 2015 (The Conway Bulletin) – Kazakhstan’s foreign currency reserves declined by 4.4% in the first half of 2015, data from the Central Bank showed. Kazakhstan, like other countries across the region, has been defending the value of its currency by spending its reserves.

ENDS

(News report from Issue No. 239, published on July 9 2015)

Uzbekistan-based factory suffers in economic downturn

JULY 9 2015 (The Conway Bulletin) – GM Uzbekistan, a joint venture between the Uzbek government and US carmaker GM, sold 10,357 cars in Russia in the first half of this year, media reported quoting the company.

This is 57% less than in 2014 and highlights the economic problems rebounding around Central Asia linked to the decline in Russia’s economy.

Russia is one of GM Uzbekistan’s biggest market, so for it to drop away so seriously is bad news for the company.

GM Uzbekistan is based near the city of Andijan in eastern Uzbekistan.

In 2010, GM Uzbekistan employed 5,000 people. If demand for its cars, and it mainly produces mid-range Chevrolet cars at this plant, falls away significantly then these jobs may be under threat.

The drop in car sales is symptomatic of a general decline in economic conditions around the Central Asia region.

As well as a drop in exports to Russia, remittance flows back to Central Asia from workers in Moscow and beyond have dropped across the region by around 40%. Currencies have also dropped in value by around a third.

ENDS

(News report from Issue No. 239, published on July 9 2015)