JUNE 30 2015 (The Conway Bulletin) – Geostat, the Georgian statistics agency, reported an increase in year-on-year GDP growth to an estimated 2.1% in May, up from 0.9% in April. The economic data will be welcome news for the Georgian government which has been under pressure because of a downturn in the economy.
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(News report from Issue No. 238, published on July 2 2015)
JUNE 30 2015 (The Conway Bulletin) – Kazmunaigaz, Kazakhstan’s state-owned oil and gas company, said it would sell half its stake in the Caspian Sea Kashagan oil field to Samruk-Kazyna, the Kazakh sovereign wealth fund.
This is a curious arrangement as Samruk-Kazyna actually owns Kazmunaigas. It may be a way for Kazmunaigas, which has been badly hit by the sharp drop in energy prices, to borrow cash cheaply.
According to a press release from the London Stock Exchange, Kazmunaigas is seeking the consent of the shareholders in the North Caspian Operating Company (NCOC) , the consortium which operates the Kashagan, to sell half of its 16.88% share to Samruk-Kazyna for approximately $4.7b.
“Samruk-Kazyna’s agreement to purchase the Kashagan Shares reflects the State’s strong support of KMG (Kazmunaigas), as a strategic national asset,” the statement said.
Part of the cash raised by the sale would be used to pay $2.2b Kazmunaigas owes in fees relating to its 2013 purchase of the Kashagan stake from US company ConocoPhillips.
Kazmunaigas said that the sale would come with an option to buy back the stake in Kashagan for the same price between 2016 and 2020.
NCOC declined to comment.
Kazmaunaigas had run up large debts, partly because of the oil price slump. Halyk Bank analyst Sabina Amangeldi said in a note last month that the company already has seven Eurobond issues outstanding worth a total of $8.8b.
She also noted that lower oil prices had knocked Kazmunaigas’ revenues by around a third and that profit had been wiped out.
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(News report from Issue No. 238, published on July 2 2015)
JULY 1 2015 (The Conway Bulletin) – Georgia’s Central Bank raised its interest rate to 5.5%, its highest since Nov. 2012, to combat accelerating inflation. Georgia’s Lari currency has fallen sharply in value over the past few months, mainly because of the downturn in Russia’s economy.
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(News report from Issue No. 238, published on July 2 2015)
JUNE 30 2015 (The Conway Bulletin) – Moodys, the ratings agency, downgraded Azerbaijan’s banking sector to negative from stable, reflecting the country’s tough economic outlook.
Azerbaijan devalued its currency by a third earlier this year, undermining the
banks, Moodys said.
“We believe that banks’ asset quality will deteriorate following the local-currency devaluation, as most foreign-currency loans in Azerbaijan are to borrowers that do not have foreign-currency revenues,” Moodys said in a report.
Stubbornly high consumer spending and inflation is also pressuring Azerbaijan’s econ- omy.
“We believe that banks’ asset quality will deteriorate following the local-currency devaluation, as most foreign-currency loans in Azerbaijan are to borrowers that do not have foreign-currency revenues,” Moodys’ press release said, quoting analyst Maria Malyukova.
Based on an average price of a barrel of oil of around $55, Moodys said that Azerbaijan’s economy would grow by 1% this year, one of the slowest growth rates in the developing world.
Oil production dominates Azerbaijan’s economy. Moodys estimated that the hydrocarbon sector contributed around 37% of Azerbaijan’s GDP last years.
Azerbaijan said that is is trying to boost gas sales to Europe but this is not due to come on-stream for several years.
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(News report from Issue No. 238, published on July 2 2015)
JULY 1 2015 (The Conway Bulletin) – Tajikistan’s Central Bank is cutting nearly 200 jobs as it restructures and streamlines its operations, media reported. It’s unclear exactly what the restructuring entails but media said that most jobs would be lost at the Central Bank’s offices in Dushanbe.
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(News report from Issue No. 238, published on July 2 2015)
JULY 1 2015 (The Conway Bulletin) – Economists polled by Bloomberg News said Kazakhstan will be one of the top ten worst performing economies in 2015. Kazakhstan’s economy is expected to grow by 1.2% this year, down from an estimate of 3.6% in March.
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(News report from Issue No. 238, published on July 2 2015)
JULY 1 2015 (The Conway Bulletin) – Armenia’s foreign currency reserves increased by $100m in May, the Central Bank told media. The increase shows that pressure on the dram has reduced. Last year, the Central Bank spent a third of its reserves defining the dram.
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(News report from Issue No. 238, published on July 2 2015)
JULY 2 2015 (The Conway Bulletin) – TBILISI — Turkmenistan’s President Kurbanguly Berdymukhamedov travelled to Tbilisi for the first time in his eight-year presidency, part of a high-profile charm offensive aimed at winning support for pumping Turkmen gas to Europe across the South Caucasus.
Georgian President Giorgi Margvelashvili welcomed Mr Berdymukhamedov at the Presidential Palace overlooking Tbilisi with red carpet and a guard of honour.
“Energy is one of the issues on which we cooperate closely. A Transit route from Turkmenistan to Azerbaijan, Georgia and Turkey has a huge potential,” Georgian media quoted Mr Berdymukhamedov as saying after the meeting. said.
Mr Margvelashvili agreed.
“Our joint transit and energy projects will make it possible to transit Turkmen energy resources to the European markets,” he said.
This year momentum has built for Turkmenistan to start sending its gas to Europe across the south Caucasus. The European Union has visited Ashgabat several times to secure promises of gas supplies from Turkmenistan and Turkmen officials have set up working groups with their Azerbaijani, Georgian and Turkish counterparts on how best to pump gas to Europe.
Europe wants to reduce its dependence on Russia for energy supplies and Turkmenistan wants to widen its client base. Currently most of its gas flows east to China.
By travelling to Tbilisi for the first time since he became Turkmen president in 2007, Mr Berdymukhamedov has sent out a strong signal of his intent.
Luca Anceschi, a professor of Central Asian Studies at Glasgow University explained.
“This meeting, marking Berdymukhamedov’s first official visit to Georgia, is an important display of Turkmenistan’s policy of maintaining an open dialogue with as many potential partners as possible,” he said.
And Georgia is important because it lies on the pipeline transit route from Azerbaijan to Turkey and then into Europe. Mr Berdymukhamedov, as he clearly has acknowledged, needs Georgian support to push gas through to Europe.
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(News report from Issue No. 238, published on July 2 2015)
JULY 1 2015 (The Conway Bulletin) – Commercial banks in Kyrgyzstan’s need to meet a minimum capitalisation level, the Central Bank said, part of an ongoing process to professionalise the banking sector and protect it against another Global Financial Crisis. By 2017, commercial banks in Kyrgyzstan will need a working capital of nearly $10m.
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(News report from Issue No. 238, published on July 2 2015)
JUNE 30 2015 (The Conway Bulletin) – Kyrgyzstan’s Central Bank kept its interest rates steady at 9.5%, despite inflation falling. The Central Bank is trying to weigh up protecting its som currency from devaluing and also stopping inflation dropping too low. Inflation dropped to 4.8%, down by half since the beginning of the year.
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(News report from Issue No. 238, published on July 2 2015)
