Tag Archives: government

Azerbaijan and Kazakhstan diversify investment strategies

ALMATY, JAN. 8 2016 (The Conway Bulletin) — Kazakhstan and Azerbaijan will diversify the investment portfolios of their Sovereign Wealth Funds in 2016 away from low yield bonds and currency holdings to high- risk equity and property investments.

Slow global economic growth has forced Sovereign Wealth Funds to ditch conservative investment strategies in search of higher yields and Kazakhstan and Azerbaijan are following a trend.

Bloomberg News quoted Berik Otemurat, director at the Kazakh Central Bank’s National Investment Corporation, as saying: “We’re sitting on a huge pile of cash and not making real returns. It’s especially urgent to address this, given the gloomy outlook for oil prices and reduced inflows into the National Fund.”

Azerbaijani officials have said that they want to increase the cap on real estate investment in its investment portfolio to 10% from 5%for 2016, as well as raising the cap for equity investment to 15% from 10%. SOFAZ, Azerbaijan’s oil fund, has been buying up high-profile property for the past couple of years and it started 2016 by buying a 19th century palazzo in Milan for 97m euro.

“In 2016, SOFAZ will be implementing investment policy, which makes it possible to get the maximum yield at low risk of capital loss,” SOFAZ said of its of strategy.

But Indra Overland, research professor at the Norwegian Institute of International Affairs, said Sovereign Wealth Funds follow market trends, rather than set them, which generates a risk that will buy at the top, rather than the bottom, of the market.

“This change is probably driven by a combination of desperation over low oil price, dissatisfaction with historically low returns on bonds and worries about the stability of financial markets, especially related to China,” Mr Overland said.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Kyrgyzstan-Kumtor talks collapse

DEC. 22 2015 (The Conway Bulletin) – Kyrgyz government officials quit 2- year-long talks with Toronto-listed Centerra Gold, the company that owns the Kumtor gold mine, over a new ownership structure deal. Talks had focused on Kyrgyzstan swapping its 32.7% stake in Centerra Gold for a 50% stake in the subsidiary that directly owns the Kumtor mine. Relations between the two sides have been strained.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Georgia hunts for new CBank chief

JAN. 6 2016 (The Conway Bulletin) – Georgia’s President Giorgi Margvelashvili has started searching for a successor to Giorgi Kadagidze who will complete his 7-year term as head of the Central Bank in February. Mr Margvelashvili’s nominee will have to be voted in by the Parliament before he or she can assume office.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Georgia’s PM resigns unexpectedly

DEC. 22 2015, TBILISI (The Conway Bulletin) — Irakli Garibashvili unexpectedly quit as Georgia’s PM, a move that effectively signalled the first shot in what is likely to be a protracted and bitter campaign ahead of parliamentary elections in October.

Known for his combative nature, Mr Garibashvili said he had decided to quit after two years in office because he had achieved his aims.

“We have returned freedom and dignity to our citizens,” he said. “Official posts are temporary, God and homeland are eternal. Therefore today I took a decision to leave the post of Prime Minister.”

Analysts said Bidzina Ivanishvili, Georgia’s richest man and the power behind the ruling Georgian Dream coalition, had decided to sacrifice his protege because of a slump in the polls.

“It was not a statement of a person who wanted to leave,” said Kornely Kakachia, director of the Tbilisi based think tank Georgian Institute of Politics, of Mr Garibashvili’s resignation speech.

“He probably didn’t even know that he was going to be replaced until the day he resigned.”

A recession in Russia and currencies depreciation across the region have impacted Georgia’s economy, hitting the popularity of the Georgian Dream which defeated the party of former president Mikheil Saakashvili, the United National Movement party (UNM), in elections four years ago.

The Georgian Dream coalition and the UNM are bitter rivals and the parliamentary election is likely to be particularly hard fought and vitriolic.

Giorgi Kvirikashvili, a former economy and foreign minister, was appointed PM. He too is close to Mr Ivanishvili , having previously worked at his bank, Cartu Bank.

Mr Kvirikashvili, 48, said his priority was to boost the economy, a message that appears to have gone down well on the streets of Tbilisi.

Georgian Dream supporter Giorgi Abaladze said the appointment of Mr Kvirikashvili was positive.

“Personally I really like Kvirikashvili. The previous PM was a little bit harsh in his position, he seemed more radical,” he said. “And Kvirikashvili is an economist, and that is what we need in these harsh economic times.”

Kazakh President’s nephew quits Nur Otan

DEC. 19 2015 (The Conway Bulletin) – Kairat Satybaldy, the 45-year-old nephew of Kazakh President Nursultan Nazarbayev, quit as secretary of the Nur Otan party, one of the most high profile and influential political jobs in the country. Nur Otan is Mr Nazarbayev’s political party. Mr Satybaldy had been secretary of Nur Otan for six years. Some analysts have said he is a potential successor to Mr Nazarbayev.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Azerbaijan shakes up security

DEC. 14 2015 (The Conway Bulletin) – Azerbaijan’s President Ilham Aliyev signed a decree to create two new security agencies, the State Security Service and the Foreign Intelligence Service, and disband the National Security Ministry. Earlier this year, Mr Aliyev sacked Eldar Mahmudov as national security minister. The next day police arrested several ministry officials.

ENDS

(News report from Issue No. 261, published on Dec. 20 2015)

Kazakh TransGas names new CEO

DEC. 11 2015 (The Conway Bulletin) – KazTransGas, Kazakhstan’s gas distributor, named Rustam Suleymanov as its new CEO. Mr Suleymanov has worked at KazTransGas for 15 years. Former CEO Kairat Sharipbayev was named chairman of the board.

ENDS

(News report from Issue No. 261, published on Dec. 20 2015)

Turkmen President criticises head of Central Bank

DEC. 8 2015 (The Conway Bulletin) -Turkmenistan’s President Kurbanguly Berdymukhamedov reprimanded the head of the Central Bank and the head of the Commodity Exchange Agency at a government meeting, the Trend news agency reported.

Although details of the dressing- down were thin, as expected from Turkmenistan, it does indicate that, perhaps, Mr Berdymukhamedov is feeling the economic strain.

There have been a number of reports coming out of Turkmenistan over the year that show the country’s economy is under pressure from a drop in energy prices, a recession in Russia and a fall in value of currencies across Emerging Markets. At the start of the year the Central Bank devalued the manat currency by 19%. Last month, dissident websites reported that currency controls had been imposed.

And now this.

Trend reported that Mr Berdymukhamedov had told Central Bank chief Merdan Annadurdiyev and the head of the commodities exchange, Amandurdi Ishanov, that their work had been substandard. The report didn’t give any specific examples.

Mr Berdymukhamedov is keen on giving ministers a public dressing down. These reprimands generally betray some of his thinking on the country’s development. By focusing on the Central Bank and the commodities exchange, Mr Berdymukhamedov is showing his frustration with the economy.

With the distinct lack of accurate economic data flowing out of Turkmenistan, this is important.

ENDS

(News report from Issue No. 260, published on Dec. 11 2015)

Turkmenistan bans USD

DEC. 5 2015 (The Conway Bulletin) – State workers in Turkmenistan have been told they are not allowed to buy foreign currencies, the dissident website chrono-tm.org reported. The website, which is based in Europe but has good sources in Turkmenistan, said that the country is running out of US dollars. Its reports have been proved accurate previously although this report could not be independently verified.

ENDS

(News report from Issue No. 260, published on Dec. 11 2015)

Armenians vote to hand more power to the PM

DEC. 6 2015 (The Conway Bulletin) – Armenians voted overwhelmingly in a constitutional referendum to shift power from the president to the prime minister, a move supporters of the change said was a natural modernising step but its critics decried as a thinly veiled power-grab by President Serzh Sargsyan.

The Central Election Commission said 63% of people had voted in favour of the referendum, a far bigger margin of victory than polls had predicted in the run up to the vote.

But Armenia’s opposition said that the vote had been rigged and urged an investigation, a move supported by the US embassy.

Hundreds of people gathered in Yerevan’s central square after the referendum to protest again the result.

Turnout at the vote, though, was reportedly low, despite the high-profile nature of the reforms. Some analysts said the low turnout betrayed people’s belief that the changes had been brought in to improve the position of the ruling elite rather than update the political system.

Lilit Gevorgyan, an analyst at IHS, said that shifting to a parliamentary system was dressed up as a progressive move but was in fact a way for the political and economic elite to shore up their positions.

“It’s an innovative way of solving the succession issue,” she said.

The new rules are set to be introduced at a parliamentary election in March 2017. Mr Sargsyan is set to leave the presidency in 2018.

As well as handing a slimmed down parliament of 101 members elected via proportional representation more power, the new constitution builds in a run-off system which will ensure a majority for a single party.

This last issue was also contentious.

The reformists argued that this system avoided weak minority governments. Its opponents said it bordered on a form of totalitarian rule.

ENDS

(News report from Issue No. 260, published on Dec. 11 2015)