Tag Archives: Kazakhstan

Currencies: Azerbaijan’s manat, Kazakhstan’s tenge

JAN. 15 2016 (The Conway Bulletin) — In Azerbaijan, people took to the streets to protest against inflation and unemployment. The manat grew slightly to 1.58/$1, but what angers people most is the increase in prices, especially for imported goods.

In Kazakhstan, the tenge depreciated further to 366/$1, a 6% drop on the previous week. Many worry now that there could be no end to the downward spiral.

In Tajikistan, the somoni lost an additional 2% this week, trading at 7.38/$1. The currency slide in the country doesn’t seem to slow.

In Kyrgyzstan the Central Bank has kept the som stable at 75.9/$1 by intervening several times in the currency market. The Georgian Central Bank also protected the lari with a few interventions. In Azerbaijan and Turkmenistan, the governments imposed further restrictions on the trade of foreign currencies, by limiting licenses to banks, airports and, in Azerbaijan’s case, hotels.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Kabyldin leaves KazTransOil

JAN. 12 2016 (The Conway Bulletin) — Kairgeldy Kabyldin, former CEO of KazTransOil, quit as a director of the company, completing his exit from the Kazakh oil transport company. Earlier in December 2015, Mr Kabyldin quit as CEO of KazTransOil, which is owned by Kazakhstan’s Kazmunaigas. After Mr Kabyldin’s resignation, the board named Nurtas Shmanov as the company’s new CEO. He had been a director of KazTransOil since January 2011. Mr Kabyldin, 63, has worked almost his entire career in Kazakhstan’s oil and gas industry. Analysts expect him to be re-appointed to another role shortly.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Stock market: Centerra Gold, Central Asia Metals

JAN. 15 2016 (The Conway Bulletin) — Mining companies in Central Asia had different experiences this week.

In Toronto, Centerra Gold shares fell 6.6% to 7.01 Canadian dollars. The company’s optimistic results published on Jan. 11 gave its shares a short-lived boost at the beginning of the week, but the continuation of the row with the Kyrgyz government may be eroding investors’ confidence.

Kazakhstan-focused Central Asia Metals lost 8.2% in the week, but closed on an upward note at 128.75p on Thursday. Against this trend, KAZ Minerals gained 5% this week, closing at 94.5p.

Oil and gas companies continued to suffer through the lowest oil prices in a decade, now heading below $30/barrel. Tethys Petroleum, which had financial troubles in its operations in Tajikistan, lost 26% in London to close at 2.13p on Thursday. In the past week, Nostrum Oil & Gas shares lost 8.4% to 329.9p. Roxi Petroleum also lost 12.3% to close at 7.13p.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Business comment: Non-performing economies

JAN. 15 2016 (The Conway Bulletin) — Non-performing loans (NPLs) are a good barometer of a country’s economic health. A low proportion of NPLs means bank customers are in a stable financial position and able to pay back the capital they borrowed.

During economic crises and downturns, the proportion of NPLs is among the first factors, together with inflation in weaker economies, to surge, denting the banking sector’s ability to finance growth.

In Kazakhstan, NPLs shot up to 31-33% of overall lending in 2010/12, an upward trend that the government tried to address in 2013 and 2014, managing to bring the proportion back to around 10%. The positive development was, in fact, a statistical shortcut, as in Q2 2015 the government excluded BTA Bank and its toxic loan portfolio from the accounting.

The sudden depreciation of the tenge, linked to the Central Bank’s decision to abandon the peg to the US dollar in August, will put an increasing pressure on the quality of bank assets.

Now analysts expect figures to worsen.

In the first nine months of 2015, lending slowed significantly and the impact of the rapid fall of the tenge may well impact Q4.

What’s worrying analysts is the share of foreign currency loans, which has increased in the past months. With the depreciation of the tenge against the US dollar this means that they will be more expensive to service.

In Armenia, non-performing loans increased in November, from 1.6% to 1.8% of the total, but there is a worry that the drought in migrant workers remittances from abroad and the drop in demand for banking services may increase the figure further.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Prison population falls in Kazakhstan

JAN. 12 2016 (The Conway Bulletin) – The size of Kazakhstan’s prison population has fallen by around 20% since 2013 to 40,000 people, the Kazakh Prosecutor-General’s office said. Human rights groups have previously criticised Kazakhstan for the poor conditions of its prisons. Riots and violence by prisoners protesting against conditions had, only a few years ago, been fairly frequent.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

CPC increases flow from Kazakhstan to Russia

JAN. 11 2016 (The Conway Bulletin) — The Caspian Pipeline Consortium (CPC), a pipeline designed to transport oil from the Tengiz oil field in western Kazakhstan to the Russian Black Sea coast, said it had increased its output by 7% in 2015, in line with its expansion plans. CPC has now reached a throughput of 42.8m tonnes, up from just below 40m tonnes in 2014. Chevron, Lukoil, Shell, BG and ENI own stakes in CPC. The Tengiz oil field if one of Kazakhstan’s most important oil projects.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Kazakh mortgage holders protest

JAN. 12 2016, ALMATY (The Conway Bulletin) — Around 100 people demonstrated in Almaty, Kazakhstan’s financial capital, over the rising cost of servicing US dollar mortgages, an indicator of growing discontent over the worsening state of the Kazakh economy.

The protesters targeted two banks — ATF and Forte Bank — which they said were refusing to help homeowners with US dollar mortgages despite a 50% drop in the value of the Kazakh tenge. They carried a symbolic coffin filled with underwear and ripped up mortgage statements.

Sulubike Zhaksylykova was on the march. She is head of an NGO which is lobbying for banks to help mortgage owners.

“One of the main goals of the protest is to refinance mortgages in dollars according to people’s ability to pay,” she told The Conway Bulletin.

“There are many disabled people of first and second category who receive 26,000 tenge per ($71) month [of government benefits] and these banks require them to pay 100,000 tenge a month [in mortgage repayments].”

The Kazakh government last year released a 130b tenge ($355m) cash-pot which it handed to commercial banks to help them refinance homeowners’ mortgages. Ms Zhaksylykova, though, accused the banks of not doing enough to help people.

After the protest both ATF Bank and Forte Bank said they would work to improve individual mortgage repayments.

Public protests in Almaty are rare but as the economy worsens, emotions are running high.

The Kazakh economy has always had relatively high levels of household debt and after the Global Financial Crisis of 2008/9, Kazakhstan had one of the highest proportions of non-performing loans.

Analysts have now warned that bad mortgages may be the source of another debt crisis.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Kazakh Samruk-Kazyna sacks staff

JAN. 13 2016 (The Conway Bulletin) – Samruk-Kazyna, the company that manages Kazakhstan’s state assets, said that it had made nine out of 16 of its directors redundant to save money. Like other state institutions, Samruk-Kazyna has been ordered to save costs to combat a drastic economic slow- down triggered by a slump in oil prices and a recession in Russia. Samruk-Kazyna’s chairman Umirzak Shukeyev announced the planned changes just before Christmas.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Fund chief leaves in Kazakhstan

JAN. 13 2016 (The Conway Bulletin) – Berik Otemurat left the Kazakh National Investment Corporation, the unit within the Central Bank that invests money from the Oil Fund, after he gave a series of interviews to major Western publications criticising its strategy. It’s unclear if Mr Otemurat was sacked or he resigned. Eszhan Birtanov, former head of the Kazakhstan Stock Exchange, was named as the new head of the National Investment Corporation.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Kazakh city airport gets new boss

JAN. 13 2016 (The Conway Bulletin) — Anuar Saidenov, former Kazakh Central Bank chief and ex-board member at BTA Bank and Bank RBK, was appointed chairman of the company managing Almaty airport. Since 2011, Netherlands based Venus Airport Investments has owned Almaty International Airport.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)