Tag Archives: Kazakhstan

Kazakh businessman ups Kazkom stake

DEC. 29 2016 (The Conway Bulletin) — Kenes Rakishev, son-in-law of Kazakh defence minister Imangali Tasmagambetov, became the majority shareholder in Kazakhstan’s largest bank, Kazkommertsbank, after he completed his purchase of investment group Alnair Capital Holding, media reported. Mr Rakishev will now own, directly and through Alnair, 56.75% of Kazkommertsbank. Alnair had been linked to the Kazakh elite.

ENDS

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

Kazakh tenge drops to fresh lows

DEC. 18 2015 (The Conway Bulletin) – The Kazakh tenge fell to its record low against the dollar this week, after the US Federal Reserve decided to raise interest rates by a quarter of a percentage point, a move that will inevitably dent Kazakhstan’s fragile economy.

On the eve of the celebrations for the 24th anniversary of Kazakhstan’s independence, the tenge had already bottomed out at 337.8/$1 (Dec. 15). When trading re-started after two days of holidaying in Kazakhstan and an interest rate rise in the US, the tenge fell another 1.4% to hit 342.5/$1.

The tenge now trades at half its value in August, before the Central Bank ditched the Tenge-US dollar peg.

The Fed’s rate rise decision on Dec. 16 was expected, but it was still bad news for Emerging Markets.

And Kazakh state-owned companies seemtobeplanningforworsetocome.

An alleged official letter sent out by state-owned energy company Kaz- munaigas and leaked on social media, instructed its subsidiaries to draft plans for the period 2016-2020 accounting for oil prices at $30/barrel and a tenge/dollar rate of 360 (Dec. 14). Brent oil is currently trading at $36.70/barrel.

Kazmunaigas could not be reached for comment.

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.

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

Stock market: Tethys, Nostrum, Tengri

DEC. 17 2015 (The Conway Bulletin) — Commodities prices keep declining and the industry continues to worry and use caution. This is reflected in the markets, which show the poor performance of Central Asia and South Caucasus focused firms.

Tethys Petroleum (-6% in the past week), Nostrum Oil & Gas (-5.8%) and Roxi Petroleum (-4%) were hit by oil prices plummeting to around $37/barrel.

Industrial and judicial news affected the performance of several miners in the region.

KAZ Minerals closed at 88.5p on Thursday a 7.7% fall in share prices compared to last week. Centerra Gold lost 11% on the Toronto Stock Exchange, closing at 7.07 Canadian dollars on Thursday.

Generally stable Tengri Resources also fell after it announced it was not going to mine the Taldybulak gold and copper project in Kyrgyzstan. It lost 17.4% in one day to close at 3p per share on Thursday.

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

Business comment: Kazakhstan’s Oil Production

DEC. 20 2015 (The Conway Bulletin) — He must thinks we’re fools.

“We did all we could to keep oil prices high by cutting oil production domestically, now it’s time for other countries to do the same,” Kazakhstan’s minister of energy Vladimir Shkolnik told the press in Astana.

He attributed this year’s 1.5m tonnes production cut in Kazakhstan’s oil output to a deliberate decision to help keep oil out of the market to try to raise prices. If this was the intention, it clearly hasn’t worked, because prices are down to a seven-year low, at around $37/barrel.

But, incidentally, this was not the intention.

As several experts have told the Bulletin throughout the year, Kazakhstan only produces around 2% of the world’s total oil output and does not have a seat at price- setting assemblies such as OPEC.

This makes it a price taker, one that cannot, even by freezing completely oil exports, bring back oil prices above $100/barrel.

A 1.5m tonne cut represents roughly a 2% cut in Kazakhstan’s yearly production and is entirely attributable to aging oil fields and delays in the start of new projects.

The re-start of production at the Kashagan oil field in the Caspian Sea is now looming on the horizon, but at the ministry of energy its production forecast is lower than previously assessed.

Tengizchevroil, the consortium operating Kazakhstan’s largest field, finally said it would go ahead with its expansion project in H1 2016, two years behind schedule and with a $15b cost overrun.

So please, Mr Shkolnik, don’t say you cut production on purpose. The main reason that Kazakh output has dropped is because low oil prices have discouraged production.

ENDS

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

China buys controlling stake in major Kazmunaigas subsidiary

DEC. 15 2015 (The Conway Bulletin) — China’s CEFC energy company will buy a controlling stake in KMG Inter- national, a subsidiary of Kazmunaigas, in a deal that helps Kazakhstan raise cash but also rids Western investors of one of the more interesting companies previously offered up by Kazakh officials as a potential IPO target.

The deal, which will give CEFC a 51% share in the Netherlands-based company, is valued at between $500m and $1b, sources told Reuters.

KMG International, formerly called Rompetrol, owns the Petromidia Navodari refinery and hundreds of petrol stations in Romania, Georgia, Bulgaria and Moldova.

It is affiliated with Switzerland- based KMG Trading, which secured a $3b deal in December with Vitol as the buyer of future oil shipments from Kazmunaigas’ 20% share of the Tengizchevroil consortium.

Neither KMG International nor KMG Trading could be reached for comment.

Kazmunaigas has unsuccessfully tried to sell off Rompetrol-owned assets over the past few years.

Samruk-Kazyna, Kazakhstan’s sovereign wealth fund which owns Kazmunaigas, had said it wanted to sell KMG International in a round of privatisation set for 2016. Now, the privatisation of KMG International seems to have fallen out of this IPO bucket list.

Kazakhstan has said it wants to sell off state-owned companies involved in midstream and downstream operations in an effort to raise much-needed cash to restore financial stability during what has become a sustained downturn in oil prices.

ENDS

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

Former Kazakh PM sent to prison for corruption

DEC. 11 2015 (The Conway Bulletin) – A court in Karaganda sentenced former Kazakh PM Serik Akhmetov to 10 years in prison on corruption charges, completing the downfall of a former high-flying member of Kaza- khstan’s inner clique of elite.

Akhmetov was sentenced alongside other 20 senior officials, among them the former governor of the Karaganda region, Baurzhan Abishev, and former mayor of the
city, Meiram Smagulov.

They were all charged with abuse of office and embezzlement.

The trial effectively disbands the former group of Karaganda elite and acts as a warning for other local elites in Kazakhstan.

Akhmetov, 57, had served as PM from September 2012 to April 2014, when he was removed and replaced by his predecessor Karim Massimov.

He was then appointed defence minister, but was sacked in October 2014, just one month before prosecutors filed corruption charges against him.

Now, in his latest ignominy, he will going to jail for taking a $2.4m bribe.

Days before his sentence, Akhmetov publicly admitted his errors and asked President Nursultan

Nazarbayev for forgiveness.
“I sincerely apologise to Nursultan Abishevich for not repaying his trust and causing him distress,” said Akhmetov. The court displayed little clemency towards Akhmetov, instead pre- ferring to hand him a heavy sentence and use him as an example to others.

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

Kazakh businessman buys controlling stake in BTA Bank Ukraine

DEC. 11 2015 (The Conway Bulletin) — Ukraine’s Antimonopoly Committee gave permission to Kazakh businessman Kenes Rakishev to buy a majority stake in BTA Bank Ukraine, strengthening his control over Kazakhstan’s banking assets.

One day before disclosing Mr Rakishev as the mystery buyer, the Ukrainian regulator said it had given the green light to a citizen of Kazakhstan to buy the 50.007% stake in BTA Bank that Kazkommertsbank, Kazakhstan’s largest lender, didn’t already own.

Kazkommertsbank and Mr Rakishev completed the takeover of BTA Bank in Kazakhstan earlier in 2015.

This takeover deal, though, only concerned the Kazakhstan-based parent company. BTA Group also owns banks in Russia, Belarus, Georgia, Armenia, Turkey and Ukraine.

Now, Mr Rakishev will control BTA’s subsidiary in Ukraine, buying it from Andryi Levkovsky, a Ukrainian businessman linked to several investment companies.

The 36-year-old Mr Rakishev is the son-in-law of Kazakhstan’s powerful defence minister Imangali Tasmagambetov and is considered a member of the country’s most inner clique of elite.

BTA Bank Ukraine’s results in the first three quarters of the year were positive. Net income grew by 30% to $119,800, making the bank a small player in Ukrainian market. The bank’s total assets amount to 2.8b hryvnia ($120m).

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

Kazakh President praises cuts

DEC. 13 2015 (The Conway Bulletin) – Kazakhstan’s sovereign wealth fund Samruk-Kazyna has cut some costs but still needs to do more to help Kazakhstan through the current economic downturn, President Nursultan Nazarbayev said in an interview with local journalists. Mr Nazarbayev said the fund cut costs by 50b tenge ($145m) this year, but was continuing to buy subsidiaries.

ENDS

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

Kazakhstan and China deals

DEC. 14 2015 (The Conway Bulletin) – At a business forum in Beijing, Kazakh and Chinese officials said they reached agreements worth $10b that will increase cooperation between state-owned companies. One of the deals involved the sale of 51% of KMG International, a subsidiary of Kazmunaigas, to a Chinese energy company.

ENDS

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