Tag Archives: Kazakhstan

Business comment: Analysts see oil output drop

OCT. 1 2015 (The Conway Bulletin) — In the past few months of tumbling oil prices, analysts have discussed Azerbaijan and Kazakhstan and debated whether they could keep oil production steady.

The PRIX index, a young and fully independent barometer of the 20 major oil exporting countries, forecasts a fall in oil exports in Q4 2015 for both Azerbaijan and Kazakhstan, a stark change after a positive forecast in Q3 2015.

PRIX’s methodology is simple, as it collects forecasts on oil exports from around 300 analysts around the world. It has rapidly gained credibility due to the volume of data it generates.

John Friedman, analytical advisor at PRIX, said: “We’re still in a bear market for oil.”

He noted that exporters do not yet want to give in and cut exports despite low oil prices.

Indra Overland, project director at PRIX, said the situation in Azerbaijan was particularly worrisome.

“Oil production in Azerbaijan is clearly falling. This is due to resource depletion, though one could also argue that it is indirectly due to the unattractive climate for exploration and investment,” Mr Overland said.

Importantly, the PRIX index also highlights the agreement, or lack thereof, between the surveyed analysts. It is interesting to note that disagreement among analysts covering Azerbaijan and Kazakhstan has risen significantly, as oil prices and export data keep falling.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Grain harvest rise in Kazakhstan

OCT. 2 2015 (The Conway Bulletin) – Kazakhstan is on target to produce 17.3m tonnes of grain this year, up from the 17.1m tonnes produced last year, media reported quoting the agriculture ministry. Grain has become an important export commodity for Kazakhstan. The ministry also said it is trying to find more clients for its grain in SE Asia.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Kazakh government orders textbook publisher to redraw map of Ukraine

OCT. 1 2015, ALMATY (The Conway Bulletin) — Kazakhstan’s ministry of education ordered the Metkep publishing house to redraw a map used in one of its textbook which suggested Crimea was part of Russia.

Like most countries, Kazakhstan has not officially recognised Russia’s annexation of Crimea after a referendum last year in which the majority of people voted to leave Ukraine.

The Ukrainian embassy in Astana last week complained about the map in the school textbook, embarrassing the Kazakh government which needs to tread a fine diplomatic line between Russia and West.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Kazakh football team sneak draw in Champions League

ASTANA/ Kazakhstan, OCT. 2 2015 (The Conway Bulletin) — Just when the crowd began to think that it was all over, the ball slipped into the back of Galatasaray’s net. The Astana Arena, with 30,000 FC Astana fans inside, shook with celebration.

The third own-goal of a mad and exciting match sealed a 2-2 draw for FC Astana in the first ever Champions League football game played in Central Asia.

Incredulous FC Astana fans were besides themselves with joy at the unexpected result.

“I am not keen on football, but when there are games like this, I turn into a real football-freak” said Bota, a 27- year-old FC Astana fan. On her nails she had painted the Kazakh flag.

The atmosphere at the Astana Arena, a state-of-the-art stadium with synthetic grass and retractable roof, was electric and very patriotic. The 30,000 FC Astana fans were dressed in blue-and-yellow, the colours of Kazakhstan’s flag. They didn’t stop singing and chanting for the whole 90 minutes.

In Kazakhstan’s Premier League many seats are empty but not for this match against Istanbul’s Galatasary. On the pitch FC Astana were not just representing the Kazakh capital, they were representing the entire country.

“This game is a way to prove that we are not Boratstan,” said Bota in a reference to the fictional comic character called Borat. “We have a lot of things to show and be proud of.”

Kazakh fans hadn’t forgotten that Galatasaray forward Lukas Podolski tweeted a picture of Borat after his team were drawn in the same group as FC Astana. Every time he touched the ball, they booed.

FC Astana is essentially a state club, part of the President’s Sport Club Astana alongside an ice hockey and cycling team, and financed by the national fund Samruk-Kazyna.

And this historic football match helped distract many people from the increasing economic gloom. Perhaps with some irony, one of the FC Astana chants was “We believe in Astana. We do not care about devaluation.”

Whether they qualify or not for the next round of the Champions League, FC Astana will also host Atletico Madrid and Portugal’s Benfica this year.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Finnish company wins tender in Kazakhstan

SEPT. 25 2015 (The Conway Bulletin) — Finnish-based Wärtsilä won a tender to build a 40MW combined heat and power (CHP) plant near the Caspian port of Aktau, in west Kazakhstan. The Kazakh company KazAzot will manage the plant, which Wärtsilä plans to complete in late 2016. The plant will power the city of Aktau and its industrial hub.

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(News report from Issue No. 250, published on Oct. 2 2015)

Kazakh bank completes buyback

SEPT. 29 2015 (The Conway Bulletin) — Kazakh lender BTA Bank completed the buyout of its shares from Samruk- Kazyna by buying the final 4.26% stake that Kazakhstan’s sovereign wealth fund owned in it. Samruk-Kazyna bought BTA to save it from collapse during the Global Financial Crisis of 2008/9. Over the past year, Kazkommertsbank, another Kazakh bank, has merged with BTA Bank.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Rout on commodities-based companies hits KAZ Minerals

ALMATY, SEPT. 30 2015 (The Conway Bulletin) — KAZ Minerals’ shares in London lost a fifth of their value over the past week as concerns about future commodities prices continued to stalk the market and copper prices fell to near 6-year lows.

Globally, Switzerland-based Glencore was the biggest loser in September with around $14b wiped off its market cap. The market pushed down Glencore shares mainly because of worries over its large debt pile but the sell-off still pressured other commodities-orientated companies including miners in the South Caucasus and Central Asia.

And the drop in commodities prices it also a sovereign issue in Central Asia and the South Caucasus with national budgets partially reliant on income from sales. This will hurt Kazakhstan in particular, although it will reverberate across the region.

Analysts were quick to point the finger at weak Chinese demand for commodities, especially copper, for the drop in prices. Copper is regarded as a good conductor of electricity and heat and used widely in manufacturing.

“With China slowing down and a lot of uncertainty, fears in the market have intensified, and the reduction in the pace of demand growth for all commodities has seemed to send everybody off the cliff,” Ed Hirs, professor of energy economics at the University of Houston told Bloomberg.

China uses more than half of world’s copper production and any fluctuation in its demand curve has significant effects in the markets. A strong US dollar and uncertainty over Fed interest rate decisions has also hit commodities prices.

London-listed KAZ Minerals, formerly known as Kazakhmys, is particularly exposed to Chinese copper demand whims. Its main product is copper and China is one of its main clients.

Shares in KAZ Minerals were down 20.5% in one week closing at 84.65p, its lowest ever price. It later rebounded above 90p, due to a wave of short-term rebounds across the sector.

KAZ Minerals/Kazakhmys has been portrayed as a company closely interlinked with the elite in Kazakhstan.

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(News report from Issue No. 250, published on Oct. 2 2015)

Kazakh Central Bank raises interest rates

ALMATY, OCT. 2 2015 (The Conway Bulletin) — Kazakhstan’s Central Bank raised its new key interest rate to 16% from 12% in an attempt to contain rising inflation.

The increase in the overnight repo rate, made the key interest rate in September, highlights how heavily the Central Bank underestimated the rate that inflation would rise after a devaluation of its tenge currency in August. The tenge is now trading at 272/$1 compared to 188/$1 before it was cut from its US dollar peg on Aug, 20.

“Considering the economic data and prospects for growth the National Bank decided to raise its key interest rate to 16% to keep inflation in the medium-term target range of 6-8%,” the Central Bank said in a statement.

But bolstering the strength of the tenge may have been the Kazakh Central Bank’s main objective for the interest rate rise. Despite promising not to intervene in the currency markets after ditching the US dollar peg, the Kazakh Central Bank has spent $1b propping up its currency and keeping it away from the 300/$1 floor that it has threatened to fall through.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Cell repays loan to Kazakh banks

SEPT. 28 2015 (The Conway Bulletin) — Kcell, one of the biggest players in Kazakhstan’s telecoms market, appears to re-organising its debt. It repaid a syndicated loan worth 14.8b tenge ($55m) to Citibank Kazakhstan and RBS Kazakhstan, days after opening a 17b credit line with Kazkommertsbank. Sweden- based TeliaSonera owns 62% of Kcell. It said last month that it wants to quit Eurasian markets.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

OPEC asks Kazakhstan for oil cut

SEPT. 30 2015 (The Conway Bulletin) – Vladimir Shkolnik, the Kazakh energy minister, said OPEC members asked Kazakhstan to cut its oil production in a coordinated attempt to increase oil prices. Kazakhstan has said oil production would be slightly lower this year.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)