APRIL 3 2017 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev flew to Baku for talks with his Azerbaijani counterpart Ilham Aliyev that focused on boosting trade between the two Caspian Sea allies. No treaties or deals were signed but people at the meeting said that there the rapport between the two men had been good, laying the foundations for stronger ties.
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(News report from Issue No. 323, published on April 6 2017)
MARCH 29 2017 (The Conway Bulletin) — Kariat Kelimbetov, the former Kazakh Central Bank chief who is now heading the development of the Astana International Finance Centre, has been appointed Kazakhstan’s representative on the board of directors at the Islamic Development Bank (IDB). The IDB’s main agenda is to promote projects which adhere to Sharia laws. Islamic finance is growing in popularity in Kazakhstan and the wider Central Asia region.
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(News report from Issue No. 323, published on April 6 2017)
APRIL 6 2017 (The Conway Bulletin) — Shares in oil producer Tethys traded up at 1.73% on Monday despite full year results showing that its revenues from oil and gas sales had fallen by 47% to $11.7m.
It blamed the drop in revenue on the devaluation of the tenge in the second half of 2015 and a drop in oil output. Tethys sells most of its production on the domestic Kazakh market.
Despite the drop in revenues, Tethys said that its losses for 2016 were actually smaller than its losses in 2015, perhaps driving the price up 26% on the London Stock Exchange. Tethys if one of the region’s most illiquid stocks.
Most of the savings came in tight cost-cutting in administrative issues. It said that losses for 2016 were $46.9m compared to $74.6m in 2015. Tethys is pulling out of a project with China’s CNPC and France’s Total in Tajikistan because it couldn’t keep up with its call payments. It is also locked in a commercial dispute in Kazakhstan which has meant that the bank accounts of its subsidiary have been frozen.
Despite hitting a 6-month high of C$7.65, analysts have been lining up to give Centerra Gold’s stock a hefty ‘buy’ rating.
CIBC gave it a target rating of C$10 this year and CSFB went even further with a rating of C$10.25. The consensus target price is C$8.08.
The buy ratings appear to be based on strong gold prices which are enough to shrug off Centerra Gold’s spat with the Kyrgyz authorities. Kyrgyzstan wants a direct stake in the Kumtor gold mine, its largest industrial asset, which is wholly owned by Centerra Gold. Instead it currently holds a 32.7%% stake in Centerra Gold.
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(News report from Issue No. 323, published on April 6 2017)
MARCH 28 2017 (The Conway Bulletin) — In the first two months of the year, 18,000 new apartments were built in Kazakhstan, a 23% increase on the same period in 2016, media reported quoting official statistics. The increase is driven by the government housing building scheme unveiled last year called Nurly Zher. The scheme is part- political, part-economic in its aims which are to build homes for 1.5m families over the next 15 years and also to lift the country’s flatlining economy.
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(News report from Issue No. 323, published on April 6 2017)
MARCH 27 2017 (The Conway Bulletin) — Nostrum, the London-listed oil company with assets in Kazakhstan, saw its share price fall 11% to 416p, its lowest price since the start of the year, after full year results for 2016 showed a sharp fall in revenues.
It said that revenue was down by $100m to $348m because of sustained low oil prices. Its chairman, Frank Monstrey, said that 2016 had been one of the most difficult years on record although cost cutting had reduced losses.
“Nostrum has not wavered during one of the most challenging years for the oil and gas industry in over a decade,” he was quoted as saying by media. “We have navigated 2016 with caution and great care to ensure our vision remains intact.”
Nostrum has been one of the best performing Central Asia/South Caucasus stocks this year, surging to an 18-month high of 518p at the start of March.
A drop in oil prices and the tough trading figures from 2016 put a dampener on this buy analysts are still backing it.
Brokerage Credit Suisse gave the Nostrum stock an ‘outperform’ rating with a target price of 535p for this year.
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(News report from Issue No. 322, published on March 27 2017)
MARCH 22 2017 (The Conway Bulletin) — Canada-based Condor Petroleum resumed production at its oil wells in Kazakhstan in the second half of last year, it said in a full-year trading update, around 15 months after it cut production because oil prices had dropped too low to make it economical. Combined output from these two fields, Shoba and Taskuduk, is tiny at 588 barrels per day but it does indicate a renewed confidence in the Kazakh oil sector. Also in Kazakhstan, Condor has applied to extend its exploration licence over the Zharkamys exploration area which officially expired at the end of last year.
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(News report from Issue No. 322, published on March 27 2017)
ALMATY, MARCH 21 2017 (The Conway Bulletin) — Looking to ape the World Bank’s global ‘Ease of Doing Business’ survey, Kazakh officials said they wanted to set up a regional version covering all of Kazakhstan.
The survey will measure how difficult, or easy, Kazakh and foreign companies find it to do business in Kazakhstan’s regions, providing data for investors and the government.
Serzhan Madiyev, head of the state-linked Economic Research Institute said that the index had been ordered by President Nursultan Nazarbayev.
“We provide recommendations to the government on what needs to be done to raise the position in this rating every year,” he told the state- owned Astana Times newspaper. “It
is very important for attracting foreign investments.”
Kazakhstan has been looking to attract more investors, and its ‘Ease of Doing Business’ ranking by the World Bank has improved. In 2017, it was ranked in 35th position. The World Bank survey, though, doesn’t measure corruption, one of the main grudges that foreign investors have.
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(News report from Issue No. 322, published on March 27 2017)
MARCH 21 2017 (The Conway Bulletin) — Bulat Utemuratov, the Kazakh billionaire, is still ranked as the richest person in the Central Asia/South Caucasus region, according to the Forbes 2017 list. Mr Utemuratov was ranked at 896th richest person in the world, ahead of Vladimir Kim, Timur Kulibayev and Dinara Nazarbayeva. Mr Utemuratov is estimated to have a net worth of $2.3b, mainly from banking and other smaller ventures. Mr Kim is the official owner of copper producer Kazakhmys and Mr Kulibayev and Ms Nazarbayeva, the youngest daughter of President Nursultan Nazarbayev and her husband, co-own Halyk Bank. They all have a net worth of $2.1b.
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(News report from Issue No. 322, published on March 27 2017)
ALMATY, MARCH 18 2017 (The Conway Bulletin) — Confounding the sluggish economic outlook, Swedish fashion retailer H&M opened its first shop in Kazakhstan in one of Almaty’s biggest shopping malls, Mega Alma-Ata.
Young Kazakh fashionistas had been waiting since July last year when H&M said it was going to open the store, to start shopping at one of the most recognisable global high street brands.
Azamat, a civil servant, was walking with H&M bags through the Mega mall.
“It is very well-known brand, I have heard of it. And here is the only shop that has opened in Kazakhstan, in Almaty, so I came here and I’m glad,” she said.
Gaukhar, a student, reflected on other high-profile openings over the past couple of years. “I saw many people came to the opening, it was a bit wild. Just like the first months of Starbucks here,” she said.
Kazakhstan has developed something of a reputation as shopping Mecca in Central Asia. Ten years ago there were few international brands in Kazakhstan, now a European shopper would feel at home browsing the shops of Almaty’s main streets or a shopping mall in Astana.
Kazakhstan’s economy has been in limp mode since mid-2014. The tenge has halved in value and people’s living standards have fallen, but Aigerim Karimova, marketing specialist at the Mega shopping mall said that H&M’s entry into the Kazakh market showed that the economy had turned a corner.
“The very fact that H&M has entered the Kazakh market is already a modest victory,” she told said.
And the head of H&M’s business programme in Central Asia, Milena Yershova said in July that the company will be aggressive.
“H&M opens large stores which offers customers choice,” she said.
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(News report from Issue No. 322, published on March 27 2017)
MARCH 24 2017 (The Conway Bulletin) — Tethys Petroleum the Canada- based, Kazakhstan-focused oil producer applied to de-list its shares from the London Stock Exchange. In a statement it said that it was too expensive and of little benefit to maintain its listing on both the London and Toronto Stock Exchanges. It will maintain its listing on Toronto’s Stock Exchange. The de-listing is planned for May 2.
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(News report from Issue No. 322, published on March 27 2017)
