JAN. 24 2017 (The Conway Bulletin) — Russia’s Gazprom will buy 12.8b cubic metres of gas from Kazakhstan in 2017 continuing its strategy of preferring Kazakh gas suppliers over other regional companies. Kazmunaigas has boosted its cooperation with Gazprom over the past few years while other state companies linked to Turkmenistan and Uzbekistan have lost ground.
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(News report from Issue No. 314, published on Jan. 27 2017)
JAN. 25 2017 (The Conway Bulletin) — Dutch potato chip manufacturer Farm Frites is considering setting up a plant in northeast Kazakhstan, Kazakh deputy PM Askar Myrzakhmetov, Kazakh deputy PM and agriculture, said. Farm Frites supplies frozen potato chips to restaurants. A deal with Koktem Agricultural services, the company it is negotiating with, would give the Kazakh government a boost as it has said it wants to diversify away from oil and gas.
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(News report from Issue No. 314, published on Jan. 27 2017)f
JAN. 20 2017 (The Conway Bulletin) — Ending weeks of speculation, Halyk Bank, owned by the son-in-law and daughter of Kazakh President Nursultan Nazarbayev, said that it had started talks with Kazkommertsbank, the country’s biggest bank, on merging. A potential merger between the two banks would create a company that would dominate the Kazakh banking sector with a market share of around 40%. Unnamed sources in November 2016 had told Reuters that a merger between the two banks was being discussed in secret.
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(News report from Issue No. 314, published on Jan. 27 2017)
JAN. 26 2017 (The Conway Bulletin) — The New York-based Human Rights Watch criticised the Kazakh authorities for arresting two union leaders on Jan. 20 for allegedly organising a hunger strike by oil workers earlier in the year against the closure of a union confederation structure. The two union leaders, Amin Yeleusinov, and Nurbek Kushakbayev, have been placed in pretrial detention. The Kazakh government wants to reduce the power of the unions, who they blame for a series of strikes since 2011.
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(News report from Issue No. 314, published on Jan. 27 2017)
JAN. 22 2017 (The Conway Bulletin) — South Korea’s Kookmin Bank is likely to sell its 41.9% stake in Kazakhstan’s Bank CenterCredit because of mounting losses, Korean newspapers reported, a blow to the reputation of the Kazakh banking sector. Kookmin Bank bought its stake in Bank CenterCredit in 2008 for 940b won ($800m) but it has written down the value of the stake several times since then to virtually zero. Kazakh banks have been under mounting pressure over links to bad debt that have built up over the past couple of years as its oil-backed economy has weakened. Bank CenterCredit has been especially vulnerable because of its exposure to the mortgage sector which soured after a 50% devaluation of the tenge in 2015. Bank CenterCredit has not confirmed the reports.
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(News report from Issue No. 314, published on Jan. 27 2017)
ALMATY, JAN. 27 2017 (The Conway Bulletin) — Kcell, Kazakhstan’s biggest mobile operator, felt the full force of the regional economic slowdown in 2016 with revenues falling 12.7% to 147b tenge ($444m), its lowest since 2009.
Kcell’s annual reports are important because they provide one of the few open and accurate insights into how Kazakh companies are handling a sharp economic slowdown triggered by falling oil prices and a recession in Russia.
The company, which is part- owned by the Kazakh government and part-owned by Sweden’s Telia, also said that a drop in profit margin had reduced its overall profit by 41% to just over 31b tenge ($94.5m).
In a statement, Kcell CEO, Arti Ots, admitted that 2016 had been tough.
“2016 was extremely challenging for Kcell, although at the end of the year we saw early signs of market stabilisation,” he said.
“As we move into 2017, there are positive signs of economic recovery in Kazakhstan, with an easing in consumer price inflation and indications of growth in the economy.”
A collapse in the value of the tenge, economic stagnation, job losses and a fall in vital remittance values all hit the Kazakh economy in 2016.
The specific improvements that Mr Ots referenced include a boost to revenues from demand for contract phones which has fed through into a third consecutive quarter of revenue increase.
“We are now seeing a positive interconnect balance with revenue exceeding costs and we expect this situation to continue in 2017,” he said.
The details of Kcell’s financial results also reflect the turbulence of the Kazakh economy, including rising inflation. Kcell said that costs had risen by 19.2% in 2016 to nearly 11b tenge ($33.5m). A spokesperson for the company said that some of this cost increase was triggered by a rise in staffing costs at new outlets.
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(News report from Issue No. 314, published on Jan. 27 2017)
JAN. 24 2017 (The Conway Bulletin) — Talks in Astana between the forces of Syrian president Bashar al-Assad and rebels broke up after two days with both sides promising to consolidate a ceasefire. The deal, overseen by Turkey, Russia and Iran, will be seen as a diplomatic success for Kazakhstan which hosted the talks. Kazakh president Nursultan Nazarbayev wants to build up a reputation for Kazakhstan as an agent for peace.
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(News report from Issue No. 314, published on Jan. 27 2017)
JAN. 24 2017 (The Conway Bulletin) — The Britain-based subsidiary of the US’ Fluor said that it had won a two-year engineering services deal with the North Caspian Operating Company (NCOC), the consortium of companies exploiting the giant Kashagan oil field in the Kazakh sector of the Caspian Sea. No value was put on the contract but it will be a boost to Fluor which has developed a strong regional strand of work.
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(News report from Issue No. 314, published on Jan. 27 2017)
JAN. 20 2017 (The Conway Bulletin) — Kazakhstan’s agriculture ministry confirmed that the H5 flu virus had been found in wild swans in the west of the country. A few days earlier two dead swans had been found in Atyrau. The H5 strain of bird flu can be passed onto people although it is not as infectious or as deadly as the more well-known H5N1 virus.
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(News report from Issue No. 314, published on Jan. 27 2017)
JAN. 20 2017 (The Conway Bulletin) — Nakamichi Corporation Berhad, a Malaysian independent oil company, signed a deal with Aktau Transit to invest $146m in two oil fields in west Kazakhstan. The deal commits the two companies to explore the oil fields.
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(News report from Issue No. 314, published on Jan. 27 2017)f
