Tag Archives: Kazakhstan

Kazakh Central Bank says that confidence in tenge has returned

APRIL 5 2016, ALMATY (The Conway Bulletin) — Kazakhs have increased the amount of tenge they are keeping in bank accounts, suggesting that they now trust the currency once again despite it halving in value over the past seven months, Kazakhstan’s Central Bank said.

In February, Central Bank data showed that the amount of tenge saved in banks rose to 1.53 trillion tenge ($4.5b), up 5% from January. Significantly, too, the proportion of tenge as savings grew to 22% of the total, up from 20% in January.

Analysts said that two factors had contributed to this renewed confidence in the tenge. The first was that this year, the tenge has actually strengthened against the US dollar to around 340/$1 compared to an all- time low in mid-January of 390/$1.

In March, Kazakhstan’s Central Bank heavily intervened in the currency market, buying $1.2b on the Kazakh Stock Exchange, around 2.6 times more than it bought in February.

This, together with high liquidity ensured by capital held at the Single Pension Fund, helped to improve the tenge’s position, analysts said.

“The Central Bank now faces the problem of too much liquidity and too high interest rates,” Askar Akhmedov, senior analyst at Halyk Finance, part of one of the largest Kazakh banks, said in a report.

Secondly, analysts said the Central Bank’s policy of increasing interest rates on tenge savings in banks to 14% from 10%, in addition to dropping the interest paid on foreign currency savings to 2% from 3% was working.

On the streets of Almaty this more positive view of the tenge was, generally, reflected.

A pensioner said: “It is our national currency, and I trust it but the 50% drop in its value was unpleasant, especially for pensioners.”

Most people that the Bulletin’s correspondent in Almaty spoke to agreed, and it will be a relief to President Nursultan Nazarbayev and the Kazakh government that confidence in the tenge is returning after a torrid 2015.

There were some who took a more cautious approach, though.

“Nowadays the position of the tenge is unsteady and it may weaken again. If I had to choose between tenge and dollar to put money in deposit, I’d probably choose dollar,” said Aigerim, a music teacher.

ENDS

(News report from Issue No. 275, published on April 8 2016)

Oil export ban is illogical, says ex-Kyrgyz official

APRIL 1 2016 (The Conway Bulletin) – For the past six years, there has been an informal ban on petroleum exports from Kazakhstan to Kyrgyzstan, former president of Kyrgyzstan’s Oil Traders Association, Zhumakadyr Akeneyev, said at a conference in Bishkek. According to him this practice is illogical within the framework of the Eurasian Economic Union and it has caused a rise in illegal trading. Kyrgyzstan imports almost all its petroleum products from Russia.

ENDS

(News report from Issue No. 275, published on April 8 2016)

Kazakh businessman to chair KazKom

APRIL 1 2016 (The Conway Bulletin) – Kenes Rakishev, a businessman favoured by the Kazakh political elite to front companies they are linked with, was nominated to become chairman of Kazkommerts- bank. Mr Rakishev, 36, has steadily increased his stake in Kaz- kommertsbank over the past couple of years. He led the merger between Kazkommertsbank and BTA Bank which was riddled with debt. Analysts said that the merger of Kaz- kommertsbank with BTA Bank was driven as much by politics as it was by business motives.

ENDS

(News report from Issue No. 275, published on April 8 2016)

Kazakhstan’s KMG EP ditches dividend payout for the first time

ALMATY, MARCH 31 2016, (The Conway Bulletin) — KMG EP, a subsidiary of Kazakhstan’s state-owned Kazmunaigas, said it will not pay dividends this year for the first time in a decade, reflecting the impact of low oil prices on the company.

KMG EP had paid dividends each year since its IPO on the London Stock Exchange in 2006.

“The board of directors has recommended not to pay dividends on ordinary shares,” the company said in a statement.

“The decision not to pay dividends is caused by a sharp decline in oil prices since the end of 2014, as a result of which the company’s cash flow and operating profit turned negative.”

The board decided to override an earlier recommendation from the company’s independent directors to pay out dividends this year.

KMG EP’s revenues collapsed by 37% in 2015. Oil prices have fallen from around $120/barrel in June 2014 to around $40/barrel now. Earlier this year oil cost less than $30/barrel.

ENDS

(News report from Issue No. 274, published on April 1 2016)

BPC Engineering and Kazakh gov. make turbine deal

MARCH 29 2016 (The Conway Bulletin) – BPC Engineering, the Russian distributor of California-based Capstone Turbine, said it reached an agreement with the Kazakh government to supply seven micro-turbines for the Beineu-Shymkent gas pipeline. Around 50 micro-turbines are needed in the pipeline, part of a $3.5b project to pump gas from west to south Kazakhstan.

ENDS

(News report from Issue No. 274, published on April 1 2016)

Kazakhstan releases activists

MARCH 30 2016 (The Conway Bulletin) – A court of appeal in Kazakhstan suspended prison sentences handed out to two Kazakh activists in January. Yermek Narymbayev and Serikzhan Mambetalin, imprisoned for posting messages on Facebook that the authorities said spread racial hatred, were released from prison and put under house arrest. Human rights activists saw this as a conciliatory move towards the EU ahead of President Nursultan Nazarbayev’s visit to Brussels.

ENDS

(News report from Issue No. 274, published on April 1 2016)

“World’s biggest bribe scandal” involves Kazakhstan and Azerbaijan

ALMATY, MARCH 29 2016, (The Conway Bulletin) — Unaoil, a consultancy based in Monaco, channelled millions of dollars of bribes to Emerging Market governments and their companies, including in Azerbaijan and Kazakhstan, on behalf of major Western firms, an investigation by Australia’s The Age and The Huffington Post said.

The report used data from a massive cache of leaked emails and corporate documents from 2001-2012 to unveil what it described as “the world’s biggest bribe scandal.”

The Ahsani family, Monaco millionaires Ata and his sons Cyrus and Saman, ran Unaoil as a sort of lobbying intermediary. They denied allegations of bribe paying.

“What we do is integrate Western technology with local capability,” Ata Ahsani told the investigation team.

Effectively, the report said of Unaoil: “Its operatives bribe officials in oil-producing nations to help these clients win government-funded projects. The corrupt officials might rig a tender committee. Or leak inside information. Or ensure a contract is awarded without a competitive tender.”

One of Unaoil’s biggest client was US engineering giant Kellogg Brown & Root (KBR), a former subsidiary of Halliburton, which operates in Azerbaijan and Kazakhstan.

In both Azerbaijan and Kazakhstan, KBR allegedly used Unaoil’s services to reach preferential deals and licences, mostly through personal connections and bribes to public officials.

KBR has not commented.

In Kazakhstan, leaked emails showed that Unaoil allegedly liaised with both Eni (codenamed “the spaghetti house”) and Kazmunaigas officials (codenamed “shashlik”) to secure tenders for KBR at the Kashagan offshore oil project.

Italian oil major Eni has not commented.

In Azerbaijan, both KBR and Swiss ABB allegedly won offshore oil contracts through insider information leaked by an in-country lead who had been bribed by Unaoil.

Swiss ABB has not commented.

After the report was published, police in Monaco raided the head- quarters of Unaoil. The FBI, the British Serious Fraud Office and the Australian Federal Police all launched major bribery investigations linked to the case.

ENDS

(News report from Issue No. 274, published on April 1 2016)

Kazakh plane crash-lands

MARCH 30 2016 (The Conway Bulletin) – A Bek Air Fokker plane carrying 116 passengers crash-landed at Astana airport, raising safety and security concerns for Kazakh aviation. Pilot Dmitri Rodin was hailed a hero after he performed a near textbook crash-landing after his front landing gear failed to engage as he approached Astana airport. Everybody aboard emerged unscathed from the crash.

ENDS

(News report from Issue No. 274, published on April 1 2016)

Kazakh Pres. visits EU

MARCH 30 2016 (The Conway Bulletin) – Kazakhstan President Nursultan Nazarbayev flew to Brussels to hold high-level talks with European Commission chief Jean-Claude Juncker and president of the Euro- pean Council Donald Tusk. Mr Nazarbayev wants the EU to consider establishing a visa-free regime for Kazakhstani citizens.

ENDS

(News report from Issue No. 274, published on April 1 2016)

Kazakh President’s daughter updates smartphone ban

MARCH 31 2016 (The Conway Bulletin) – Deputy PM Dariga Nazarbayeva said that the recently-imposed ban on the use of smartphones in government buildings in Kazakhstan does not apply to journalists. At a press conference, Ms Nazarbayeva said that the ban is only aimed at reducing leaks of classified documents.

ENDS

(News report from Issue No. 274, published on April 1 2016)