Tag Archives: Kazakhstan

Turkcell submits bid for TeliaSonera’s Eurasian holdings

ALMATY, FEB. 26 2016, (The Conway Bulletin) — Turkcell, Turkey’s largest telecoms operator, said it had submitted a formal offer for TeliaSonera’s share in Fintur, a holding company that owns several stakes in telecoms operators across Central Asia and the South Caucasus.

TeliaSonera owns a 58.55% stake in Fintur. Turkcell owns the rest of the Netherlands-based company. Fintur, in turn, owns stakes in Azerbaijan Azercell, Georgia’s Geocell, Kazakhstan’s Kcell, Uzbekistan Ucell and Tajikistan’s Tcell.

If the sale goes through, the deal will reduce TeliaSonera’s exposure to the region. TeliaSonera will not, though, be able to walk away completely as the Swedish-Finnish company owns, directly and indirectly, 38% of Turkcell.

Other major Turkcell shareholders include Alfa Group and Cukurova Holding.

Many TeliaSonera shareholders had wanted the company to quit the region entirely after being accused of bribing senior officials in Uzbekistan for 3G licences nine years ago. The corruption investigation is ongoing.

In its statement, Turkcell also said it had submitted another offer for TeliaSonera’s directly owned 24% share in Kcell. If the two companies agree on the sale, Turkcell will own 75% in Kcell.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Kazakhstan’s senate agrees new budget

MARCH 3 2016 (The Conway Bulletin) – Kazakhstan’s senate passed a new budget for 2016 that reported an increase in state spending, a plan designed to kick-start the economy. The government’s actual income from taxes will drop in 2016, it is forecasting, by around 8% but a lump of cash earmarked for various projects in 2017 will instead be injected into the system this year.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Satybaldy invests in Kazakh IT and finance

FEB. 29 2016 (The Conway Bulletin) – Kairat Satybaldy’s new investment company Alatau Capital Invest, Baring Vostok Capital and Kaspi Bank signed a deal to co-invest in projects in Kazakhstan’s IT and finance sectors. Mr Satybaldy, President Nursultan Nazarbayev’s nephew, was the secretary of the ruling party Nur Otan until November 2015, when he became a shareholder in Kaspi Bank. Baring Vostok Capital is also a shareholder in Kaspi Bank.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Stock market: KAZ Minerals

MARCH 4 2016 (The Conway Bulletin) — London-based miner KAZ Minerals has continued to rally after publishing its annual report at the end of February.

Since Feb. 1, its share price has gained 61% in the London Stock Exchange.

In the past week, equity researchers have increased their target price and their rating for KAZ Minerals, formerly known as Kazakhmys.

Copper prices have gone up in the past weeks and this has allowed the company to be more bullish in its forecast.

One sign of warning, however, comes from the strengthening tenge. The stability of the Kazakh currency at around 350/$1 over the past weeks confirms appears to suggest that it has founds an equilibrium.

This means that last year’s foreign currency gains for KAZ Minerals were a one-off boon and the company will have to rely solely on increased production if it wants to keep its growth rate.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Editorial: Kyrgyz, Kazakh inflation

MARCH 4 2016 (The Conway Bulletin) – Inflation is the next enemy for South Caucasus and Central Asian countries hit by the regional economic downturn.

A fall in commodity prices at the end of 2014 pushed down revenues in the extractive sectors and sent the Russian rouble into a downward spiral. This then hit the value of local currencies, hurting people’s confidence in their Central Banks and their pockets.

Then came a fall in vital workers’ remittances from Russia, down by up to 45%.

Now, inflation appears to be on the rise, as Kyrgyzstan’s Central Bank chief Tolkunbek Abdygulov has warned.

In Kazakhstan, inflation is already at 15.1% year-on-year to the end of February 2016. It has been warning about a surge in prices and salaries since it effectively devalued its currency in Aug. 2015.

A couple of days after the devaluation, the Kazakh Central Bank said it was now making inflation-busting its top target. There is a lot of work to do.

ENDS

(Editorial from Issue No. 270, published on March 4 2016)

Kazakh foreign travel dries up

MARCH 1 2016 (The Conway Bulletin) – The proportion of Kazakhs travelling abroad for holidays or for work has fallen by 70% to 80% because of the devaluation in the tenge, media reported quoting the Kazakhstan Tourist Association chairman Rashid Shaikenov. The tenge has lost around 50% of its value in the past year, forcing people to ditch foreign holidays.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Inflation rises in Kazakhstan

MARCH 1 2016 (The Conway Bulletin) – Annualised inflation to the end of February measured 15.2%, its highest rate since 2008, the statistics agency said. The data is more evidence that the devaluation of the tenge last year by 50% has spurred overall inflation. The Central Bank had wanted inflation between 6 – 8%. It has now said its monetary policy is aimed at dampening inflation.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Business comment: Commodity slump hits richest

MARCH 4 2016 (The Conway Bulletin) — “Net worth” might not be hard data, but it’s still a decent indication of just how hard the economic downturn and the fall in commodity prices have hit Kazakhstan.

The owners of Kazakh miner ENRC lost a total of $1.8b in net worth in 2015, according to Forbes’ 2016 Billionaires list, showing the economic collapse that has hit Kazakhstan.

Aleksander Machkevich, Patok Chodiev and Alijan Ibragimov, the “Kazakh Trio,” lost around $600m each in 2015.

ENRC de-listed in London in November 2013 after disputes in the board and fraud investigations. The Kazakh Trio owns Eurasian Resources Group, a Luxembourg- based holding that owns ENRC.

Mr Ibragimov is the only member of the Trio registered in Kazakhstan.

Other members of the exclusive Kazakh billionaire club who have seen their fortunes dip include Dinara Kulibayeva, President Nursultan Nazarbayev’s daughter, and her husband Timur Kulibayev, each valued at $2b in 2015, down from a valuation of $2.1b in 2014.

Kazakhstan’s richest man, Bulat Utemuratov, fell 57 places in Forbes’ ranking. Mr Utemuratov is now the 771st richest man in the world, at $2.3b.

Finally, Forbes said that Vladimir Kim, who owns one-third of KAZ Minerals, saw his net worth decline from $1.8b to $1.5b.

Overall, the top five business people in Kazakhstan are worth $1.5b less than last year, that’s a 14% cut.

If the depreciation of the tenge has badly hit ordinary consumers and savers in Kazakhstan, the commodity slump remains the biggest headache for the high-flying business people.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Kazakh pensioners take jobs to survive economic slump

MARCH 4 2016, ALMATY (The Conway Bulletin) — Pensioners in Kazakhstan are giving up retirement and taking jobs to help them through a sharp economic downturn which has decimated the value of their tenge savings and their pension payments.

The trend is a major blow to the government ahead of parliamentary elections later this month. It had said that it will be able to look after all Kazakhs during the economic downturn.

But official data, suggested that for many pensioners in Kazakhstan, the downturn has been so heavy that they have had to return to work.

The size of the workforce aged over 65 in Kazakhstan, the usual retirement age, doubled in 2015, the ranking.kz website said quoting data from the state’s statistics centre.

In Almaty, a Conway Bulletin correspondent spoke to several elderly Kazakhs who had picked up a new job or had never quit work.

Nina Lozovaya, 81, was a chemistry and biology school teacher. She carried on working until she was 78. Now, though, her state teacher’s pension is so small that she was selling her clothes and other items on the street to earn money for medicine.

“The price for medications increased dramatically, and now I don’t have enough money to buy them,” she said. “Teachers’ pension is very small. I try to buy less medications now.” Her face crumpled with exasperation.

Further down the street an old woman was selling newspapers. She declined to be named but said: “I work because I need money, obviously.”

There is another side to the story behind Kazakhstan’s elderly workforce, though. People often carry on casual jobs after reaching retirement age to boost their income.

Sandugash, 73, worked in a small shop.

“After the death of my husband, I had many diseases and depression,” she said. “When I started working, each year I feel much better. And I can afford to go out sometimes because of the job.”

Life expectancy for men in Kazakhstan is 64 years and for women is 73 years. This means elderly women dominate the retirees’ workforce.

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(News report from Issue No. 270, published on March 4 2016)

Tethys seals deal with Kazakhstan’s Oilisol

ALMATY, MARCH 2 2016, (The Conway Bulletin) — Guernsey-based Tethys Petroleum said it had now sealed a life-saving financing agreement with Kazakhstan-based Olisol for around $32m, after months of doubt regarding the company’s ability to pay debts and continue its Kazakh and Tajik operations.

The two companies initially reached the deal on Feb. 22 and signed it on March 2, giving Tethys shares on the Toronto Stock Exchange a boost.

Under the deal, Tethys will receive $1m of finance and convert the remaining $5.25m debt facility into ordinary shares. If the Toronto Stock Exchange approves Tethys’ issue of 500m new shares, Olisol will then buy around 181m of these, and own a 42% stake in Tethys.

John Bell, Tethys chairman, said: “Tethys now has a strong in-country strategic partner which has committed to becoming a minority share- holder and who will help the company in its objective to supply the growing energy demand in China.”

Mr Bell and three other board members will step down upon completion of the deal.

“We leave the board having steered Tethys into a company focused on capital efficiency and cost discipline, well placed to become a strong platform for future growth,” he said.

Tethys had been in talks with Nostrum Oil & Gas for a takeover last summer. It later rejected the offer and turned to Kazakhstan’s Olisol.

In January, however, Olisol missed a payment scheduled in an earlier agreement putting the deal in jeopardy. The latest deal confirms that Olisol will in fact go ahead with the purchase and become a minority stakeholder in Tethys.

ENDS

(News report from Issue No. 270, published on March 4 2016)