Tag Archives: Uzbekistan

Uzbek authorities look power upgrade plan

NOV. 23 2015 (The Conway Bulletin) – Looking to boost power production to meet rising demand, the Uzbek authorities unveiled a $900m upgrade programme for its hydropower stations. As populations increase and living standards rise, demand for power has risen across Central Asia and the South Caucasus pressuring the authorities into investing in their power generation infrastructure. Earlier this month the Uzbek government announced a privatisation plan that included one of its cement makers.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Uzbekistan increases cement production

NOV. 24 2015 (The Conway Bulletin) – Uzbekistan has increased its cement production by 7% so far this year, media reported quoting industry executives (Nov. 24). They also said that they plan to add more capacity to their production. Uzbekistan is a net exporter of cement. It has become big business and is a major employer.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Currencies: Kyrgyzstan’s som, Georgia’s lari

NOV. 27 2015 (The Conway Bulletin) — The only currency that moved substantially this week was the Kyrgyz som, which lost 2.3%, closing at 74/$1 on Friday.

The Kyrgyz Central Bank intervened heavily this week to prop up its currency, which looked like it was losing traction and could have spiralled downwards. During the day on Nov. 26, the exchange rate had surged to 77-79 som/dollar, which prompted the Central Bank to sell $7m in the currency market and enabled the currency to recover somewhat and move back to 74/$1.

Tolkunbek Abdygulov, the Central Bank chief, said this week the exchange rate was influenced by speculators.

All other currencies were stable.

In the South Caucasus, the Georgian lari maintained its level of 2.40/$1 and the Armenian dram was also stable at 480.8/$1.

In Central Asia, the Kazakh tenge floated at around 307/$1 throughout

the week. The Tajik somoni continued its gentle depreciation, and now trades at 6.7/$1.

The dollaruz.com website which monitored the Black Market rate for the Uzbek sum, appears to have closed.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Turkcell moves to buy mobile companies from TeliaSonera in Uzbekistan and Tajikistan

NOV. 18 2015 (The Conway Bulletin) — Turkcell, Turkey’s biggest mobile service provider, is planning on buying TeliaSonera’s assets in Central Asia and the South Caucasus, Bloomberg News reported by quoting a source close to the company.

The source said that Turkcell had appointed HSBC and Citigroup to advise it on its potential bid to buy the stake in Fintur from TeliaSonera that it doesn’t already own.

Turkcell owns 41.45% of Rotterdam-based Fintur; TeliaSonera owns the rest. Fintur runs brands in Georgia, Azerbaijan, Kazakhstan and Moldova with 18m users.

Turkcell CEO, Kaan Terzioglu, appeared to confirm the company’s intention to buy TeliaSonera’s stake in Fintur. Answering journalists’ questions in Istanbul on when a deal would be finished, he said: “in 2016 if all the negotiations go well.”

The deal is important because it moves TeliaSonera towards its stated aim of selling its companies in Central Asia and the South Caucasus. It also owns businesses in Uzbekistan and Tajikistan which it wants to find a buyer for.

Earlier this year, it said that it wanted to sell up after investigations began into a corruption scandal at its Uzbek company. It is alleged to have paid Gulnara Karimova, the eldest daughter of Uzbek president Islam Karimov, millions of dollars in bribes to gain access to the Uzbek mobile market in 2007/8.

Telenor, its Norwegian rival, is also investigating alleged corruption at its Uzbek subsidiary. It owns a 33% stake in Russia-based Vimpelcom which owns a company in Uzbekistan that also, allegedly paid a bribe to enter the market.

Turkcell is Turkey’s main mobile operator. Its shareholder structure has been argued over since 2011. It has shares listed on the New York and Istanbul stock exchanges but its institutional shareholders include Turkey’s Cukurova Holding, Russia’s AlfaGroup and TeliaSonera.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Uzbekistan detains rights activist

NOV. 16 2015 (The Conway Bulletin) – Uzbek opposition media reported that police detained Uktam Paradayev, a well-respected human rights activist. It is unclear if Mr Paradayev has been charged with anything. Earlier this month Mr Paradayev was denied an exit visa to leave Uzbekistan.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Pakistan PM meets Uzbek President

NOV. 17 2015 (The Conway Bulletin) – Pakistani PM Nawaz Sharif met with Uzbek president Islam Karimov in Tashkent where the leaders signed deals that should deepen bilateral relations .

The trip was significant for Pakistan because it is looking to boost ties with Central Asia and important for Uzbekistan which needs allies to sell cotton to.

Cold-shouldered by the West, which avoids buying Uzbek cotton because of allegations it is picked using child labour, Uzbekistan has boosted relations with Pakistan as it buys Uzbek cotton for its garments industry.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

TeliaSonera’s appoints Tajik Tcell’s head as Eurasia VP

NOV. 17 2015 (The Conway Bulletin) — Swedish mobile provider TeliaSonera appointed the former head ofTcell, Tajikistan’s biggest mobile network provider, Mansur Khamidov to be a vice-president in charge of the Eurasia region. TeliaSonera is currently restructuring its operations and has said that it wants to sell its Eurasia companies, partly because of corruption allegations alleged against its Uzbek subsidiary. As well as Tajikistan, TeliaSonera owns mobile operations in Kazakhstan, Uzbekistan, Azerbaijan and Georgia.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Uzbek President signs investment programme

NOV. 18 2015 (The Conway Bulletin) – Official media in Uzbekistan reported that President Islam Karimov has signed a resolution to begin a $16.6 investment programme running in 2016 and 2017. The main focus of the programme is to upgrade and modernise the country’s technology and energy sectors. Projects include part of a gas pipeline to China and the construction of both a petro-chemical plant and a thermal power station.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Uzbekistan earmarks $100m to prop up banks

NOV. 20 2015 (The Conway Bulletin) – Uzbekistan’s government will allocate 275b sums over the next 13 months or so to act as a safety-net for its four biggest banks to survive the region’s worsening economic depression.

The announcement of a credit line to state-owned Agrobank, the National Bank for Foreign Economic Activity, Microcredit Bank and Qishloq Qurilish Bank – is a another indicator that Uzbek policy makers have begun to recognise and react to the region’s worsening economic outlook. Last week, the Central Bank indicated that it was trying to gradually reduce the official value of its sum currency, in line with devaluations across Central Asia.

The banks’ safety-net, worth around $101m at the official exchange rate but unofficially worth around $45m at the Black Market rate, has been earmarked to support the banks’ liquidity, media reported. This effectively means it is a government slush fund created to bail out the banks.

The cash has been parcelled up, with 100b sums allocated to Agrobank, 75b sums to the National Bank for Foreign Economic Activity and 50b sums each for Microcredit Bank and Qishloq Qurilish Bank.

Earlier this month, the Fitch ratings agency said that Uzbek banks were generally stable.

“As internal capital generation at the state banks is moderate and lags growth, state banks are getting regular capital contributions from the government in order to comply with regulatory capital requirements,” Fitch said in its report on Nov. 11.

“Liquidity is comfortable due to solid buffers as well as potential state support.”

It also said that non-performing loans, considered those over 90 days late, were relatively low with 3% at Agrobank and 14% at Microcredit Bank.

Like the rest of the region, though, Uzbekistan has been struggling to cope with the sharp downturn in Central Asia’s economic health. This month the Uzbek government even started talking about selling off stakes in state-owned companies to increase capital and boost their knowledge- base.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Currencies: Kazakhstan’s tenge, Kyrgyzstan’s som

NOV. 20 2015 (The Conway Bulletin) — The Kazakh tenge was steady this week, trading at around 307.2/$1, off an all-time low against the US dollar of 311/$1 earlier in November.

There is still much speculation by analysts on just how monetary policy in Central Asia’s biggest economy is going to change under new Central Bank chief Daniyar Akishev. He said that inflation was too high and appeared to make this his priority.

With this in mind, expect another interest rate rise at the Central Bank’s policy meeting next month — if the policy wonks don’t cancel it again. There are, though, two urgent problems, it seems to me, with the Kazakh monetary policy. People don’t know what it is or whether it works.

The new key interest rate — overnight repo rates — was only introduced in September. It was raised in October to 16% from 12% and then ignored in November when the Central Bank cancelled its policy meeting at the last moment. Does this interest rate have any credibility? Does the market even care about it? It doesn’t appear to have had any effect so far.

And Mr Akishev appeared to acknowledge as much when he said that a fall in oil price would send the tenge tumbling further. Oil prices, outside the Kazakh Central Bank’s control, are the driver of tenge value and not its key interest rate.

In neighbouring Kyrgyzstan, the som currency did continue to set new records against the US dollar. It hit an all-time low on Friday of 72.5/$1 versus 71.9/$1 at the start of the week. On Oct 1, the som had been valued at 68.8/$1, meaning that it has lost over 5% of its value in the past seven weeks.

As the Bulletin reports in the main section of the newspaper, information coming out of Turkmenistan is that its manat currency has devalued and that the government has placed restrictions on the amount of cash people can withdraw from the banks. Earlier this month, The Bulletin also reported on the devaluation of the Uzbek soum.

Even staunchly controlled currencies are feeling the pressure, it seems.

And over in the South Caucasus, it is a similar story. Since its sharp 33% devaluation in February, the Azeri manat has been kept steady but analysts have increased chat of a need to devalue again.

Both the Armenian dram and the Georgian lari were steady through the week.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)