MAY 21 2016 (The Conway Bulletin) — SOCAR, Azerbaijan’s state oil company, said one of its Turkish subsid- iaries wants to sell its 5.32% stake in the Turkish oil and chemical complex Petkim for 70.9m lira ($33m) according to Bloomberg. In March, Socar Turkey Enerji reduced its ownership in Petkim from 8.07% to 5.32%. SOCAR Turkey Petrokimya still owns a 51% stake in Petkim.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 282, published on May 27 2016)
MAY 23 2016 (The Conway Bulletin) — Ratings agency Moody’s said that a number of Azerbaijani banks could soon default, on the same day that the government said the country’s largest lender had piled up an unsustainable amount of bad assets, painting a bleak picture for the country’s financial sector.
Problem loans and liquidity issues have dented the financial health of Azerbaijani banks since the Central Bank decided to float the manat currency against the US dollar, triggering a sharp depreciation in December last year.
“Several banks with B3 rating have high risk of default,” Petr Paklin, analyst at Moody’s Financial Institutions Group was quoted as saying.
Moody’s downgraded Bank of Baku, Unibank and Xalq Bank to B3 in January and it is now saying that these could default. All three are among Azerbaijan’s 10-largest lenders.
The country’s biggest bank, the International Bank of Azerbaijan, amassed overdue loans and other toxic assets over the past few months at such a rate that it triggered a comment, and possible help, from the government.
“The cleaning process of toxic assets from IBA’s balance sheet is underway,” Samir Sharifov, Azerbaijan’s finance minister told local media on May 20.
IBA has not yet published the latest figures on the share of non- performing loans in its portfolio, but analysts believe it is well above the 12% previously reported. Notably, IBA holds around half of all loans in the country.
Azerbaijan’s government, as IBA’s largest shareholder with a 54.9% stake, could decide to write-off overdue loans, effectively bailing it out. Clearly, Azerbaijan’s financial sector has suffered from the sustained low oil prices and the sharp depreciation of the manat. The downturn has hit customers, who have been unable to pay back their loans.
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(News report from Issue No. 282, published on May 27 2016)
MAY 22 2016 (The Conway Bulletin) — Chinese company Hualing will open an elevator-manufacturing factory in Kutaisi, Georgia’s second largest city, officials said. Kutaisi mayor Shota Murgulia said the company is also negotiating four other projects with the government. The Hualing Group has pledged to invest 40m lari ($18.6m) over the next 30 years into its operations in the Kutaisi free industrial zone.
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(News report from Issue No. 282, published on May 27 2016)
MAY 23 2016 (The Conway Bulletin) — Kazakhstan’s sovereign wealth fund Samruk-Kazyna said it is considering selling off its 10.72% stake in Kazkommertsbank. Kenes Rakishev, a businessman with links to the elite, has increased his stake to 71.2%. He has offered to buy out minority stakeholders.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 282, published on May 27 2016)
MAY 20 2016 (The Conway Bulletin) — The number of employed people in Kazakhstan fell by 5% to 3.4m, the sharpest fall in recent years, signalling just how hard the economic crisis has hit the country. Unemployment data is unreliable in Kazakhstan, as the statistics can be manipulated. The data is more evidence of the impact of the economic downturn on lives of ordinary Kazakhs. Protests have broken out across Kazakhstan over the past few weeks. These started as protests against a land reform and have now morphed into wider protests against the government.
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(News report from Issue No. 282, published on May 27 2016)
MAY 24 2016 (The Conway Bulletin) — Life.ru, a Russian newspaper, said that GM Uzbekistan might soon stop selling its cars to Russia, as the company’s distributor in Voronezh is on the brink of bankruptcy. GM Uzbekistan, a joint venture between US-based GM and state owned UzAvtosanoat, faced problems last month, when a corruption case hit its top managers and slowed car exports to Russia. It is one of the most important industrial units in Uzbekistan outside the oil and gas sector.
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(News report from Issue No. 282, published on May 27 2016)
ALMATY, MAY 21 2016 (The Conway Bulletin) — Perhaps betraying the authorities’ nervousness that anti- government demonstrations are gaining momentum, police in Kazakhstan detained hundreds of people ahead of planned protests against land reforms and worsening economic conditions.
The scale of the arrests showed just how much support the protests have gathered.
What started as an isolated demonstration in Atyrau, western Kazakhstan, in mid-April against proposed reforms to the land code, which would have allowed foreigners more rights, has now morphed into more general outpouring of discontent against the government.
In Almaty, police wearing black balaclavas detained people before they could reach a planned demonstration in the central square. In Astana, and other cities across the country, police detained smaller numbers of people.
Anti-government demonstrations are rare in Kazakhstan but ordinary Kazakhs, frustrated with worsening economic conditions brought on by a collapse in oil prices and a recession in Russia, have latched onto the land reform issue as a channel for their discontent. Even a pledge earlier this month by President Nursultan Nazarbayev to defer the land reforms has not quashed the protests.
Rinat, a protester in Astana, explained the protesters’ frustrations. “I do not want a change of power, a revolution or a war,” he told the Bulletin’s correspondent.
“I just want the authorities to hear public opinion, conduct fair elections so that the generation of my children can live without loans and be sure of their future.”
These complaints were echoed across the country. “It is not the issue of nationalism, separatism or about outside influences,” said Sergei, a protester in Atyrau. “It is about distrust in the administration that hasn’t done anything good for the economy for a long period of time.”
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(News report from Issue No. 282, published on May 27 2016)
MAY 25 2016 (The Conway Bulletin) — Tajikistan’s airline company Somon Air received a safety certificate (Operational Safety Audit, IOSA) from the International Air Transport Association (IATA), the first Tajik carrier to comply with industry standards. Contacted by The Bulletin, IATA said that Somon Air has not yet applied for membership. Kazakhstan’s Air Astana and Uzbekistan Airways are the only two Central Asian IATA members.
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(News report from Issue No. 282, published on May 27 2016)
MAY 27 2016 (The Conway Bulletin) — Make no mistake, the protests in Kazakhstan are no longer about land reform issues – they are almost entirely focused on ordinary Kazakhs’ frustrations with the elite and their government.
For nearly two years Kazakhs have watched as their economic outlook and livelihoods have worsened. Never mind what President Nursultan Nazarbayev says about Kazakhs never having had it so good. For ordinary Kazakhs it doesn’t feel that way.
The mass arrests last week ahead of planned protests are an indication of just how worried the authorities are over the groundswell of anti-government feelings. Mr Nazarbayev and his advisers look out of touch. They sit in their Ivory Towers while police wearing black balaclavas chase demonstrators around the streets. This doesn’t give the impression of being in control.
This year, the Kazakh authorities have clamped down on the press and forced through a snap election. Despite these heavy-handed tactics, they still don’t look fully in control.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 282, published on May 27 2016)
MAY 23 2016 (The Conway Bulletin) — The Georgian authorities inaugurated construction work in Tbilisi at what will become the fifth-largest technological institute in the world. The Cartu Foundation, supported by Georgia’s richest man Bidzina Ivanishvili, will cover the costs, which will run to several million euros, according to the government. It is still unclear when the Georgia’s Technological Institute will be completed. Georgia is trying to position itself as a tech hub for the region.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 282, published on May 27 2016)