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Stock Market: Central Asia Metals

JUNE 12 2017 (The Bulletin) — Shares in Central Asia Metals (CAM), the Kazakhstan focused miner, stayed steady this week on the London Stock Exchange despite some early calls by stock analysts to buy into it.

At the end of the week it was trading at 220p, roughly the level it has been anchored to since the start of May.

Still, some analysts said that now was a good time to buy into CAM. Peel Hunt has a target price of 290p against CAM, up from 270p. Canaccord Genuity also gives the stock a buy rating.

Across the Caspian Sea, Bank of Georgia, has also been given a lift by analysts. Investec raised its target price for Bank of Georgia to 4,000p from 3,950p. Several other brokerages moved their guidance to a ‘buy’ rating too.

Last month it issued the first ever corporate debt in Georgian lari, attracting widespread publicity. The IFC, part of the World Bank, said that it would step into support the lari issues, agreeing to buy up to a third of the $250m bond sale. Reports said that 20 other institutional investors had applied to buy a total of $207m of the bond, meaning the the IFC ended up with a smaller stake than it had offered.

Kaha Kiknavelidze, Bank of Georgia CEO, said: “IFC’s bid gave us great support in building investor confidence and creating early momentum in book build.”

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(News report from Issue No. 332, published on June 12 2017)

Uzbekistan’s President Mirziyoyev sacks rival Azimov as deputy PM

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TASHKENT, JUNE 6 2017 (The Bulletin) — Uzbek president Shavkat Mirziyoyev sacked deputy PM Rustam Azimov from his government, showing his ruthlessness in undermining potential rivals .

Mr Azimov had at one time been talked of as a potential successor for Islam Karimov, who ruled Uzbekistan since independence from the Soviet Union until his death in September 2016. His ambitions were undone, however, by the rise of Mr Mirziyoyev who had been PM under Karimov. Mr Azimov had been economy minister but was downgraded to foreign investment minister in December.

Local media reported, quoting government sources, that Azimov would now head the Export-Import Insurance company, a major demotion. He was to be replaced by as deputy PM by the relatively unknown deputy finance minister Jamshid Kuchkarov.

Immediately after the death of Karimov, Azimov had been considered one of the three most powerful people in Uzbekistan, alongside Mr Mirziyoyev and security chief Rustam Inoyatov. His demotion marks a victory for Mr Mirziyoyev who was always wary of his rival.

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(News report from Issue No. 332, published on June 12 2017)

Georgia to ban foreign farm ownership

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JUNE 9 2017 (The Bulletin) — Georgia prepared to ban foreigners from owning agricultural land, another marker in a long-running debate over just how much of Georgia’s farmland to allow foreigners to buy. Former President Mikheil Saakashvili had promoted Georgia as a place for foreigners to set up farms, encouraging both South Africans and Indians to move to Georgia until a popular backlash forced him to abandon the policy. Now, media reports that the ruling Georgian Dream coalition government is preparing to tweak the constitution to limit foreign ownership.

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(News report from Issue No. 332, published on June 12 2017)

Tajik President’s daughter becomes an author

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JUNE 8 2017 (The Bulletin) — Rukhshona Rakhmonova, daughter of Tajik president Emomali Rakhmon, published her new book entitled ‘Basics of Diplomatic Service’. She is the deputy head of the international organisations department within Tajikistan foreign ministry, a position she has held since November 2016. Ms Rakhmonova’s public profile has been increasing. She stood as a parliamentary candidate last year, winning her seat, and has also been head of the presidential administration.

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(News report from Issue No. 332, published on June 12 2017)

India and Pakistan join Central Asia-focused SCO

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ALMATY, JUNE 9 2017 (The Bulletin) — India and Pakistan joined the Russia and China led Shanghai Cooperation Organisation (SCO), pushing the military-economic group beyond Central Asia for the first time.

The SCO, set up in 2001 after Uzbekistan joined what had been called the Shanghai Five, now covers 3.1b people — nearly half the world’s population.

For Central Asia, the geographic focus of the SCO, the ascension of India and Pakistan confirms it as a fulcrum of world diplomacy and also pulls South Asia tighter into its economic sphere.

After its annual 2-day summit meeting in Astana, the SCO said: “The heads of state highlighted the historical significance of the SCO’s enlargement. They believe that granting full SCO membership to India and Pakistan at the current meeting of the SCO Heads of State Council will facilitate the further development and enhance the potential of the SCO.”

The success of the SCO has crept up on Western governments. It has largely been built on China’s drive into Central Asia.

Russia, through its Soviet legacy, has more access points into Central Asia than China and has largely used the SCO as a meeting place and for developing military ties. China, though, has used the SCO to dispense everything from cheap credit to infrastructure deals and military know- how and sees it as a vital cog in its ‘One Belt. One Road’ strategy focused on developing trade corridors to Europe.

Sheng Shiliang, a researcher at the Xinhua Center for World Affairs Studies, told Chinese media that SCO expansion was important to China.

“The SCO has never been just a security group from the beginning. The Belt and Road Initiative offers a timely and convenient framework for the SCO members to facilitate connectivity and ultimately, achieve free flows of goods, capital, service and technology,” he said.

For India and Pakistan, joining the SCO will increase their presence in Central Asia. Over the past five years, India has been trying to catch up with China’s progress in the region. It wants to develop markets and buy up energy projects.

Pakistan has developed links mainly through the TAPI gas pipeline, which will run from Turkmenistan and also through the CASA-1000 electricity scheme which will send power generated by hydropower stations in Tajikistan and Kyrgyzstan.

The only country in Central Asia that is not a member of the SCO is Turkmenistan, which has traditionally taken a more isolationist neutral stance to international organisations.

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(News report from Issue No. 332, published on June 12 2017)

UN Sec-Gen visits

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JUNE 7 2017 (The Bulletin) — UN Secretary-General Antonio Guterres started a tour of Central Asia by flying into Kazakhstan. He was due to attend a meeting of the Shanghai Cooperation Organsiation (SCO) in Astana before flying to Uzbekistan and Kyrgyzstan, Tajikistan and Turkmenistan. This is the first visit by a UN Secretary General to Central Asia since 2015.

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(News report from Issue No. 332, published on June 12 2017)

Quitting EITI has not hurt, says Azerbaijan’s minister

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JUNE 8 2017 (The Bulletin) — Quitting the Extractive Industries Transparency Initiative (EITI) has not dented Azerbaijan’s ability to attract international investments, Azerbaijan’s deputy economy minister, Sahil Babayev, said during a conference. Azerbaijan quit the EITI earlier this year after a row over media freedom and human rights. Analysts had said that quitting the transparency group would hit Azerbaijan’s ability to pull in major loans. The EBRD and other lenders, though, have signalled that they are still prepared to lend to Azerbaijan on certain projects.

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(News report from Issue No. 332, published on June 12 2017)

Azerbaijan’s plant to double Methanol

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JUNE 11 2017 (The Bulletin) — Azerbaijan’s methanol plant aims to double sales from 2019, the CEO of SOCAR Methanol, Elnur Mustafayev, said in an interview with ‘Consulting and Business’ magazine. Methanol’s main use is in the refining process of natural gas. The plant was built by AzMeCo and started production in June 2014. Mr Mustafayev said that it was the only methanol plant in the region and that it aimed to increase production to 500,000 tonnes per year, still some way short of its 750,000 tonne limit.

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(News report from Issue No. 332, published on June 12 2017)

Uzbek Parliament approves new CB chief

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JUNE 6 2017 (The Bulletin) — Uzbekistan’s parliament approved the relatively unknown Mamarizo Nurmuratov as the new Central Bank chairman. He had been chairman of the Senate’s budget and economic reforms committee. His appointment, as a replacement for Faizulla Mullajanov who died after 26 years in the post, highlights the relative junior nature of the Central Bank chief in Uzbekistan.

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(News report from Issue No. 332, published on June 12 2017)

Russia to reinforce military bases in Kyrgyzstan and Tajikistan

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JUNE 7 2017 (The Bulletin) — Russia plan to reinforce its military bases in Kyrgyzstan and Tajikistan in response to the move north of the Taliban in Afghanistan, Russian defence minister Sergei Shoigu said during a visit to Kazakhstan for a summit meeting of the Shanghai Cooperation Organisation (SCO). Earlier this year, the Taliban moved to within a few miles of the Amu Darya river that acts as the border between Tajikistan and Afghanistan, its furthest north. Russia keeps one of its largest overseas military bases in Tajikistan. The Kyrgyzstan base, at Kant near Bishkek, is far smaller. It is mainly used as an air base.

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(News report from Issue No. 332, published on June 12 2017)