Author Archives: admin

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)

Tajikistan plans massive war games

MARCH 1 2016, DUSHANBE (The Conway Bulletin) — With governments in Central Asia increasingly worried about the Taliban, Tajikistan’s said that it will hold one of its largest ever military exercises with Russia, involving at least 50,000 soldiers.

Faridun Mahmadalizoda, a spokesman for the Tajik defence ministry, said that the military exercise will last from March 15-20 in the south of the country near the border with Afghanistan. Soldiers from the Russian military base in Tajikistan will take part in the war games, although the final number hasn’t yet been decided.

Both Russia and Tajikistan have warned of the increasing threat of the Taliban. Last year the Taliban briefly captured the town of Kunduz on the Afghan-Tajik border and this year there have been a number of reports of attacks on power lines running from Central Asia to Kabul. This is especially important as Central Asian states have committed to power and gas export projects to Pakistan and India which involve Afghanistan as a transit state.

And boosting the military is also a popular policy with ordinary Tajiks who worry about stability.

A 35 year-old accountant in Dushanbe said that Tajikistan should ensure stability at any price.

“The government wants to show the Taliban that we have an army, in case the terrorists want to cross the border,” he said, keeping his hands crossed on his chest.

A Dushanbe-based political analyst, who did not want to be named, told The Conway Bulletin’s correspondent in Dushanbe that Russia was pursuing a foreign policy in Central Asia based around boosting its military and playing up fears about renewed Taliban strength.

“The new exercises are first of all a signal to all superpowers that are interested in Central Asia about who exactly is the boss here,” he said.

“It’s also a signal to extremist groups, who have been thinking about moving across the (Afghan- Tajik) border onto the other side of the river in an act of war.”

ENDS

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

Russia’s Polymetal buys second gold mine in Armenia

MARCH 2 2016 (The Conway Bulletin) — Russian miner Polymetal bought the Kapan gold mine in Armenia from Canada’s Dundee Precious Metals, in a move that consolidates and expands its Armenian assets.

The deal, worth up to $50m, is Polymetal’s second acquisition in Armenia, after it bought the Lichkvaz gold mine last year for $13.2m.

Kapan, a medium-sized mine, located around 300km south of Yerevan, is surrounded by other gold reserves. Lichkvaz is 70km away from Kapan. According to the latest survey, it holds 16m tonnes of ore. Polymetal wants to make it a processing centre for its operations in Armenia.

“We believe Polymetal can transform Kapan from a low-margin asset into a capital-light profitable regional processing hub with sizable production” said Vitaly Nesis, Polymetal CEO.

Analysts agreed that the deal would bring major benefits to Polymetal’s Armenia operations.

“Polymetal bought Kapan to enable synergies with Lichkvaz. I think Polymetal will focus on developing these two mines first (before looking at others),” said Anna Mulholland, director of equity research for European metals at Deutsche Bank.

Dundee will receive $10m in cash and $15m in shares from Polymetal. Dundee is also entitled to receive a 2% royalty, capped at $25m.

Kapan produced 410,000 tonnes of ore in 2015, a 2% increase compared to 2014. Last year, Dundee said production at Kapan could rise to around 1m tonnes per year.

Polymetal’s operations are mostly concentrated in Russia. In May 2014, Polymetal bought the Kyzyl gold mine in Kazakhstan from Timur Kulibayev, son-in-law of President Nursultan Nazarbayev for $619m.

ENDS

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

Tajik President warns of droughts

MARCH 1 2016 (The Conway Bulletin) – Tajik President Emomali Rakhmon warned people that reservoirs in Tajikistan were low because of a relatively dry winter and that droughts were likely this summer. It’s unusual for Mr Rakhmon to give drought warnings. Tajikistan’s rivers feed downstream Turkmenistan and Uzbekistan, meaning that droughts would have knock-on consequences and could strain bilateral relations.

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)

Baskin Robbins to enter Tajik market

FEB. 26 2016 (The Conway Bulletin) – US ice cream maker Baskin Robbins said it wants to open its first cafe in Tajikistan, although it didn’t say when. Baskin Robbins operates in several countries in the former Soviet Union, including Armenia, Kazakhstan and Turkmenistan. French retailer Auchan opened a store in Dushanbe last year.

ENDS

(News report 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)