Category Archives: Uncategorised

Azerbaijan’s CB keeps interest rates steady

AUG. 1 2017 (The Bulletin) — Azerbaijan’s Central Bank kept its key interest rate at 15% saying that it had seen some improvements in key economic indicators over the past few months. Specifically, it said that growth in the non-oil sector had been 5.4% in the first half of the year, 3.7% increase in trade volumes and 2.2% increase in agriculture. The Central Bank said, though, that inflation remained a concern.

ENDS

(News report from Issue No. 336, published on Aug. 5 2017)

Wife of detained Kazakh businessman claims torture

Leave a Reply

JULY 31 2017 (The Bulletin) — Jamilya Aimbetova-Tokmadi, the wife of the detained Kazakh businessman Murathan Tokmadi, said that her husband had been beaten and forced to sign a testimony that his injuries were linked to a fall from a pull-up bar. The arrest of Mr Tokmadi for various financial crimes in mid- June surprised commentators. The owner of a major glass-making factory in Almaty had appeared on good terms with the authorities before his arrest. The authorities have not commented on the claims.

ENDS

(News report from Issue No. 336, published on Aug. 5 2017)

Kazakh economy improving says mobile operator Kcell

Leave a Reply

ALMATY, JULY 20 2017 (The Bulletin) — Macroeconomic conditions in Kazakhstan are improving, Kcell, the Kazakh mobile operator part-owned by Swedish-Finnish Telia, said in its first half report, an important view of Central Asia’s biggest economy.

Kcell’s revenue from sales was down by 1.1% in the first half of the year compared to the same period in 2016 at 71.54b tenge ($219.5m) but this was due to changes in tariffs and the tough market conditions in mobile operations.

More importantly, Kcell CEO Arti Ots said, the economy was starting to show sustained growth after three years of stagnation.

“In the first half of 2017, we saw continued improving trends in both macroeconomic indicators and the market environment in Kazakhstan,” he said. “In the domestic telecoms market, as previously reported, ongoing tariff adjustments are starting to give a positive impact, which we expect to see the results of in the second half of the year.”

Kcell reports are watched carefully by analysts as they are considered to give a balanced corporate view of Kazakhstan’s economy. Like the rest of the region Kazakhstan has been trying to shake off a tough three years linked to a collapse in oil prices and a recession in Russia.

Economists have also said the outlook for Kazakhstan has improved this year. The Kazakh Central Bank has said inflation is easing and the World Bank has estimated that GDP will grow at around 2.2% this year, compared to 1% in 2015 and 2016.

Kcell is fighting a 9b tenge fine for late payment of taxes in 2012-15 handed out this year by the Kazakh authorities, which it says is unfair. It said in its H1 report that it didn’t expect to have to pay the full fine. Telia is looking to sell its stakes, owned directly and indirectly, in Kcell after a corruption row focused on its operations in Uzbekistan tarnished its reputation.

ENDS

(News report from Issue No. 337, published on July 27 2017)

Currencies: Uzbekistan’s soum

Leave a Reply

JULY 27 2017 (The Bulletin) — So, it looks like we already have the big currency story of the year for the region. At least, that is, unless something goes terribly wrong with some of the more wobbly currencies out there – mentioning no names – Azerbaijan, Turkmenistan and even Kazakhstan.

The IMF returned from a mission to Tashkent saying that the government there was fully intending to relax currency exchange regulations that have strangled foreign investment. The official rate of the Uzbek soum is now just over 4,000/$1. The unofficial rate is more than double. How they merge is going to be the story to watch.

In the meantime, if anybody has missed it, it is clear that the Uzbek Central Bank has been managing a steady devaluation of its currency. The chart below shows the steps it has been making to devalue it – by more than 25% since the end of January.

On the equities front, KAZ Minerals continues to outperform, mainly because of another surge in copper prices.

ENDS

(News report from Issue No. 337, published on July 27 2017)

LSE courts Kazkahstan

Leave a Reply

JULY 17 2017 (The Bulletin) — Greg Hands, Britain’s trade and investment minister, lead a delegation to Kazakhstan in an apparent attempt to woo Kazakh state-owned companies that are considering IPOs to list on the London Stock Exchange. The London Stock Exchange has made little attempt to disguise its attempts to attract Kazakh companies to London despite previous problems with Kazakh corporate governance.

ENDS

international(News report from Issue No. 337, published on July 27 2017)

China to pay for new Tajik parliament

Leave a Reply

JULY 19 2017 (The Bulletin) — Tajikistan said that China had agreed to give it $230m to build a new parliament building in Dushanbe, more evidence that Beijing is exerting increasing influence in Central Asia by spending billions of dollars on various infrastructure and investment schemes. Earlier this year Tajikistan said that Saudi Arabia was prepared to pay $200m to fund the new parliament building.

ENDS

(News report from Issue No. 337, published on July 27 2017)

Uzbekistan’s and Germany’s Siemens signs MoU

Leave a Reply

JULY 24 2017 (The Bulletin) — Uzbekistan and Germany’s Siemens signed a memorandum of understanding to boost cooperation in the railway sector. The specifics of the deal were thin but it is being seen as a step towards more projects for Siemens in Uzbekistan.

ENDS

(News report from Issue No. 337, published on July 27 2017)

Uzbekistan promises to reform its currency exchange

Leave a Reply

TASHKENT, JULY 24 2017 (The Bulletin) — Uzbekistan plans to power ahead with reform of its currency exchange, the IMF said after a mission to Tashkent.

The Uzbek Central Bank has steadily cut the value of its soum currency, allowing it to devalue by around 25% this year, but there are still restrictions on trading it. Tearing up these restrictions would underscore the credentials of Shavkat Mirziyoyev, president since September last year, as a reforming leader.

In a statement, the IMF said: “The mission especially welcomed the authorities’ plan to frontload reforms of the foreign exchange system. Unifying exchange rates and allowing a market-based allocation of foreign exchange resources would allow the Central Bank of Uzbekistan to pivot to a stability-oriented monetary policy capable of effectively controlling inflation.”

The reference to inflation is important as the Uzbek Central Bank said earlier this year that it was having to raise its key interest rate to combat rising prices. Like the rest of the region, a collapse in oil prices and a recession in Russia have hit the economy of Uzbekistan.

Operating in Uzbekistan has always been problematic for foreign investors. There are two different exchange rates in the country. The official one set by the Central Bank, and the unofficial Black Market rate. A Bulletin correspondent said the Black Market rate for the Uzbek soum was 8,450/$1, compared to just over 4,000/$1 on the official market.

The IMF also said restructuring state-owned companies and banks and improving economic data were vital.

“The authorities’ decision to adopt a new CPI to measure inflation, starting in 2018, should already help improve the quality of a key statistical indicator,” the IMF said.

ENDS

(News report from Issue No. 337, published on July 27 2017)

Czech investors in Kyrgyzstan’s hydro projects may be a false company

Leave a Reply

BISHKEK, JULY 17 2017 (The Bulletin) — The Czech company that Kyrgyz President Almazbek Atambayev was lauding for agreeing a multi-million-dollar deal to build new hydropower stations may not even exist.

Less than a week after a triumphant Mr Atambayev was quoted in media talking up Liglass, a company based in a provincial Czech town, as the new backers of a hydropower project that Russia backed out of in 2015, it has emerged that even his own diplomats were warning him that the company only appears to exist on paper.

Kyrgyzstan has staked much of its future economic potential on developing its hydropower. The deal was considered important because

Russia’s Rushydro pulled out of a $700m agreement to develop the hydropower stations in 2015.

Liglass had, according to Mr Atambayev, promised to pay $37m for a 50% stake in the Upper Naryn HPP, which includes two major hydropower projects, and to build and operate a string of smaller hydropower stations.

ENDS

(News report from Issue No. 337, published on July 27 2017)

Tajikistan targets opposition activist

Leave a Reply

JULY 18 2017 (The Bulletin) — Human Rights Watch and the Norwegian Helsinki Committee accused the Tajik authorities of intimidating 10 relatives of anti- government activists who had taken part in a conference in Germany earlier in the month to mark the anniversary of the the end of the civil war 20 years earlier. HRW said that local officials had threatened the activists with having their property confiscated and banned them from leaving the country.

ENDS

(News report from Issue No. 337, published on July 27 2017)