Category Archives: Uncategorised

Grounded flights in Tajikistan, Kazakhstan, Azerbaijan

NOV. 11 2016 (The Conway Bulletin) — Air traffic in Central Asia and the South Caucasus continues to suffer from the regional economic slump, as major international carriers cut flights and leave the market to fickle domestic players.

Most notably this year, British Airways cut its London-Baku link, the last remaining destination for the British flag carrier in the region. The connection had lasted over 20 years, ever since BP started to negotiate the so-called Contract of the Century.

Demand for air transport, however, has shrunk, especially in the business market. Low

commodity prices have made many regional business unprofitable. This, added together with some damaging reputational issues, such as the delisting of Kazakhstan’s ENRC from the London Stock Exchange, have made many Western businesses wary of the region.

So it’s not surprising that Turkish Airlines dropped its connections with Osh and Khujand when it decided to downsize its global network because of a drop in demand. The second-largest cities in Kyrgyzstan and Tajikistan just cannot make the cut for commercially viable air links.

Turkmenistan’s new flights to Georgia were also postponed indefinitely this week, a sign that even diplomatically-motivated aviation routes need to be profitable.

On the positive, the Russian and Tajik aviation committees agreed a deal to end their short-lived dispute over routes. This is important, vitally important, for Tajikistan’s migrant workforce who rely so heavily on Russia for their income.

Air routes have become part of a modern-day annual commute for people in developing countries, needed to carry them to waiting jobs.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Kazakh oil company completes maintenance

NOV. 9 2016 (The Conway Bulletin) — Oil company PetroKazakhstan said it has completed planned maintenance and remodelling work at its Shymkent refinery three days ahead of schedule. Kazakhstan’s ministry of energy has repeatedly said that the country needs to upgrade its refineries and build a new one. London-traded KMG EP, a subsidiary of state-owned Kazmunaigas, owns a 33% stake in PetroKazakhstan, while China’s CNPC owns the rest.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Stock market: Centerra Gold

NOV. 11 2016 (The Conway Bulletin) — Encouraging production results at Kyrgyzstan’s largest gold mine, Kumtor, supported Centerra Gold shares in Toronto, although they were weighed down by a fall in the price of gold.

The company said that because a court in Bishkek has restricted its access to cash held by its Kumtor gold mine, it could not pay a quarterly dividend and may have to seek a cash injection to continue operations. It didn’t give any more details of this but it would be a departure from previous policy.

The spat with the Kyrgyz government, which has become increasingly heated in the past two years, seems to be constantly on the verge of breaking point.

In general, though, Centerra’s share price has followed the price of gold. However, should news from Kyrgyzstan continue to be negative, Centerra’s stock price might start diverging from this pattern.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Kyrgyz parliament approves new government

NOV. 9 2016 (The Conway Bulletin) — Kyrgyzstan’s parliament approved the composition of a new government, still dominated by Pres. Almazbek Atambayev’s Social Democratic Party, after a row over a referendum next month led to the collapse of the previous coalition. Two parties, Kyrgyzstan and Bir Bol, have entered the coalition and been given ministerial positions.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Kazakhstan electricity distributor to sell its stakes

NOV. 7 2016 (The Conway Bulletin) — KEGOC, Kazakhstan’s electricity distributor, renewed its plans to sell off its stakes in Kazenergoprovod, a Semey-based company that sells AC cables. First in May, then in August, KEGOC had unsuccessfully tried to sell its 49.9% stake for 98.4m tenge ($290,000). Founded in 2012, Kazenergoprovod has posted losses for three consecutive years. Local East Industry Company owns 51.1% of Kazenergoprovod.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

China’s CITIC Bank buys 60% stake in Kazakhstan’s Altyn Bank

ALMATY, NOV. 4 2016 (The Conway Bulletin) — Halyk Bank, one of Kazakhstan’s biggest lenders, said it will sell a 60% stake in its subsidiary, Altyn Bank, to China’s CITIC Bank at the start of next year, China’s most significant investment in the Kazakh banking sector.

The parties did not disclose the cost of the transaction, but experts believe it could be around $300m.

“The valuation of Altyn’s current assets as of September 30 is 316b tenge ($929m) and we can expect an increase in the bank’s activity in Q4. After premiums and non-performing loans discounts, the final figure could be around $300m,” Rasul Rysmambetov, director of the Public Fund Financial Freedom, told the Kursiv newspaper.

Altyn Bank is the successor of HSBC Kazakhstan that Halyk Bank bought in March 2014 for $176m.

China already owns Bank of China in Kazakhstan and Industrial and Commercial Bank of China in Almaty, two small-sized lenders founded in 1993. Owning Altyn Bank will boost its presence and could help the bank grow trade with China.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Turkish cuts flights to Tajik and Kyrgyz cities

NOV. 8 2016 (The Conway Bulletin) — Turkish Airlines, Turkey’s flagship carrier, dropped Osh, Kyrgyzstan’s second-largest city, and Khujand, a major city in northern Tajikistan, as destinations in a global revision of its connections. Turkish said it was suspending flights to 22 destinations and making around 30 aircrafts redundant in an effort to focus only on profitable routes.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Kazakhstan to subsidise mortgages

ALMATY, NOV. 8 2016 (The Conway Bulletin) — The Kazakh government will gives subsidies of 15m tenge ($43,455) to mortgages for new homes, Marat Idryshev, head of the Association of Kazakh Constructors said, part of President Nursultan Nazarbayev’s plan to breathe life into Kazakhstan’s flatlining economy.

Mr Nazarbayev announced the Nurly Zher programme in September, the name means Bright Land in Kazakh, a few months after a series of unprecedented anti- government protests focused on mortgages and land ownership showed just how frustrated ordinary Kazakhs were with the state of the economy.

Precise details of the $1.3b plan to re-energise Kazakhstan’s construction sector have been thin, so Mr Idryshev’s comments are important. He said that the mortgage market was severely undernourished in Kazakhstan.

“Today the proportion of mortgages given by commercial banks in Kazakhstan is no higher than 5%,” he told media. “In Russia it is 50-70%, a world standard. We will act in accordance with the experience of our neighbours. The government will subsidise mortgages.”

The subsidy should, Mr Idtzhev said, bring interest on mortgages down to around 10% from 17%.

The collapse of the tenge last year made it difficult for mortgage holders to pay back their loans. Almaty-based economist Zharas Akhmetov said the plan should dampen growing tension.

“This, firstly, will support the housing market. Secondly, this will remove tension in society,” he told the Bulletin. “One of the drivers of economic growth is construction, and not only construction of houses but also roads and industrial objects.”

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Georgia’s defence minister to return conscription

NOV. 7 2016 (The Conway Bulletin) — Georgia’s new defence minister, Levan Izoria, has said that he may reverse a decision by his predecessor to scrap military conscription next year, media reported. Georgia announced in June that it was going to scrap conscription, part of a drive to professionalise its military. It wants to join NATO and has sent its forces to Afghanistan and Iraq. By regional standards, Georgia’s army already looks and feels like a Western army. Only non- combat roles are filled with conscripts. Media reported that Mr Izoria had said that conscription was useful in helping ethnic minorities integrate.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Uzbeks mourn their great leader Karimov

SAMARKAND/Uzbekistan, NOV. 11 2016 (The Conway Bulletin) — Davlat, 33, was standing looking almost dreamily at Islam Karimov’s mausoleum. “I wish he’s ruled for another ten years,” he said.

In the West, Karimov, who ruled Uzbekistan from the collapse of the Soviet Union in 1991, is considered a brutal dictator who ordered his soldiers to shoot his own people. In Uzbekistan, though, ordinary people pay homage to his foresight and magnanimity.

A long line of people were queuing up at the end of last month to pay their respects to Karimov.

The authorities had decided to bury him in Samarkand, where he was born and his mausoleum, like the other grand mausoleums in Uzbekistan’s most famous and most written about city, will gradually become another tourist site.

The Registan, a square in front of three madrassas, is a short walk away. It is the city’s most popular tourist site. It is also where Farkhod, 55, earns a living directing tourists.

“I remember days, when we used to get products like flour and bread only from food cards and now there is nothing that we do not produce ourselves. Cotton, wheat, machines,” he said.

“This is all thanks to Islam Karimov. May his soul rest in peace.”

Back in Tashkent, Bobor smiled when he thought of Karimov.

“I won a golden medal in boxing in 2006 and the President gave me this car,” he said proudly. Although it is now old and problematic, he said that he wouldn’t dream of selling it.

Most ordinary Uzbeks have their own stories of Karimov, focused on his image as a great leader and saviour.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)