Category Archives: Uncategorised

Telecoms tech boost in Kyrgyzstan

MAY 19 2016 (The Conway Bulletin) — Kyrgyz telecoms operator Sky Mobile said it has introduced 4G technology across Kyrgyzstan. Sky Mobile, which operates under the Beeline brand, is Kyrgyzstan’s second-largest mobile operator. In September last year, Kyrgyzstan rolled out 4G frequencies. Sky Mobile is a subsidiary of Russia-based and New York-listed Vimpelcom. In its quarterly results this month, it said that Kyrgyz were spending more on their mobiles.

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(News report from Issue No. 281, published on May 20 2016)

Google Street View comes to Kyrgyzstan

BISHKEK, MAY 13 2016 (The Conway Bulletin) — Kyrgyzstan became the 77th country to feature in Google Street View, and the first in Central Asia and the South Caucasus, highlighting its relative openness and potentially giving its tourist sector a boost.

Tilek Mamutov, Google’s representative in Kyrgyzstan, said in a Facebook post that the new service will give people around the world the chance to make a virtual road-trip across Kyrgyzstan.

“Now users of Google Maps all over the world can take virtual trips along Kyrgyz roads and discover tourist attractions online,” he said.

Google Street View integrates with the California-based company’s mapping service to allow users to navigate their way though cities at street level with static images.

Mr Mamutov said it took around 1-1/2 years for Google to photograph virtually every road in Kyrgyzstan.

A similar programme was rolled out in some cities in Kazakhstan by Yandex, the Russian search engine, but there is no timeline yet for Google to capture each and every corner of the country.

Google Street View has been criticised for impinging on people’s privacy.

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(News report from Issue No. 281, published on May 20 2016)

Kazakh Pension Fund loans cash

MAY 17 2016 (The Conway Bulletin) – Kazakhstan’s Central Bank said it had given 62b tenge ($186m) in loans from the state’s Pension Fund to around 30 commercial banks, in an effort to boost their liquidity. Kazakhstan’s Pension Fund, previously held at commercial banks, was nationalised between 2013 and 2014. It held up to $20b. Last month, the Central Bank opened a credit line from the Fund for commercial banks.

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(News report from Issue No. 281, published on May 20 2016)

Is Tajikistan preparing to unleash its Nashi?

MAY 20 2016 (The Conway Bulletin) — So, it’s becoming increasingly clear that the authorities in Tajikistan are using students to promote their causes.

Excellent reporting from our ‘Man in Dushanbe’ has exposed this practice. He has spoken to several students who have said their universities and teachers have forced them to either march in favour of government policies or demonstrate outside the embassies of countries which have irritated President Emomali Rakhmon by giving his enemies sanctuary.

This is a well-worn strategy in the former Soviet Union. When I was a correspondent in Moscow between 2006-9 I reported heavily on the growth of a youth group called Nashi and its various offshoots. Nashi was effectively a massive mobilisation of Russian youth, often whipped up into a frenzy to support various policies promoted by Vladimir Putin and Dmitri Medvedev, who was the Russian President at the time.

Their summer camps, set up in the dense forests of northern Russia, were an eye-opener. Pictures of opposition activists dressed up as prostitutes were placed around the site. In Moscow, Nashi rallies were rowdy affairs, nationalistic and with a violent undercurrent.

The movement in Tajikistan hasn’t reached these proportions yet and is less sophisticated but the authorities are still unleashing, while trying to control, the same forces.

It’s a crude, dangerous technique.

BANKING ISSUES

Sticking with Tajikistan, news that the country’s second largest bank has been placed under administration doesn’t come as a surprise. TSB has been listing heavily for a while. The strains on the Tajik economy have just become too great and it was only a matter of time before something gave. The important issue to monitor now is whether this is contagious and other Tajik banks also cave in.

It’s also important to keep the banking failure in context. The Tajik banking system may be weaker than its neighbours but all the Central Asian economies have been under the same pressures. Remittances from Russia have dried up, currencies have halved in value and GDP growth rates are being revised down. These banks were giving out soft loans for years and many of these will have turned bad.

If a bank in Tajikistan effectively says it doesn’t have any more money left, could banks in neighbouring Kyrgyzstan and Kazakhstan be experiencing the same problem?

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(News report from Issue No. 281, published on May 20 2016)

Stock market: Georgia Healthcare Group

MAY 20 2016 (The Conway Bulletin) — London-listed Georgia Healthcare Group posted a perky 33% increase in revenues in Q1 2016, sending the Group’s share price up by 5.9% on May 17. In its brief history on the London Stock Exchange, GHG seems to have entered into its best period so far with share prices now firmly above £2. This week, it gained 16.7% to close at 231p on Thursday.

It had started trading in November 2015 at 170p/share, giving early investors a 35% return.

The company was also bullish about its acquisitions in Georgia’s healthcare market.

“We have just completed the acquisition of GPC one of the largest retail and wholesale pharmacy chains in Georgia,” GHG CEO Nikoloz Gamkrelidze said in a statement. “This acquisition supports our desire to be the leading integrated provider in all areas of the [Georgian] healthcare ecosystem.”

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(News report from Issue No. 281, published on May 20 2016)

Gelncore to sell futures in Kazakhstan

MAY 17 2016 (The Conway Bulletin) — Switzerland-based trader Glencore is considering selling gold futures, not its whole gold mining operation at Vasilkovskoye, a source close to the deal told the business website atameken.info. Glencore owns 70% of Kazzinc, the company that operates Vasilkovskoye which is located 300 km north-west of Astana. Reports had previously stated that Glencore was looking to sell its stake in the mine.

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(News report from Issue No. 281, published on May 20 2016)

Rakishev dismisses latest KazKom downgrade

ALMATY, MAY 18 2016 (The Conway Bulletin) — Kazkommertsbank, Kazakhstan’s largest lender, said it wants to buy back up to $500m in Eurobonds due this year, a bullish response to a recent double downgrade it received from international ratings agencies.

In a wide-ranging press conference, KazKom’s new chairman Kenes Rakishev said the bank has enough liquidity to pay for its debt, which will reach maturity later in 2016 and in early 2017.

“While our consultants advise us to buy back $300m, we are ready to buy back $500m,” Mr Rakishev told media and investors. “It’s a business decision as it is now cheaper to deal in the domestic market than it was when the bonds were issued.”

Mr Rakishev was appointed chairman of KazKom earlier this month after effectively completing a buyout of the country’s largest bank. He is the son-in-law of Kazakh defence minister, Imangali Tasmagambetov. He owns large stakes in several major

Kazakh companies and is often considered to be working on behalf of more senior members of the Kazakh elite.

Earlier in the week, the ratings agency Standard & Poor’s had cut KazKom’s debt rating to CCC+ because it said that via its merger with BTA Bank, the indebted bank that the government had owned, KazKom had inherited a swathe of bad debt in foreign currencies.

Some analysts have said that the KazKom/BTA merger and Mr Rakishev’s takeover were driven by politics and not business.

Mr Rakishev, though, brushed the downgrade aside and pointed out that other ratings agencies had already factored this into their calculations and issued earlier downgrades.

“I think we’ve passed the darkest zone and that we will move on to a completely new zone and concentrate on how to eliminate negative things that have occurred,” he said.

And Mr Rakishev also said that he wanted KazKom to shift its emphasis into the SME sector.

“We have an opportunity here to grow,” he said. “And not only in Almaty and Astana but also in the regions.”

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(News report from Issue No. 281, published on May 20 2016)

Business comment: Flying TSE – ULN

MAY 20 2016 (The Conway Bulletin) — The two coldest capital cities in the world will not be connected after all.

Air Astana postponed indefinitely the launch of a new link with Ulaanbaatar because of an ongoing spat between the Kazakh flagship carrier and the Mongolian civil aviation agency.

This can be easily dismissed as a hiccup in the business process, but there might be more to it.

Publicly, Air Astana said: “We had permission to start flights in March 2016. In April the CAAM [the Mongolian agency] unilaterally withdrew it without any valid grounds.”

Responding to a question from the Bulletin posted on Twitter, Air Astana said that the spat with Mongolia has nothing to do with the problems with Russia’s aviation agency, which left a Top Gear crew stranded in Moscow last year while a handful of flights were cancelled.

“It isn’t linked to Russia CAA,” the Air Astana tweet read.

But it’s hard to believe that the two incidents are not connected, since both happened in the same week and were cross-referenced by the Kazakh government when it addressed the issue. This might well be a case of international politics interfering with the business world in Central Asia.

But let’s take Air Astana’s version at face value. In this case, the spat with the Russian and Mongolian civil aviation agencies and the recent announcement that the launch of a connection to Tehran would be a triple setback for the company owned by the sovereign wealth fund Samruk- Kazyna (51%) and British BAE Systems (49%).

Maybe the bullish attitude of the previous months, boasting new routes and international agreements, is unjustified?

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(News report from Issue No. 281, published on May 20 2016)

Azerbaijan and Uzbekistan sign energy deal

MAY 18 2016 (The Conway Bulletin) – Azerbaijani and Uzbek state-owned energy companies signed a memorandum of understanding to explore and exploit oil and gas fields in Uzbekistan. SOCAR’s president Rovnag Abdullayev and Uzbekneftegaz’s chairman Alisher Sultanov met in Tashkent on the sidelines of an international oil and gas conference to sign the deal. It is perhaps telling that with oil prices so low, the Azerbaijani and Uzbek governments are having to fund development of their oil and gas sectors themselves.

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(News report from Issue No. 281, published on May 20 2016)

Georgia Healthcare Group posts strong Q1 results

MAY 17 2016 (The Conway Bulletin) — Georgia’s largest healthcare company, Georgia Healthcare Group (GHG), posted a 33% rise in revenue in the first quarter of 2016, highlighting rising demand from Georgians for private medical services.

Revenues increased to 71.7m lari (around $33m) in the first quarter of 2016, a jump of a third from 2015. The company attributed the positive results to its ability to grab market share in the healthcare sector.

And this is set to grow, according to GHG, which bought Georgian pharmaceutical retailer and wholesaler GPC earlier in May.

“We are clearly on track to deliver our target of more than doubling 2015 healthcare services revenues by 2018,” CEO Nikoloz Gamkrelidze said in a statement.

GHG also positively reviewed the recent tax reforms that the Georgian government put in place for next year. Under the new rules, undistributed profits will no longer be subject to a 15% profit tax. The government has said that the new tax rules are designed to encourage companies to invest, giving the economy a boost. In the short-term, though, the new tax code will reduce government income.

“We expect this amendment to take effect for our healthcare services earnings on 1 January 2017, and this is expected to significantly reduce the Group’s effective tax rate from 2017 onwards,” Mr Gamkrelidze said.

The healthcare sector in Georgia has proven resilient during the current economic downturn. This economic slowdown, which has hit the entire Central Asia and South Caucasus region, forced Georgia’s lari currency to fall by 30% in the past 18 months and has slowed GDP growth.

Last November, GHG listed its shares on the London Stock Exchange.

BGEO Group, a London-based holding company that owns Bank of Georgia, owns a 65.07% stake in GHG.

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(News report from Issue No. 281, published on May 20 2016)