SEPT. 2 2015 (The Conway Bulletin) – Kyrgyzstan’s parliament cancelled plenary sessions until after an election which is set for Oct. 4. Cancelling plenary sessions effectively marks the start of campaigning for the parliamentary election.
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(News report from Issue No. 246, published on Sept. 4 2015)
SEPT. 1 2015 (The Conway Bulletin) – The OSCE, Europe’s democracy and civil rights watchdog, said it was going to send 30 long-term and 350 short-term observers to monitor Azerbaijan’s parliamentary election set for Nov. 1. Relations between Europe and Azerbaijan are at a low. Europe has accused Azerbaijan of cracking down on human rights; Azerbaijan has accused the West of trying to organise a coup.
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(News report from Issue No. 246, published on Sept. 4 2015)
SEPT. 3 2015 (The Conway Bulletin) – Gas flows along the Baku-Tbilisi-Er- zurum pipeline have resumed after a second attack by Kurdish rebels, the head of BP-Azerbaijan’s press service Tamam Bayatli told Azerbaijani media.
Kurdish rebels have twice attacked a section of the pipeline in Turkey over the past month. On each occasion, BP said gas flows had barely been impacted as the pipeline had either been empty or running at reduced capacity for maintenance.
The PKK group has claimed responsibility for the two attacks and said that it will mount more despite a pledged by the Turkish security forces to strengthen security.
The Baku-Tbilisi-Erzurum pipeline, sometimes referred to as the South Caucasus pipeline, is an important part of the network pumping gas from the Caspian Sea to Europe. Its main feeder is Azerbaijan’s Shah Deniz project which is being enlarged to produce more gas for Europe.
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(News report from Issue No. 246, published on Sept. 4 2015)
AUG. 28 2015 (The Conway Bulletin) – London-listed Nostrum Oil & Gas reduced its offer price for Tethys Petroleum by a third to 0.147 Canadian dollars per share. Nostrum revised its offer after a new due diligence report. Both companies have their main operations in Kazakhstan’s oil sector. Tethys is also listed on the London Stock Exchange.
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(News report from Issue No. 246, published on Sept. 4 2015)
AUG. 28 2015 (The Conway Bulletin) – The Kazakh government has drawn up a draft bill which is says will do more to protect workers’ right although trade unions have said that it will reduce overtime pay and strain worker-company relations further.
The oil workers trade unions in western Kazakhstan have written to the government to ask it to change the draft labour law, setting up a stand-off between workers and the government.
Birjan Nurymbetov, the deputy minister for health and social development, told media that the new labour code was good for workers because it defended their rights and increased the criteria that an employer needs to test before he can sack an employee to 25 from 20.
“The new Labour Code fully protects the rights of employees against unfair dismissal,” he said.
The trade unions had a different view.
“The current project rate for overtime, holidays and weekends, is no less than 1-/12 to two times. This will be reduced to 1-1/4,” said Berdy Otebay, deputy head of the Aktau-based trade union Karazhanb- asmunaigas.
Relations between companies and workers have been strained since a protest in 2011 in the western oil town of Zhanaozen ended in clashes that killed at least 15 people. Companies have become increasingly wary of unions who have started to orgsanise workers more effectively, often securing pay rises.
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(News report from Issue No. 246, published on Sept. 4 2015)
AUG. 28 2015 (The Conway Bulletin) – Kazkommertsbank, one of the largest banks in Kazakhstan, posted a net loss of almost 55b tenge ($231m) in the first half of 2015, due to costs associated with bad loans inherited from the takeover of troubled BTA bank.
Kazkommertsbank had to sell assets to guarantee provisions for its non-performing loans (NPL) portfolio, which increased after the takeover of BTA earlier this year. Analysts said at the time of the merger that political, rather than business, reasons had driven the Kazkommertsbank’s takeover of BTA Bank.
The latest earnings results follow a 55% fall in net profit in 2014, a drop also associated with the takeover of BTA Bank. Sabina Amangeldi, senior analyst at Halyk Finance, said that the high non-performing loan (NPL) ratio in Kazkommertsbank’s portfolio would continue to weigh on its earnings potential.
“NPL share and cost of risk, remain high and earnings quality is still low,” she wrote in a note.
NPLs now account for 14.5% of Kazkommertsbank’s loan portfolio.
Ms Amangeldi also highlighted the weak tenge as a potential problem for Kazkommertsbank, an issue that the bank also pointed out.
Kazkommertsbank said the impact of the Central Bank’s decision at the end of last month to remove the tenge from its US dollar peg was still unclear.
“At the present time it is impossible to determine the impact of [the new monetary policy] on the Kazakhstan economy and the banking system,” it said.
The value of the tenge collapsed by 23% after the dollar peg was withdrawn in August, the second major devaluation in the value of the Kazakh currency since Feb. 2014.
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(News report from Issue No. 246, published on Sept. 4 2015)
AUG. 28 2015 (The Conway Bulletin) – Tajik president Emomali Rakhmon ordered his government to take urgent action to mitigate the impact of the worsening economic crisis hitting Central Asia. In one of his most frank omissions that Tajikistan’s economy is rapidly worsening, Mr Rakhmon told his ministers to adopt import substitution policies. Tajikistan has been hit by the drop in remittances from Russia.
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(News report from Issue No. 246, published on Sept. 4 2015)
SEPT. 1 2015 (The Conway Bulletin) – Askar Mamin, head of Kazakhstan Temir Zholy, the state-owned railway company, and Li Xueyong, the governor of the Jiangsu province in China’s far east, signed a series of documents that included an extra $600m investment in the development of the Khorgos special economic zone on the China-Kazakhstan border. Kazakhstan and China are spending billions on developing Khorgos, although a corruption scandal has slowed progress on the Kazakh side.
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(News report from Issue No. 246, published on Sept. 4 2015)
AUG. 28 2015 (The Conway Bulletin) – The value of imports into Kyrgyzstan fell by nearly 17% in the first half of the year, media reported by quoting official statistics. The data, while not giving specifics, still highlighted the economic slowdown in the region. Kyrgyzstan, like the other Central Asian countries, has been dealing with dropping remittances from Russia and a sharp fall in the value of its currency.
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(News report from Issue No. 246, published on Sept. 4 2015)
SEPT. 4 2015 (The Conway Bulletin) – The Kazakh government said that it was abandoning price controls on petrol. Heavy fluctuations in currency and oil prices have put these price controls under pressure.
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(News report from Issue No. 246, published on Sept. 4 2015)