Tag Archives: Azerbaijan

No to privatising IBA, says Azerbaijani official

MARCH 17 2017 (The Conway Bulletin) — Azerbaijani officials said that it was too early to start privatising the International Bank of Azerbaijan, the country’s largest bank, going back on a pledge made at the end of last year. In an interview with Reuters, Rustam Tahirov, strategic services department head at Financial Market Supervision Agency, said that the government wasn’t able to reduce its 76.73% stake in IBA. It increased its stake from 55% at the start of the year, effectively propping up IBA during an economic downturn that has threatened to scupper the Azerbaijani banking sector.

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(News report from Issue No. 322, published on March 27 2017)

Azerbaijan’s economy will shrink again in 2017, says ADB

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MARCH 14 2017 (The Conway Bulletin) — Azerbaijan’s economy will continue to shrink in 2017, the Asian Development Bank said in a grim assessment of the country’s outlook following a disastrous 2016.

Overall, the ADB said that the Azerbaijani government’s prediction of 1% growth in 2017 was wildly over-optimistic and that a decrease of 1.1% was more likely. Last year,

Azerbaijan’s oil-backed economy shrunk by 3.8%, its worst year of economic activity since the 1990s.

“Our preliminary assessment as of today is minus 1.1 percent … and it’s most likely that our … assessment of GDP for this year will remain at the negative level,” Nariman Mannapbekov, the ADB’s country chief, told Reuters in an interview in Baku.

The ADB assessment will be a major blow to Azerbaijan which has been looking for some growth.

And, once again, Mr Mannapbekov urged the Azerbaijani government to focus on diversify the economy away from oil.

The slump in oil prices has hit Azerbaijan hard, forcing the government to slash funding.

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(News report from Issue No. 321, published on March 20 2017)

BP appoints new region chief in Azerbaijan

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MARCH 16 2017 (The Conway Bulletin) — BP, the dominant oil major in Azerbaijan, appointed Gary Jones, previously head of drilling as its new regional chief in Baku. Mr Jones’ predecessor, Gordon Birrell, has moved to London as COO for production. BP has been under pressure from Azerbaijani president Ilham Aliyev to boost the performance of the country’s main oil producing site, Azeri-Chirag- Gunashli (ACG), where output has dropped.

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(News report from Issue No. 321, published on March 20 2017)

Azerbaijani GP promoter criticises F1

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MARCH 15 2017 (The Conway Bulletin) — The promoter of Baku’s Formula One Grand Prix, Arif Rahimov, called criticism of the race by Formula One’s new owners as “ignorant”. The week before Greg Maffefi, CEO of Liberty, Formula One’s owners, said that the Baku GP did nothing to improve and build the health of the brand and the business. Mr Rahimov said: “Mr Maffei has been involved in F1 for less than half a year. We’ve been working on this project for three years now so we have more experience with F1 than them. I think saying something like this is ignorant.” Baku hosts its GP, its second, on June 25.

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(News report from Issue No. 321, published on March 20 2017)

Rail tariff cut to boost trade in Azerbaijan

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MARCH 13 2017 (The Conway Bulletin) — Looking to boost trade along the so- called North-South Transport Corridor between Russia and India, Azerbaijan, Russia and Iran agreed to cut rail tariffs by 50%, media reported. The three countries met in Moscow to discuss developments, including a new bridge over the Astara river that joins Azerbaijan’s and Iran’s railway. The North-South Corridor is considered an important component for boosting regional trade.

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(News report from Issue No. 321, published on March 20 2017)

Currencies: Azerbaijani manat

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MARCH 20 2017 (The Conway Bulletin) — The Azerbaijani manat continued its strong return to form, pushing up to 1.7286/$1 by March 17, its strongest level against the US dollar since the beginning of November 2016.

At its weakest point, the manat had been valued at 1.9517/$1 in February, meaning that it has strengthened by nearly 11.5%.

The European Bank for Reconstruction and Development (EBRD) has said that this manat strength is probably due to a transfer of 7.5b manat ($4.3b) from the SOFAZ, the state oil fund, to the Central Bank to boost the economy. The Azerbaijani economy has been looking fragile, because of the depressed price of oil, and it has needed the cash injection.

The Kazakh tenge and the Georgian lari also rose marginally in value throughout the week, although the Kyrgyz som and the Tajik somoni fell in value. The Kyrgyz som is surfing near its lowest point since mid-September 2016.

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(News report from Issue No. 321, published on March 20 2017)

Azerbaijan finds corpse in Caspian

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MARCH 13 2017 (The Conway Bulletin) — Another male corpse was found in the Caspian Sea, possibly one of the missing men from an oil platform that collapsed into the Azerbaijani sector of the sea that killed 9 people in December. Bodies of the dead men have been washing up across the Caspian Sea coastline. The year before, at least 30 people had died when a storm caused a fire at a Caspian Sea oil rig.

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(News report from Issue No. 321, published on March 20 2017)

Azerbaijan buys trains from Kazakhstan

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MARCH 13 2017 (The Conway Bulletin) — A Kazakh factory producing trains has delivered 10 locomotives to Azerbaijan, media reported. The Trend news agency said that Lokomotiv Kurastyru Zauyty had also sent locomotives to Kyrgyzstan, Tajikistan, Ukraine and Turkmenistan. This is important for Kazakhstan as it is trying to boost its manufacturing sector. Azerbaijan is, itself, trying to boost its role as a pivot for global trade and has said it will buy more trains if it can secure a north-south trade route between India and Russia.

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(News report from Issue No. 321, published on March 20 2017)

Azerbaijani President meets Hollande in Paris

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MARCH 15 2017 (The Conway Bulletin) — Azerbaijani president Ilham Aliyev was in Paris to meet with French President Francois Hollande, a week after his foe Armenian President Serzh Sargsyan also travel to the Elysee Palace. The meeting was framed around ongoing talks to find a permanent peace for the disputed region of Nagorno-Karabakh, which Azerbaijan and Armenia-backed rebels have officially been at war over since the early 1990s. A UN ceasefire has held a shaky peace since 1994. There were no particular deals announced at the meeting.

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(News report from Issue No. 321, published on March 20 2017)

Fitch says more banks in Azerbaijan are likely to fail before the end of the year

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MARCH 16 2017 (The Conway Bulletin) — Fitch the ratings agency said that more banks in Azerbaijan would fail this year as the economy continued to labour under the pressure of depressed oil prices and bad debts.

The Azerbaijani banking sector has been faltering, forcing a major investment by the government into its biggest bank — International Bank of Azerbaijan. It now owns 76.7% of the bank, up from 55%. Last year, several smaller banks had their licences removed or were forcibly merged.

“Fitch expects the banking sector to remain loss-making in 2017 and we have Negative Outlooks on most of the Azerbaijani banks we rate,” it said in a statement.

“Banks will not be able to absorb new NPLs (non-performing loans) through growth, given the sluggish economy and capital constraints.”

Importantly it also said that non- performing loans, those considered more than 90 days overdue, had increased to average 21% of the banks’ loan portfolio, up from 12% at the end of 2015.

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(News report from Issue No. 321, published on March 20 2017)