DEC. 2 2015 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD) said that its priorities in Armenia over the next four years would be to improve small business competitiveness, develop local capital markets and improve public utilities. The EBRD is a major investor in Armenia with over $1b worth of investments.
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(News report from Issue No. 259, published on Dec. 4 2015)
NOV. 20 2015 (The Conway Bulletin) — Russian lender VTB Bank said it had injected $40m into its Kazakh subsidiary to increase its total capitalisation by 44% to around 24b tenge ($78m). The move is more evidence of a worsening economic outlook. In the first three-quarters of the year, VTB Bank recorded losses of 791m tenge ($2.6m), compared to a 850m tenge profit in the same period last year ($4.6m at the time).
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(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 17 2015 (The Conway Bulletin) — Halyk Bank, one of Kazakhstan’s largest retail banks, reported increased net income in the third quarter of 2015 of 36b tenge, roughly a third larger than the third quarter of 2014. In US dollar terms, taking into account the devaluation of the tenge, Q3 2015 and Q3 2014 are roughly the same. Operating expenses grew by 12.7% in the first 9 months of 2015 compared to the same period in 2014 because of wage inflation linked to the devaluation of the tenge.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 10 2015 (The Conway Bulletin) — The Kazakh Central Bank approved a request to modify the shareholder composition of Kaspi Bank. President Nursultan Nazarbayev’s nephew Kairat Satybaldy and Mikhail Lomtadze, chairman of Kaspi Bank, transferred their shares and joined the holding company JSC Kaspi, headed by Kaspi Bank director Vyacheslav Kim. Kaspi Bank is the 6th largest bank in Kazakhstan by assets.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 5 2015 (The Conway Bulletin) — Stock markets saw commodities-focused companies lose terrain this week, despite a brief surge in oil prices above $50/barrel on Tuesday.
Kazakhstan-focused oil company Roxi Petroleum lost 16% in one week closing at 7.88p, perhaps driven down by technical issues slowing down its drilling operations at the BNG contract area in the western part of the country.
After peaking at 122.4p on Tuesday, mining company KAZ Minerals shares were down 8.5% to 105.7p on Friday. KAZ Minerals used to be called Kazakhmys.
In Toronto, Centerra Gold shares lost 3.5% to 7.15 Canadian dollars, continuing a 3-week slump following debates on the formation of a new government in Kyrgyzstan. The Kumtor gold mine in Kyrgyzstan is Centerra’s main asset and the company is a major taxpayer in the country. Centerra has said, though, that production at Centerra would be down this year on earlier forecasts.
A new government has now been formed in Kyrgyzstan, hopefully giving Centerra a stable partner to work with.
Shares in Bank of Georgia were down 4.5% to £19.11 on Friday.
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(News report from Issue No. 255, published on Nov. 6 2015)
OCT. 30 2015 (The Conway Bulletin) — Net profits at Kazakhstan’s Eurasia Bank fell to 2.6b tenge ($9.1b) in the first nine months of the year, a fall of 67% from the same period in 2014. The bank, owned by businessmen Alexander Mashkevich, Alijan Ibragimov and Patokh Chodiev, declined to disclose further details of the results. In 2014, net profit fell by 13% compared to 2013.
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(News report from Issue No. 255, published on Nov. 6 2015)
NOV. 2 2015 (The Conway Bulletin) – Daniyar Akishev’s promotion to head the Kazakh Central Bank may have taken observers by surprise but to those who know the 39-year-old, it is a job he has been groomed for.
Mr Akishev is a veteran of the Central Bank, where he worked in various positions from 1996 to 2014 before moving to the Akorda as economic adviser to President Nursultan Nazarbayev.
In 2007 Mr Akishev was rumoured to be in pole-position for taking on the role of new chief of the financial regulator.
Instead has was named deputy head of the Central Bank, a position he held for seven years, under three different bosses.
In particular, Central Bank insiders said he achieved professional maturity under Grigori Marchenko, a respected liberal economist, who often clashed with Mr Nazarbayev on economic policies.
There have been wobbles, though, in Mr Akishev’s rise to the top. In December 2008, ominously, he said the economic situation was ideal for Kazakhstan.
“The Central Bank has no problems with the exchange rate of the tenge, quite the contrary,” he told RIA Novosti in an interview.
Two months later, the Bank devalued the tenge by 19%.
Media quoted some local analysts as saying that Mr Akishev lacks independence because of his young age and his lack of political authority. But Mr Akishev is the same age as Mr Marchenko was when he was named head of the Central Bank for the first time in 1999 and is five years older than Oraz Dzhandosov was, when he became Central Bank chief in 1996.
Mr Akishev’s predecessor, Kairat Kelimbetov, who held the job for two years during which the tenge lost half its value, had a different profile and no background at the Central Bank.
Mr Akishev might have accepted possibly the toughest job in Kazakhstan, but he is also one of the few people in the country with the experience and background to take it on.
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(News report from Issue No. 255, published on Nov. 6 2015)
OCT. 30 2015 (The Conway Bulletin) — The US Federal Reserve Bank’s hinted that interest rates could be increased in December, hitting stock markets worldwide. South Caucasus- and Central Asia-related shares were no exception.
Miners were hit badly. Kyrgyzstan- focused Centerra Gold saw its shares lose over 9% in Toronto this week, closing at 7.36 Canadian dollars on Friday.
KAZ Minerals shares were also down 9%, closing at 116p on Friday.
After announcing it would pay a dividend to its shareholders on Oct. 30, Central Asia Metals reversed a slow start and closed on Friday, with a marginal positive growth, at 163p/share in London.
Oil and gas producers also suffered, despite oil prices gaining 2% this week with Brent crude closing at $49.5/barrel. Kazakhstan-focused Tethys Petroleum and Nostrum Oil & Gas both lost around 10% this week.
After reaching an 8-month high at £21.35/share last Friday, London-listed Bank of Georgia fell by 6.5% to £20.00. Last week its shares rallied after a healthcare group it holds a large stake in announced an IPO price range that valued the company at around $500m.
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(News report from Issue No. 254, published on Oct. 30 2015)
OCT. 23 2015 (The Conway Bulletin) — Oil companies suffered from a fall in oil prices this week. The Brent index closed at $48/barrel on Friday, down 5% this week.
Nostrum Oil & Gas lost around 9% this week, recovering on Friday to end at 475p per share in London. Nostrum’s summer objective Tethys Petroleum continued its slump, reaching the lowest level in 2015 on Oct. 22, trading at 0.06 Canadian dollars per share in Toronto on Thursday, rebounding slightly to 0.07 Canadian dollars on Friday. Kazakhstan-focused Roxi Petroleum gained 2%, after it issued new shares earlier in October. Roxi closed at 9.63p on Friday.
Last week, the price of copper fell by 2% before recovering to $2.40 per lb. Britain-based miner KAZ Minerals was hit by the market crunch this week and recorded a 7% loss, closing at 127p in London on Friday.
The upside was represented by Centerra Gold, whose shares gained almost 9% despite slower gold production in Kyrgyzstan. The final price in Toronto was 8.28 Canadian dollars.
In the banking sector, Bank of Georgia rose by almost 7% this week to 214p. The stability of the lari currency kept the market optimistic.
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 20 2015 (The Conway Bulletin) — Eurasian Bank, a private lender in Kazakhstan linked to members of the elite, said it had bought a 100% stake in BankPozitiv, a Kazakh subsidiary of a Turkish bank. Michael Eggleton, Eurasia Bank’s CEO said the deal will not exceed $32m. In anticipation of tighter capital requirements and in an effort to cut costs, foreign banks have been selling their assets in Kazakhstan.
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(News report from Issue No. 253, published on Oct. 23 2015)