Tag Archives: business

Uzbekistan plans bank sale

APRIL 15 2016 (The Conway Bulletin) – The Uzbek government said it is ready to sell off its stakes in two commercial banks, part of a privatisation programme adopted in February. The government said it estimates its 47.6% stake in Aloka Bank to be worth $42.7m and its 63.1% stake in Turon Bank to be worth $29.7m. The government needs to raise cash and also wants to portray Uzbekistan as an investment-friendly economy.

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(News report from Issue No. 277, published on April 22 2016)

Google and Kazakhstan to establish mining data

APRIL 20 2016 (The Conway Bulletin) – Google and McKinsey formed a joint venture with Kazakhstan’s government to establish a data centre for the mining sector. Asset Issekeshev, minister of investment and new technologies, said that the project was aimed at improving data transparency and project efficiency. Mr Issekeshev told the FT that Polymetal and Eurasian Resources Group have already signed up to the project.

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(News report from Issue No. 277, published on April 22 2016)

Uzbek authorities comment on high speed train

APRIL 15 2016 (The Conway Bulletin) – The Uzbek government said its high-speed train link from Tashkent to Bukhara, one of its headline projects, will be completed in August. The government has said that the rail link will cost around $400m to complete. It has partnered with European businesses such as Spain’s Talgo and France’s Alstom to build it. Once completed, the railway line will halve the travel time from Tashkent to Bukhara to around 3-1/2 hours.

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(News report from Issue No. 277, published on April 22 2016)

Kazakh businessman closes in on total control of Kazkommertsbank

ALMATY, APRIL 20 2016, (The Conway Bulletin) — The finish line is now in sight for Kenes Rakishev, a Kazakh businessman linked closely to the country’s elite, who has seemingly made taking over Kazkommertsbank one of his priorities.

In this process, control of Kazakhstan’s largest bank has been ripped from Nurzhan Subkhanberdin, a former opponent of Kazakh President Nursultan Nazarbayev.

A KazKom statement said that Mr Rakishev, 36, will buy out Subkhanberdin’s remaining shares in the bank by the summer. Mr Rakishev is also poised to become the next chairman in May.

“[Mr Rakishev] is expected to chair the board of directors and Marc Holtzman, chairman, shall take the CEO position in May 2016 after the extraordinary general meeting of shareholders,” KazKom said earlier this month.

As of this week, Mr Rakishev owns a 71.23% stake in Kazkommertsbank. When he buys out the rest of Mr Subkhanberdin’s shares, his stake will rise to 86%. Samruk-Kazyna, the Kazakh sovereign wealth fund owns a 10.7% stake in KazKom and the rest is owned by unnamed minority shareholders.

This takeover started in February 2014 when, essentially, the Kazakh government started to offload the debt-ridden BTA Bank onto KazKom and also to use it as a Trojan Horse to dislodge the London-based Mr Subkhanberdin.

Analysts have said the government, with Mr Rakishev as the nominated project leader, forced KazKom to buy BTA Bank from Samruk-Kazyna.

This weakened Mr Subkhanberdin’s control of the bank and started a process that has propelled Mr Rakishev to both being the owner and chairman of KazKom.

The eventual merger of KazKom and BTA Bank last year and the promotion of Mr Rakishev are the biggest changes to Kazakhstan’s banking sector since the Global Financial Crisis of 2008/9, but both the government and Mr Rakishev have been assiduous in avoiding commenting in public about it.

Even so, Mr Rakishev has developed an increasingly high public profile in Kazakhstan.

The son-in-law of the current Kazakh minister of defence, Mr Rakishev shot to prominence in 2008 as the go-between for Timur Kulibayev, President Nazarbayev’s son-in-law, and the British Royal Family when he bought an estate in England from Prince Andrew.

Since then, he has had a hand in some of Kazakhstan’s biggest business deals.

He also, officially, owns a 75% share in industrial holding Sat&Co. and a 20% stake in Central Asia Metals, a copper producer listed in London.

To this list he can now add KazKom.

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(News report from Issue No. 277, published on April 22 2016)

Stock market: BGEO Group

APRIL 22 2016 (The Conway Bulletin) – Shares in BGEO Group, the London-listed holding company that owns Bank of Georgia, gained 6% this week, rallying on the company’s positive annual results.

It posted a 38.4% growth in revenue and its retail banking customer base grew by 37.8% in 2015.

Neil Janin, BGEO’s chairman, also gave a strong outlook.

“The current economic and political situation in Georgia is solid and its outlook promising,” Mr Janin said in a statement, praising the recent tax code amendments.

Georgia holds parliamentary elections in October which may impact BGEO. The company was cagey about this and said that it hoped the country would “continue in the right direction”. In Georgian politics, though, anything can happen, as we’ve learned through the years.

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(News report from Issue No. 277, published on April 22 2016)

Industrial production falls in Kyrgyzstan

APRIL 15 2016 (The Conway Bulletin) – Kyrgyzstan’s industrial production fell by 25.7% to 39.5b som, mainly due to a slump in the mining sector, the Statistics Committee said in a report. The figures reflect the 4.9% GDP decline the Committee posted last week. Without accounting for Kumtor, Kyrgyzstan’s largest gold project, industrial output would have declined by 1%.

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(News report from Issue No. 277, published on April 22 2016)

CNPC says Kazakh Kashagan restart delayed until 2017

ALMATY, APRIL 21 2016, (The Conway Bulletin) — CNPC, China’s state owned energy company, said the Kashagan oil project will re-start production in June 2017, six months later than the Kazakh government has said it expects a restart.

At a press conference in Moscow, Wang Zhongcai, a vice-president at CNPC, said a launch, by the middle of 2017, was “likely,” Reuters news agency reported.

Just last week, Sauat Mynbayev, head of Kazakhstan’s state-owned Kazmunaigas, said the government forecast production by October and earlier this year, Exxon, which holds a 16.81% stake in the project, had also said it saw commercial production resuming by the end of 2016.

In September 2013, weeks after starting production, the consortium running Kashagan, one of the largest and most complex oil development projects in recent times, was forced to halt operations due to damaged pipelines.

In mid 2013, CNPC bought an 8.33% stake in Kashagan from Kazmunaigas. The share previously belonged to ConocoPhillips.

The other Kashagan shareholders also include Kazmunaigas, Total, Eni, Shell and Japan’s Inpex.

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(News report from Issue No. 277, published on April 22 2016)

Kazakhstan’s wealthiest men owns Nurbank

APRIL 15 2016 (The Conway Bulletin) – Rashit Sarsenov, one of Kaza- khstan’s wealthiest men, said that he was the real owner of JP Finance Group, an Almaty-registered company that officially owns 82.8% of Nurbank. Measured by assets, Nurbank is the 15th biggest bank in Kazakhstan. Mr Sarsenov’s sister was previously listed as JP Finance Group’s owner. In November 2015, Mr Sarsenov’s son, Eldar, became the chairman of the bank.

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(News report from Issue No. 277, published on April 22 2016)

Kazakh Kcell reports lowest Q revenue since IPO in 2012

ALMATY, APRIL 20 2016, (The Conway Bulletin) — Kazakhstan’s telecoms sector continues to limp through an economic downturn that has knocked consumer confidence and dented sales.

Kcell, the largest mobile operator, said in quarterly results that its year- on-year revenues fell by 17.7% in Q1 2016 to 35.5b tenge ($107m), its lowest since an IPO in 2012.

Prices have fallen in the ultra competitive Kazakh telecoms sector with Sweden’s Tele2 and Altel undercutting the tariffs of the two dominant companies — Kcell, majority owned by Telia Company, and Russia’s Vimpelcom which trades under the Beeline brand. Telia Company is the rebranded name for TeliaSonera.

Tele2 and Altel completed their long touted merger in February.

A combination of low oil prices and a recession in Russia has triggered an economic downturn in Kazakhstan and Central Asia. Consumer spending is down and companies are laying off workers.

Kcell CEO Arti Ots highlighted the impact of the poor economic conditions in a statement alongside the quarterly results.

“As expected the first quarter of the current year has been challenging,” he said.

“We are not seeing any significant signs of a market recovery, but there have been some indications that the intense downward pressure on pricing we have experienced in recent years is starting to ease.”

In Q1, Kcell said it lost 9% of its subscribers. More importantly, perhaps, Kcell said that the average revenue per user fell by 7% despite a strong uptake in data traffic.

In her own quarterly results, Tele2 CEO Allison Kirkby confirmed that the company had grabbed market share and that revenues had grown but also that Kazakhstan’s turbulent economy had dented profits.

“EBITDA [a profit measure] is impacted by both business expansion and the significant devaluation of the Kazakh tenge,” she said (April 21).

The tenge lost 50% of its value against the US dollar last year.

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(News report from Issue No. 277, published on April 22 2016)

Turkmenistan increases gas to China

APRIL 19 2016 (The Conway Bulletin) – Turkmenistan increased gas shipments to China by a third in Q1 2016, Chinese state media reported. According to Xinhua news agency, Turkmenistan exported 10.6b cubic metres of gas between Jan and March 2016 via the Central Asia-China pipeline, which runs through Uzbekistan and Kazakhstan. The total annual capacity of the pipeline is 55b cubic metres.

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(News report from Issue No. 277, published on April 22 2016)