SEPT. 9 2015 (The Conway Bulletin) — Car-maker GM Uzbekistan’s sales to Russia in Jan.-Aug. fell by 53% compared to the same period last year, it said. GM Uzbekistan is a joint venture between General Motors and the Uzbek government. It sold 13,752 cars to Russia in Jan.-Aug.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 11 2015 (The Conway Bulletin) — The biggest movers on the stock markets were copper producer KAZ Minerals which finished the week up 8%, Roxi Petroleum settled down 12% and Centerra Gold fell by 6.6%.
KAZ Minerals’ share price has fluctuated wildly, hit by China’s economic health and commodity prices. It is now trading at 162 pence, up from around 150 pence at the start of the week. It is sensitive to the value of the tenge which weakened by 10% this week and gave KAZ Minerals a lift.
Roxi Petroleum’s main oil assets are in Kazakhstan.
Its shares fell after it said it was having to downgrade the value of its assets by 28% in line with the fall in the tenge last month.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 7 2015 (The Conway Bulletin) — Obi Zulol, a Tajik soft drink producer, opened a new, 3.7m somoni ($600,000) factory in Dushanbe. The company holds the licence to produce and sell brands from Canadian distributor Cott Corporation, such as RC Cola. This is Obi Zulol’s second soft drinks plant in Dushanbe.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 9 2015 (The Conway Bulletin) – If oil prices continue to fall, Kazakhstan may cut production back to 73m tonnes a year, media quoted deputy energy minister Uzakbai Karabalin as saying. Kazakhstan is projected to produce around 80m tonnes of oil this year. Oil is the main driver of the Kazakh economy.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 10 2015 (The Conway Bulletin) – Georgian president Giorgi Margvelashvili signed into law a bill that switches supervision of commercial banks from the Central Bank to a state-linked body called the Financial Supervisory Body. Mr Margvelashvili tried to veto the switch but was blocked by parliament. Inter- governmental banks have criticised the switch and called it political.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 9 2015 (The Conway Bulletin) — The Fitch ratings agency warned investors of the precarious state of Azerbaijan’s banking sector.
Authorities in Azerbaijan have put a brave face on the country’s shaky economic conditions but the Fitch report cut through the bluster.
“We believe capital positions at some banks are likely to come under significant pressure over the medium term from increasing credit losses,” Fitch said. “Capital cushions are only moderate in most cases, and internal capital generation is limited.”
Azerbaijan depends on oil and gas for over 90% of its exports, meaning that it haPs been particularly exposed to the collapse in oil and gas prices. GDP growth is slated at the relatively low 1.5%.
In February, the Central Bank devalued the manat currency by a third denting its credibility. Despite the devaluation, fresh data has shown that the Central Bank has still spent billions defending its new value.
Non-performing loans are likely to grow from their current level of 10%, a consequence that Fitch sees inevitable, especially given the growing amount of loans and deposits denominated in foreign currency.
“We expect zero loan growth for the banking sector in 2015,” Fitch said. “Asset quality, already somewhat strained, with impaired loans averaging 10% at end-1H15 at Fitch-rated banks, is likely to deteriorate further.”
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(News report from Issue No. 247, published on Sept. 11 2015)
ALMATY, SEPT. 4 2015 (The Conway Bulletin) — Japanese car-maker Honda has decided to quit the Kazakh and the Russian markets until economic conditions improve, media reported.
Honda’s final shipment of cars to Kazakhstan was at the start of 2015 and to Russia in Dec. 2014.
The fall in value of currencies and the collapse in the car market had forced Honda to leave.
Weak local currencies have pushed up prices of imported cars.
A Honda spokesperson denied that the company was quitting the former Soviet Union altogether.
“We think the market has potential in the future so we’re not pulling out,” she told the FT. “We can respond flexibly since we don’t have a plant in Russia.”
Honda car sales in Kazakhstan fell by around 50% in 2015. In Russia, they shrank by 78%.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 4 2015 (The Conway Bulletin) — London-listed Roxi Petroleum said it had downgraded the value of its assets in Kazakhstan by 28% after last month’s devaluation of the tenge. Roxi’s main activities are focused in the Mangistau region, west Kazakhstan. Since the announcement, Roxi’s share price has fallen by 12%.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 4 2015 (The Conway Bulletin) — In a boost for Georgia’s tourist sector, privately-owned Turkish airline Borajet opened a new air route from Istanbul to the Georgian Black Sea resort town of Batumi. Borajet will fly to Batumi three times a week from Istanbul’s second airport. Turkish Airways already flies from Istanbul’s main airport to Batumi.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 4 2015, ALMATY (The Conway Bulletin) — The Kazakh government scrapped petrol price controls, another major admission that the market rather than the state is better placed to direct its economy.
Government officials blamed the volatility in foreign exchange markets for scrapping price controls on petrol which immediately jumped in price by around 40%.
Pressured by low oil prices, rising inflation and the depressed value of the Russian rouble, the Kazakh Central Bank released the tenge from its US dollar peg last month. It fell 23% in one day and is now trading at an all-time low of around 262/$1 which made petrol excessively cheap.
Deputy PM Bakhytzhan Sagintayev was handed the task of explaining the new policy to journalists.
“Having studied all possible options and discussed the issue with market players, we decided there should be a flexible pricing model given the ongoing volatility at the FX market,” he said. “The Government has decided to stop regulating prices for AI-92 and AI-93 petrol.”
In Almaty, Kazakhstan largest city, the effect was immediate. Queues snaked out of petrol stations as drivers rushed to fill their tanks.
Guldariya Iskakova, an accountant, summed up the feeling of people in Almaty about the petrol price rises. “It is awful. We are now seriously thinking to use public bus,” she said. “Our expenses have increased several times. The prices for petrol increased by 20 tenge in just one day.”
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 247, published on Sept. 11 2015)