NOV. 14 2013 (The Conway Bulletin) — Uzbekistan Airways will charge foreign airlines for airport services at Tashkent in euros from Dec. 1, local media quoted Russian news agency RIA Novosti as saying. Analysts said the move undermines confidence in Uzbekistan’s national currency which is heavily controlled by the authorities.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 20 2013 (The Conway Bulletin) — The Uzbek government fired the head of its gas pipeline monopoly Uztransgaz, Tulyagan Jurayev, less than a month after the head of Uzbekneftegas, the state energy company, was also sacked. It’s unclear why Mr Jurayev was sacked. Analysts said it may be part of a power struggle in Uzbekistan.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 15 2013 (The Conway Bulletin) — Concluding its mission to Azerbaijan, the IMF said that the country’s economy was moving in the right direction although it needed to restructure its biggest bank, the state-owned International Bank of Azerbaijan.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 14 2013 (The Conway Bulletin) — Uzbek financial police closed clothes shops in Tashkent selling Western brands. The raids on Mango, the United Colours of Benetton and others underline the difficulty of business in Uzbekistan. Media reports said the shops were linked to Gulnara Karimova, daughter of President Islam Karimov.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 18 2013 (The Conway Bulletin) — Azerbaijan is considering buying a pair of T-129 attack helicopters manufactured by its close ally Turkey, media reported. T-129 helicopters bristle with weapons. Azerbaijan is spending heavily on its military, concerning neighbours, especially Armenia with which it is still officially at war over the disputed region of Nagorno-Karabakh.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 15 2013 (The Conway Bulletin) — Uzbekistan said it will spend $35m upgrading fuelling facilities at the Navoi airport in the centre of the country. This is important because Uzbekistan wants to turn the airport into the main cargo hub for Central Asia and the general Asia-Europe route.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 15 2013 (The Conway Bulletin) — Azerbaijan has made decent economic progress but more needs to be done to continue to encourage business to develop, the IMF said in a statement after it concluded an assessment of the country’s economy.
The IMF said in general it supported the Azerbaijani Central Bank’s plan to force banks to strengthen their capitalisation levels. It was concerned, though, about the health of the state-owned International Bank of Azerbaijan (IBA).
“The mission calls for combining this capitalisation with the restructuring of this bank (the IBA) in line with internationally accepted practices,” the IMF said in a statement.
The IBA is so large and important to Azerbaijan’s banking sector, the IMF explained, that it needs to be reformed. Earlier this year, the IBA said it would increase its capitalisation levels to 500 million Manat (about $640 million).
In December 2012, the Fitch ratings agency downgraded the IBA’s credit rating because it said its capitalisation levels were too low.
Overall, the IMF said the Azerbaijani authorities were on the right track with reducing non-oil deficit levels.
“Azerbaijan’s near-term economic prospects are generally favourable, with overall gross domestic product growth projected at 5% in 2013 and 2014, following the successful stabilization of oil output,” the IMF concluded.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 20 2013 (The Conway Bulletin) — In an important, but little noticed, report Azerbaijan’s Central Bank said that plans to ensure that its banking sector holds enough capital to protect it from a sudden economic downfall are on track.
It said that of the 43 banks operating in Azerbaijan, those holding 95% of all deposits will hit the target of ensuring they hold a minimum capital of 50 million manat, roughly $64 million, by the end of the year.
Elman Rustamov, the chairman of the Azerbaijani Central Bank, said the smaller banks would be given until the end of 2014 to hit the required levels of capital.
“However, this does not mean that banks can relax. They need to work and grow,” Mr Rustamov said according to local media.
“Other countries also took such precedents to protect themselves.”
The Azerbaijani Central Bank ordered commercial banks to improve the amount of capital they hold as a reaction to the relative boom in consumer borrow that has taken off.
This year consumer credit has risen fast in Azerbaijan, worrying some analysts.
International financial institutions, including the IMF, have supported the new rules over bank capitalisation in Azerbaijan.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 15 2013 (The Conway Bulletin) — The state-run International Bank of Azerbaijan (IBA) plans to issue a $500 million Eurobond in 2014, its first debt issue since 2007, media reported. In 2007, the IBA $600m with a debt issue. It cancelled subsequent issues because of the poor state of the market during the global financial crisis.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 20 2013 (The Conway Bulletin) — When the Kazakh government orders something to be done, it generally gets done so when Halyk Bank declined an invitation to effectively buy out the state’s shares in BTA Bank, it was clear that something was up.
The Kazakh government wants to unite the country’s pension funds. It offered its 97% stake in BTA Bank in return for Halyk Bank’s private pension fund. Kazakh President Nursultan Nazarbayev’s second daughter Dinara and her husband, Timur Kulibayev, own Halyk Bank, the second biggest in Kazakhstan.
Mr Kulibayev used to be the darling of Kazakh politics and business and was talked about as a successor to Mr Nazarbayev. His star has waned, though, since a riot in western Kazakhstan killed 15 people in 2011.
At the time he was in charge of Samruk-Kazyna, Kazakhstan’s sovereign wealth fund. He was blamed for the riot and his rivals have been trying to undermine him since.
Reports from Kazakhstan have said that he has recently rowed with senior government officials and argued with his father-in-law.
Rejecting an order for his bank, Halyk Bank, to buy out the government’s shares in BTA Bank may be a public expression of this discontent.
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(News report from Issue No. 161, published on Nov. 20 2013)