Tag Archives: business

Tesco to expand in Kazakhstan and the Caucasus

MAY 20 2013 (The Conway Bulletin) — Consumer markets in Central Asia and the South Caucasus region are maturing, as Tesco, the British supermarket chain, has realised.

Or at least, consumer markets in some of the region’s countries are maturing.

Tesco’s clothing department, which trades under the brand name F&F, announced that it planned to open various franchise stores across the Middle East, Central Asia and the South Caucasus.

Specifically it said that F&F would open a store in Astana, the Kazakh capital by the end of June, to be followed by stores in Azerbaijan, Georgia and Armenia.

These will be opened through franchise agreements with Saudi Arabia-based Al Hokair and Dubai-based Futtaim.

The deal and Tesco’s intention to expand across Central Asia and the South Caucasus is important as it acts as further evidence that consumer demand in these markets is changing.

Long associated with the luxury market, Western high street brands have moved into Kazakhstan, Azerbaijan, Georgia and Armenia, over the past couple of years and now, with the arrival of Tesco, it appears that discount brands are following.

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(News report from Issue No. 136, published on May 27 2013)

Azerbaijan’s SOFAZ buys into VTB

MAY 22 2013 (The Conway Bulletin) — Alongside the sovereign wealth funds of Qatar and Norway and the China Construction Bank, Azerbaijan’s State Oil Fund (SOFAZ) bought part of a $3.3b stake in Russian bank VTB, the bank told local media. The deal again shows just how much wealth Azerbaijan has at its disposal.

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(News report from Issue No. 136, published on May 27 2013)

Kazkommertsbank posts positive results

MAY 16 2013 (The Conway Bulletin) — Kazkommertsbank, Kazakhstan’s biggest bank, reported a 15% rise in net profit in Q1 2013 compared to Q1 2012. The increase was due to higher interest rate payments and a fall in bad debt. Kazkommertsbank’s results are important for the Kazakh banking sector which is still recovering from the 2009 global economic crisis.

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(News report from Issue No. 135, published on May 20 2013)

Kazakh legal cases unravel in London

MAY 8 2013 (The Conway Bulletin) — London is the global centre of dispute resolution.

Its courts, solicitors, barristers and the law itself are respected around the world attracting businesses and individuals who need to settle commercial disputes.

Now, a study of documents over the past five years has shown that Kazakhstan-focused legal disputes generated the second highest number of cases, the London-based Independent newspaper reported. Dispute resolution in London can be used as a rough gauge of a country’s economic activity.

According to the report, only the United States has been the focus of so many litigation issues.

Of the 705 litigation cases covered since 2008 by the Commercial Court, the business dispute arm of the High Court in London, 86 related to Kazakhstan. Russia, which has had more high-profile and expensive cases, recorded 75 cases.

The biggest Kazakhstan-oriented case to pass through the British courts in the past five years was the dispute involving Mukhtar Ablyazov who was accused of defrauding BTA Bank, where he had been chairman, of billions of dollars.

Ablyazov is currently on the run, having been charged with perjury last year. Earlier this year, the High court ordered Ablyazov to re-pay $2b.

According to the Independent’s report, the BTA/Ablyazov dispute case generated 11 individual cases, employing at least 50 solicitors.

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(News report from Issue No. 135, published on May 20 2013)

Azerbaijan to finance new refinery in Turkey

MAY 17 2013 (The Conway Bulletin) — SOCAR, Azerbaijan’s state-owned energy company, said it would borrow $4b to part-finance an ambitious new oil refinery in Turkey, only 10 days after figures showed slowing output at its most important oil field.

The refinery, to be built in western Turkey, will be operational by 2016 and produce 10m tonnes of oil a year. The $4b loan will cover around two-thirds of the construction costs.

SOCAR will fund the rest of the project itself.

Azerbaijan’s wealth is anchored to its energy industry and the refinery plan projects both a confidence about the future and an understanding of its most important market — Europe.

The importance of Europe as Azerbaijan’s main market was underlined when the European Commission approved plans to build a pipeline to pump gas from Azerbaijan across the Adriatic to Italy, on May 17.

A few days earlier, though, on May 7, BP announced that production at the main oil field in the Azeri sector of the Caspian Sea, Azeri-Chirag-Guneshli (ACG), was still falling. Bloomberg reported that production at ACG, which produces three-quarters of the country’s oil, had dropped to 662,000 barrels per day in Q1, a fall of 8.4% from a year earlier.

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(News report from Issue No. 135, published on May 20 2013)

Kazakh Trio takes over ENRC

MAY 19 2013 (The Conway Bulletin) — The Kazakh government and the three founders of ENRC, Alexander Machkevitch, Alijan Ibragimov and Pathokh Chodiev, have offered shareholders in the London-listed miner ENRC shares in rival Kazakhmys and cash, Reuters reported. The offer values ENRC, the subject of a fraud investigation, at $5b.

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(News report from Issue No. 135, published on May 20 2013)

Railway to link Turkmenistan and Kazakhstan

MAY 11 2013 (The Conway Bulletin) — Turkmen President Kurbanguly Berdymukhamedov and his Kazakh counterpart, Nursultan Nazarbayev, opened a rail link that bypasses the Soviet network in Uzbekistan. Uzbekistan is often regarded as an awkward neighbour because of its unilateral tendencies. The rail link is designed to link up with Iran.

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(News report from Issue No. 135, published on May 20 2013)

UniCredit sells ATF Bank in Kazakhstan

MAY 2 2013 (The Conway Bulletin) — The deal has been rolling around in and out of public view for most of the year but it now looks as if it’s finally been wrapped up.

KazNitrogenGaz, an investment group officially owned by Galimzhan Yesenov, has bought ATF Bank, one of Kazakhstan’s biggest banks, for $500m from UniCredit, an Italian bank, media reported.

This is a lower figure than previously touted around.

It’s also telling because it’s about a quarter of the price that UniCredit paid for it in 2007.

When UniCredit bought ATF Bank, Kazakhstan’s economy was on the up and banks were, relatively casually, handing out loans to Kazakh consumers and businesses. When the global economy slowed and faltered in 2008, these loans went bad and Kazakh banks, including ATF Bank, took a large hit.

According to reports, 40 percent of ATF Bank’s loan portfolio is still regarded as non-performing.

With the Kazakh economy rebounding in the past five years, the government is preparing to sell off majority stakes in four banks it was forced to rescue from bankruptcy in 2009.

The buyers of the state’s stakes in these banks are wealthy Kazakhs and buying back ATF Bank from UniCredit could be an extension of that plan. The 31-year-old Mr Yesenov is relatively obscure but behind him is his powerful father-in-law, Akhmetzhan Yesimov. That is where the real power and drive for buying ATF Bank may lie.

(News report from Issue No. 134, published on May 6 2013)

Kazakhstan might not buy Kashagan stake

APRIL 29 2013 (The Conway Bulletin) — Kazakhstan will not buy ConocoPhillips’ 8.4% stake in the Caspian Sea Kashagan oil project, local media quoted Kazmunaigas’ chairman, Lyazzat Kiinov, as saying. Although ConocoPhillips had agreed a deal with India’s national energy company, ONGC, to buy the stake for $5b, Kazakhstan has the right to buy the stake first.

(News report from Issue No. 134, published on May 6 2013)

Kazakhstan’s Kazmunaigas to invest $10b in next 10 years

MAY 3 2013 (The Conway Bulletin) — Kazmunaigas, the Kazakh state energy company, plans to invest $10b over the next 10 years in exploration to double its oil and gas reverses, chairman Lyazzat Kiinov said. The ambitious plans show how important the energy sector is to Kazakhstan’s economic development.

(News report from Issue No. 134, published on May 6 2013)