JUNE 24 2017 (The Bulletin) — The IMF released the fifth and final loan of $21.6m to Armenia, media reported, completing a promised $111.6m deal pledged in 2014. It said that Armenia’s economy was set to improve over the next few years after a tough period. It particular, the IMF praised Armenia’s spending prudence.
ENDS
Copyright ©Central Asia & South Caucasus Bulletin — all rights reserved
(News report from Issue No. 334, published on June 26 2017)
JUNE 21 2017 (The Bulletin) — ATR, a British oil field services company, said it had set up a new base new near Aktau after winning a series of projects. ATR, which merged with Centurion Group last year, said that the base would initially employ 12 people, although it aimed to double the size of it within 12 months. ATR rents out oil field services equipment. The Kazakh oil and gas sector is beginning to show signs of a recovery after a downturn since 2014 linked to a collapse in energy prices.
ENDS
Copyright ©Central Asia & South Caucasus Bulletin — all rights reserved
(News report from Issue No. 334, published on June 26 2017)
JUNE 20 2017 (The Bulletin) — Kazakhstan expects its grain harvest to drop to between 17m tonnes and 18m tonnes this year compared to 20.6m tonnes last year, media reported quoting agriculture minister Askar Myrzakhmetov. Grain has become an increasingly important commodity for Kazakhstan over the past decade. A crop of around 18m tonnes is roughly the mean amount that Kazakhstan expects to harvest. In 2009, it har- vested nearly 23m tonnes of grain.
ENDS
Copyright ©Central Asia & South Caucasus Bulletin — all rights reserved
(News report from Issue No. 334, published on June 26 2017)
ASTANA, JUNE 16 2017 (The Bulletin) — Through the Astana International Financial Centre (AIFC), Kazakhstan wants to create a regional centre of excellence that will lure companies to its windswept capital with a combination of tax breaks and guarantees on stability and the rule of law.
In an interview with The Bulletin, Baurzhan Bektemirov, managing director of the AIFC, said that setting up a legal system with English common law at its heart was key to one of Kazakh President Nursultan Nazarbayev’s pet projects.
“We have our own regulatory framework and authority. They are completely new. We are writing new bylaws and there will be more flexibility,” he said.
The plans are ambitious. AIFC and Nazarbayev University will take over the giant site currently being used by EXPO-2017 until mid-September. AIFC will have its own courts, legal and tax systems, all of which needed tweaks to the constitution to impose.
Part of the challenge of creating a financial centre in Kazakhstan, commentators have said, is persuading companies that it is now a reliable place to invest, that their rights will be protected and that corruption, an ailment that Kazakh companies and officials have found hard to shake off, is not going to derail their plans.
Under the plans, financial companies that move to the AIFC will be given tax breaks and should benefit from a stable, investor friendly, regime at the heart of Central Asia that can be used as a launchpad into Russia and East Asia.
“There will be no income tax for 50 years but this is not the main issue, it’s more about stability and how to do business,” Mr Bektemirov said.
At the centre of the AIFC are plans for a stock exchange and the development of a liquid capital market. It will be given a boost by the IPOs next year of state-owned Air Astana, Kazmunaigas and Kazatomprom which are committed to having their primary listings in Astana, although they are free to open a secondary listing on an international market.
“The idea is to conduct IPOs in Astana. This serves two things. It is cheaper and gives local investors better access. It’s weird that local investors have to go to London and pay all these fees to invest locally. Secondly it is about creating a local capital market,” Mr Bektemirov said.
Of course, Kazakhstan already has a stock exchange in Almaty – Kase. It was set up in the early 2000s but the market and investors weren’t ready.
Mr Bektemirov shrugged when asked about it. There are lesson to be learnt but this time it will be different.
“It wasn’t successful because of institutional problems. If you want to build new business, new companies, you need to build new institutions. You can’t rely on old institutions which have their owns problems, are rigid and are used to doing business in a certain way,” he said.
ENDS
Copyright ©Central Asia & South Caucasus Bulletin — all rights reserved
(News report from Issue No. 333, published on June 19 2017)
JUNE 19 2017 (The Bulletin) — It was a poor week for stocks in companies linked to Central Asia and the South Caucasus. All stocks were either stagnant or fell, with the notably exception of Georgia Healthcare, which is perhaps the standout performer of the year.
By the end of the week, Georgia Healthcare stock had risen by 12% to 394.5p, smashing past its previous all-time high of 373p hit in February.
As for the fallers, the heaviest tumbles were taken by KAZ Minerals and Centerra Gold. KAZ Minerals, the Kazakhstan focused copper producer, fell 11.4% to 471.5p. This, although it looks bad, was merely a correction to return to trading at a level it has been anchored around for the past month.
Centerra Gold’s shares are volatile. The Canada-based miner whose main asset is the Kumtor gold mine in eastern Kyrgyzstan is locked in a near permanent dogfight with the Kyrgyz government for control of its asset. This week, though, traders said that short-selling had knocked the value of its shares. It finished the week at C$6.72, a fall of over 8%, and its lowest level since the start of March.
Other notably fallers include Nostrum Oil & Gas, which lost around 4.7% of its stock price, more than the fall in oil, and TBC Bank, a Georgian bank, which also shed around 5% of its value, possibly because inflation data remained stubbornly high.
ENDS
Copyright ©Central Asia & South Caucasus Bulletin — all rights reserved
(News report from Issue No. 333, published on June 19 2017)
ASTANA, JUNE 15 2017 (The Bulletin) — Kazakhstan’s national airline, Air Astana, is likely to launch its international IPO on the London Stock Exchange, CEO Peter Foster said at the Astana Economic Forum.
Air Astana and other state-owned companies that the Kazakh government wants to privatise are legally bound to list on the new Astana Stock Exchange, which will open next year, but the destination of a secondary foreign listing has been the focus of debate. Stock exchanges in Shanghai, Dubai and Singapore have all been touted as possible venues for Air Astana, although London has always been favourite.
“The foreign exchange is likely to be London,” Mr Foster told an audience during an AEF session focused on privatisation.
“The window for an IPO will open in Q3 2018.”
Currently, the Kazakh sovereign wealth fund Samruk Kayna owns 51% of Air Astana and BAE Systems owns a 49% stake.
Mr Foster later told the Bulletin that BAE Systems wanted the foreign IPO in London. The aim of the IPO is to double the size of the fleet over the next decade to around 65 planes.
ENDS
Copyright ©Central Asia & South Caucasus Bulletin — all rights reserved
(News report from Issue No. 333, published on June 19 2017)
JUNE 15 2017 (The Bulletin) — Tengizchevroil (TCO), Kazakhstan’s biggest oil producer, has cut its dividend payment this year to part- fund an expansion project, the CEO of Kazakhstan’s state-owned oil and gas company Kazmuniagas, Sauat Mynbayev, said. Mr Mynbayev also said that TCO would also borrow $20b to fund the $37b expansion project. The TCO expansion is considered a vital step in extending Kazakhstan’s oil production. It will increase production to 39m tonnes per year from 27m tonnes per year by 2022.
ENDS
Copyright ©Central Asia & South Caucasus Bulletin — all rights reserved
(News report from Issue No. 333, published on June 19 2017)
JUNE 11 2017 (The Bulletin) — Uzbekistan has started construction of a $90m lead producing plant near Tashkent. The plant will have a production capacity of 30,000 tonnes of lead per year. Importantly it will provide jobs, something that Pres. Shavkat Mirziyoyev has said is a priority. The lead plant, though, was actually commissioned in May 2016, under the presidency of Islam Karimov.
ENDS
Copyright ©Central Asia & South Caucasus Bulletin — all rights reserved
(News report from Issue No. 333, published on June 19 2017)
JUNE 14 2017 (The Bulletin) — The Wall Street Journal quoted US holders of International Bank of Azerbaijan (IBA) debt as saying that the proposed restructuring deal was unfair and designed to benefit the bank’s Azerbaijani owners. IBA has asked debt holders to write off 20% of their investments in a deal to restructure $3.3b worth of debt. Part of the restructuring process would also mean that the debt is reissued as sovereign bonds.
ENDS
Copyright ©Central Asia & South Caucasus Bulletin — all rights reserved
(News report from Issue No. 333, published on June 19 2017)
JUNE 15 2017 (The Bulletin) — The EBRD is set to finance the construction of a second solar power park in southern Kazakhstan, media reported. The EBRD will give a loan of $45m for the solar power park, the Clean Technology Fund will give $10m and the owners of the field, not named by media, will stump up another $80m. After the construction of Burnoye Solar 2, it will constitute one of the biggest solar power fields in Europe or Central Asia.
ENDS
Copyright ©Central Asia & South Caucasus Bulletin — all rights reserved
(News report from Issue No. 333, published on June 19 2017)