Tag Archives: business

Azerbaijan’s SOCAR eyes more deals

JUNE 5 2017 (The Bulletin) — Azerbaijan is eyeing up investing another $3b into an energy project in Turkey, SOCAR Turkey CEO Zaur Gahramanov said. Azerbaijan is already a major investor in Turkey, with an estimated $11b worth of projects. The main projects are the Star oil refinery near Izmir and the Petkim wind farm. This year SOCAR failed in its bid to buy a network of petrol station in Turkey from Austria’s OMV. Mr Gahramanov said SOCAR was considering building a network of petrol stations from scratch or potentially another wind farm.

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(News report from Issue No. 332, published on June 12 2017)

Stock Market: Central Asia Metals

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JUNE 12 2017 (The Bulletin) — Shares in Central Asia Metals (CAM), the Kazakhstan focused miner, stayed steady this week on the London Stock Exchange despite some early calls by stock analysts to buy into it.

At the end of the week it was trading at 220p, roughly the level it has been anchored to since the start of May.

Still, some analysts said that now was a good time to buy into CAM. Peel Hunt has a target price of 290p against CAM, up from 270p. Canaccord Genuity also gives the stock a buy rating.

Across the Caspian Sea, Bank of Georgia, has also been given a lift by analysts. Investec raised its target price for Bank of Georgia to 4,000p from 3,950p. Several other brokerages moved their guidance to a ‘buy’ rating too.

Last month it issued the first ever corporate debt in Georgian lari, attracting widespread publicity. The IFC, part of the World Bank, said that it would step into support the lari issues, agreeing to buy up to a third of the $250m bond sale. Reports said that 20 other institutional investors had applied to buy a total of $207m of the bond, meaning the the IFC ended up with a smaller stake than it had offered.

Kaha Kiknavelidze, Bank of Georgia CEO, said: “IFC’s bid gave us great support in building investor confidence and creating early momentum in book build.”

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(News report from Issue No. 332, published on June 12 2017)

Azerbaijan’s plant to double Methanol

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JUNE 11 2017 (The Bulletin) — Azerbaijan’s methanol plant aims to double sales from 2019, the CEO of SOCAR Methanol, Elnur Mustafayev, said in an interview with ‘Consulting and Business’ magazine. Methanol’s main use is in the refining process of natural gas. The plant was built by AzMeCo and started production in June 2014. Mr Mustafayev said that it was the only methanol plant in the region and that it aimed to increase production to 500,000 tonnes per year, still some way short of its 750,000 tonne limit.

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(News report from Issue No. 332, published on June 12 2017)

China buys first bank in Kazakhstan with swoop for Altyn

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ALMATY, JUNE 8 2017 (The Bulletin) — Chinese Citic Bank Corp completed the purchase of a 60% stake in Altyn Bank from Halyk Bank for an undisclosed amount, marking China’s first investment in the Kazakh banking sector.

The deal also lays down yet another marker of intent by China over its push to develop Central Asia, and in particular Kazakhstan, as the fulcrum of its ‘One Belt. One Road’ development policy. It envisions a new Silk Road, connecting China and Europe, which means developing infrastructure in Kazakhstan.

This is also China’s first bank deal in Kazakhstan and comes in the midst of a lack of confidence in the Kazakh banking sector, linked to a three year-long economic downturn. China’s CITIC bank has not commented but Umut Shayakhmetova, the Altyn Bank CEO, did.

“Within the ‘One Belt. One Road’ Chinese initiative we are seeing Kazakh companies expressing a clear desire to develop their business in China as we continue to follow the needs of our clients,” she said.

The deal was announced last year.

Altyn Bank is described as a medium-sized lender with assets of $930m. Halyk Bank said it would retain a 40% stake in the bank. Altyn Bank was formed in 2014 when Halyk bought HSBC Kazakhstan.

China’s ‘One Belt. One Road’ policy has lead to a rush of Chinese deals in Kazakhstan. COSCO Shipping Corporation and Jiangsu Lianyungang Port Co bought a 49% stake in the Khorgos dry port on the Kazakh-Chinese border last month and this month the Shanghai Stock Exchange said it would buy a 25.1% stake in the Astana Stock Exchange.

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(News report from Issue No. 332, published on June 12 2017)

Car imports to Kazakhstan drop

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MAY 29 2017 (The Bulletin) — Car imports from Russia into Kazakhstan dropped by 11% in the first quarter of the year to 4,700 cars, media reported. Reports said the drop in Russian car imports was mainly due to a sharp rise in prices linked to a drop in the value of the Kazakh tenge. In the first quarter of 2014, Kazakhstan imported 32,400 cars from Russia.

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(News report from Issue No. 331, published on June 5 2017)

Kazakh Banks make deal

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JUNE 2 2017 (The Bulletin) — Halyk Bank will buy Kazkommertsbank’s two largest shareholder’s combined stake of 54% for a nominal fee of $1, Reuters reported. The nominal fee highlights the state-sponsored natured of the merger, agreed in March, between the country’s two largest banks. Under the deal, a government unit set up to buy banks’ bad debt will buy 2.4 trillion tenge ($7.5b) of bad debt from the new bank. Kazkommertsbank’s two biggest shareholder are Kenes Rakishev, a financier close to the elite, and Samruk Kazyna, the sovereign wealth fund.

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(News report from Issue No. 331, published on June 5 2017)

Polymetal raises stake in Kazakh mine

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ALMATY, JUNE 1 2017 (The Bulletin) — Russian gold miner Polymetal increased its stake in the Kazakh mine Dolinnoye to 50% by buying a 25% stake for $1.6m.

Polymetal bought its original 25% stake in the gold mine, based in northern Kazakhstan, in 2015. Polymetal is one of Kazakhstan’s biggest mining companies.

“This transaction further expands and strengthens our Varvara hub concept,” said Vitaly Nesis, Group

CEO of Polymetal. “We expect first ore to go through the mill in Q3 2017.”

The so-called Varvara hub is the collective term that Polymetal uses to describe its group of gold mines in Kazakhstan centered around the processing plant of the same name.

Polymetal’s assets in Kazakhstan include, the Kyzyl project in north- eastern Kazakhstan. In 2015, it bought the Kyzyl project for $620m from Sumeru, a private group owned by Timur Kulibayev, son-in-law of Kazakh President Nursultan Nazarbayev.

In the first quarter of the year, Polymetal said that its gold production had increased by 8% compared to the same period in 2016, helped partially by a rise output at the the Varvara hub.

It also said, though, that its Kazakh operations had required more capital investment than expected.

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(News report from Issue No. 331, published on June 5 2017)

Fibre optic production starts in Uzbekistan

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MAY 30 2017 (The Bulletin) — Uzbekistan plans to start producing fibre optic cables, mainly for domestic use, media reported. Telecompaper.com said that production was planned at 50,000km of cables every year and that Uzbekistan would lay 277,000km of cables by 2021, part of a scheme to expand its the Uzbek broadband network. Pres. Shavkat Mirziyoyev has said he wants to create jobs through infrastructure schemes.

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(News report from Issue No. 331, published on June 5 2017)

Kyrgyzstan plan to rise power prices

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MAY 29 2017 (The Bulletin) — Kyrgyzstan is planning to raise the cost of electricity by 10% between 2018 and 2020, Duyshenbek Zilaliyev, chairman of Kyrgyzstan’s State Committee for Industry, Energy, and Mining, said. Electricity tariffs are a sensitive topic in Central Asia and the South Caucasus. When governments have tried to increase them from their heavily subsidised Soviet levels they have stirred anger. In Armenia in 2015, protesters clashed with police after an electricity price rise was recommended.

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(News report from Issue No. 331, published on June 5 2017)

Turkmen gas supplies to China rise

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MAY 31 2017 (The Bulletin) — Turkmenistan will increase gas sales to China, its main client, by nearly 10% this year, the CEO of Turkmengas, Myrat Archayev, was quoted by media as saying. Turkmenistan currently pumps 35b cubic metres of gas to China. This will rise to 38b cubic metres. Mr Archayev said gas supplies to Iran would remain at 7b cubic metres despite a row over unpaid bills.

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(News report from Issue No. 331, published on June 5 2017)