APRIL 24 2017 (The Conway Bulletin) — The Asian Development Bank (ADB) approved an $80m loan earmarked for the electrification of a 145km stretch of railway in Uzbekistan’s Ferghana Valley. Uzbekistan has been attracting more lending and investment from international financial institutions since Shavkat Mirziyoyev took over as president in September last year.
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(News report from Issue No. 326, published on April 28 2017)
APRIL 24 2017 (The Conway Bulletin) — Wizz Air, the Budapest-based low- cost airline, said that it had carried 100,000 people to Georgia in the first six months it operated flights to the Georgian city of Kutaisi. It also said that passenger numbers had risen by 200% in the first quarter of 2017. Wizz Air open its route from Kutaisi to Warsaw in September 2016 . This year it also expects to start operating a route between Kutaisi and London Luton airport. Air passenger numbers travelling to and from Georgia have rocketed leading international airlines to increase flights or set up new routes to either Kutaisi or Tbilisi.
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(News report from Issue No. 326, published on April 28 2017)
APRIL 19 2017 (The Conway Bulletin) — Spayka, an Armenian industrial and transport conglomerate with strong links to the elite, said that it intends to boost its food manufacturing department with a $70m investment in cheese-making. Specifically, Spayka said that it planned to create 300 jobs and export cheese to other countries in the South Caucasus and to Russia. Armenia is looking for ways to boost its economy after a sharp downturn in 2014-16.
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(News report from Issue No. 325, published on April 17 2017)
APRIL 12 2017 (The Conway Bulletin) — Chinese investment company SMS agreed to buy a 51% stake in Kazakh car-maker Allur, the company said in a press release. The press release didn’t say how much SMS was going to pay for its stake or when the transaction would take place. Allur is one of the biggest car- makers in Kazakhstan and owns stakes in the SaryarkaAvtoProm and Agromash factories. Kazakhstan’s car manufacturing sector has been hard hit by the economic slowdown.
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(News report from Issue No. 325, published on April 17 2017)f
APRIL 17 2017 (The Conway Bulletin) — Turkmenistan opened a tender process to build a second potash plant, only a couple of weeks after opening the country’s first one. The move appears to be part of a drive aimed at reducing the country’s reliance on gas exports. The price of gas has collapsed since 2014, hitting Turkmenistan’s economy hard. Belarus designed and built the first potash plant but, despite pledges of loyalty and partnership, the contract to build the second plant appears to have been thrown open to all potential suitors.
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(News report from Issue No. 325, published on April 17 2017)
APRIL 17 2017 (The Conway Bulletin) — Car manufacturers in Kazakhstan sold 7,569 new cars in the first quarter of the year, a drop of 28.2% on the same period in 2016, Kazakhstan’s Union of Automotive Industry Enterprises, KazAvtoProm, said in a press release. The data will be a blow to the government which has been saying that a sharp economic downturn since mid-2014 has now been reversed.
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(News report from Issue No. 325, published on April 17 2017)
APRIL 18 2017 (The Conway Bulletin) — Azerbaijan’s state oil fund Sofaz is worth £33.2b, officials said, a slight increase from $33.147 at the beginning of the year. This figure is important because Azerbaijan has been borrowing cash from Sofaz to top up its state budget which has shrunk with falling oil prices.
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(News report from Issue No. 325, published on April 17 2017)
APRIL 12 2017 (The Conway Bulletin) — In a clear sign of renewed confidence that oil prices will stay at around $50-55/barrel, KMG EP, the London-listed division of the Kazakh state energy producer Kazmunaigas said that it was going to raise its capital expenditure by 12% to 133b tenge ($369m). The company said that the extra investment would be used to improve the efficiency of existing projects.
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(News report from Issue No. 325, published on April 17 2017)
ALMATY, APRIL 20 2017 (The Conway Bulletin) — South Korea’s Kookmin Bank sold its remaining 41.93% stake in Bank CenterCredit to Bakhytbek Baiseitov’s Tsenabank, bringing to an end its unhappy nine year foray into the Kazakh banking sector.
Kookmin’s retreat from Kazakhstan also highlights just how foreign banks have struggled in the Kazakh banking sector. The 2008/9 Global Financial Crisis inflated Kazakh banks’ bad debt portfolios turning what had looked like an attractive market to foreign investors into a headache virtually overnight.
A short note released on the Kazakh Stock Exchange by Center- Credit didn’t give much way accept to confirm the sale. Earlier this year, Tsenabank said it would buy up all of Kookmin Bank’s stake. In March it also confirmed that Mr Baiseitov, one of Kazakhstan’s richest people, had bought a 10% stake from the IFC, part of the World Bank. The IFC had always intended to sell its stake, bought in 2010, by 2017.
There was no statement from Kookmin which has been looking to sell its stake in CenterCredit almost as soon as it bought it.
Kookmin’s timing was initially poor. It bought a 30% stake in CenterCredit from Mr Baiseitov, who set up the bank, in March 2008 for $500m. By August 2008 the Global Financial Crisis had virtually wiped out its investment. The devaluation of the Kazakh tenge in 2015 also hit the bank, forcing Kookmin to write- down its value again. The 2008 deal to buy into CenterCredit had been part of a now globalisation push by Kookmin. It forced the resignation in 2010 of then-CEO Kang Chung-won.
Other foreign banks which have invested in Kazakhstan only to pull out a few years later include Britain’s HSBC and Italy’s Unicredit.
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(News report from Issue No. 325, published on April 17 2017)
APRIL 18 2017 (The Conway Bulletin) — Azerbaijan’s Silk Way Airlines bought 10 Boeing 737 passenger air- planes in a deal which some media reports said could be worth as much as $1.1b. The deal also marks a change of strategy for the Baku-based airline, which is part of the Silk Way conglomerate. Up until now, the airline had focused on cargo transport. It now says that it has drawn up plans to lease the passenger airplanes out.
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(News report from Issue No. 325, published on April 17 2017)