Tag Archives: business

Turkmen president travels to Qatar looking for investors

MARCH 15 2017 (The Conway Bulletin) — Turkmen president Kurbanguly Berdymukhamedov travelled to Qatar to try to charm its leaders into investing in Turkmenistan. The Turkmen economy is under pressure from sustained low oil and gas prices. In particular Qatar’s state news agency said that Mr Berdymukhamedov was looking for investment in the so-called TAPI gas pipeline that will run from gas fields in Turkmenistan across Afghanistan to Pakistan and India, and also for investment in gas processing plants.

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(News report from Issue No. 321, published on March 20 2017)

Azerbaijan buys trains from Kazakhstan

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MARCH 13 2017 (The Conway Bulletin) — A Kazakh factory producing trains has delivered 10 locomotives to Azerbaijan, media reported. The Trend news agency said that Lokomotiv Kurastyru Zauyty had also sent locomotives to Kyrgyzstan, Tajikistan, Ukraine and Turkmenistan. This is important for Kazakhstan as it is trying to boost its manufacturing sector. Azerbaijan is, itself, trying to boost its role as a pivot for global trade and has said it will buy more trains if it can secure a north-south trade route between India and Russia.

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(News report from Issue No. 321, published on March 20 2017)

Kyrgyzstan relaxes Iranian visa rules

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MARCH 16 2017 (The Conway Bulletin) — Kyrgyzstan said that it had simplified visa rules for Iranians, matching a trend in the region. Iran and Kyrgyzstan have been boosting trade, diplomatic and tourist links. Georgia and Armenia have already scrapped visa requirements for Iranians and other countries are also relaxing rules. Iran is seen as an important economic driver for the region, especially since some sanctions were lifted last year.

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(News report from Issue No. 321, published on March 20 2017)

Armenia signs up to be EITI candidate

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YEREVAN, MARCH 9/14 2017 (The Conway Bulletin) — Armenia’s government started the task of implementing various standards ordered by the global governance watchdog, the Extractive Industries Transparency Initiative (EITI), five days after it was approved as a candidate country.

At the same meeting in Bogota that Armenia’s candidature was approved, the EITI suspended Azerbaijan for not improving its rules over NGO registration. The next day Azerbaijan quit the group calling its biased and accusing it of mission creep.

Still, Armenian PM’s chief of staff, Davit Harutyunyan, explained the importance for Armenia of the EITI’s candidate status.

“A well-managed natural resource extraction can become more profitable for the citizens of Armenia, and the EITI is the right tool to achieve this goal,” he was quoted as saying in an EITI press release.

Originally aimed at improving governance in countries where the extractive industries, either mining or oil and gas, dominate, the EITI Standards have become more widespread and diluted. Armenia mines some gold and copper, but it is a small part of its economy compared to other products such as electricity and banking. According to the EITI press release, mining accounts for just 5% of Armenia’s GDP.

But, as well as widening its remit, the EITI Standards have become important in international fiance. International lenders use it as governance benchmark. The EBRD has warned Azerbaijan that it may consider pulling funding from projects if it fails the EITI Standards. It has yet to comment on Azerbaijan quitting the EITI.

At its AGM, the EITI said both Tajikistan and Kyrgyzstan had made progress towards meeting its Standards but there was more work to be done.

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(News report from Issue No. 321, published on March 20 2017)

Markets: TBC Bank

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MARCH 20 2017 (The Conway Bulletin) — Rather like the Georgian rugby team that it sponsors, TBC Bank is on the up. The bank, which has a 37% share of the consumer loans market in Georgia, is listed on the London Stock Exchange. It pushed up to near an all-time high on March 17 of 1,497p/$1. This is 29% higher than it was at its IPO in mid-August.

And analysts say there is more to come from TBC. It’s main rival is Bank of Georgia, which has a market share of around 32%. It’s share price has tripled since it listed five years ago.

Analysts have also said that the Georgian consumer market has plenty of room to grow. They point out that the market is still underdeveloped and that banks’ loan books are growing by 20% every year.

There are, of course, risks for investors. These come mainly in the exposure to Georgia, which has a high level of political and economic risk. Its currency has been dented and its politics can be fraught.

Just like the Georgian rugby team, which is knocking on the door of the venerable Six Nations tournament, TBC Bank is heading in the right direction for increased kudos and recognition.

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(News report from Issue No. 321, published on March 20 2017)

Kazakh airline signs codeshare deal with Lufthansa

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MARCH 15 2017 (The Conway Bulletin) — Air Astana, half owned by the Kazakh government and half owned by Britain’s BAE Systems, signed a codeshare agreement, effectively allowing the airlines to sell each other’s flights between Frankfurt and Astana or Almaty. The agreement is a boost for Air Astana. It already has code sharing agreements with a handful of high- profile airlines including KLM, Turkish, Etihad and Air France.

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(News report from Issue No. 321, published on March 20 2017)

Tough times for Kazakh banks, says S&P

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MARCH 14 2017 (The Conway Bulletin) — The ratings agency Standard & Poor’s said that banks in Kazakhstan will face another tough year because the Kazakh economy is still labouring under slow growth rates, depressed commodity prices and exchange rate volatility. The Kazakh Central Bank has set up a fund to help banks that are struggling through this regional economic downturn.

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(News report from Issue No. 321, published on March 20 2017)

Turkmenistan Airline changes corporate structure

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MARCH 11 2017 (The Conway Bulletin) — Turkmenistan’s official press service said that the corporate structure of Turkmenistan Airlines had been changed to a open joint-stock company. Under the new structure, the government will own a 70% stake in the company, the aviation department within the ministry of transport will own 27% and Turkmenistan Airline will own 3%. It’s unclear why the corporate structure has been changed.

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(News report from Issue No. 321, published on March 20 2017)

Fitch says more banks in Azerbaijan are likely to fail before the end of the year

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MARCH 16 2017 (The Conway Bulletin) — Fitch the ratings agency said that more banks in Azerbaijan would fail this year as the economy continued to labour under the pressure of depressed oil prices and bad debts.

The Azerbaijani banking sector has been faltering, forcing a major investment by the government into its biggest bank — International Bank of Azerbaijan. It now owns 76.7% of the bank, up from 55%. Last year, several smaller banks had their licences removed or were forcibly merged.

“Fitch expects the banking sector to remain loss-making in 2017 and we have Negative Outlooks on most of the Azerbaijani banks we rate,” it said in a statement.

“Banks will not be able to absorb new NPLs (non-performing loans) through growth, given the sluggish economy and capital constraints.”

Importantly it also said that non- performing loans, those considered more than 90 days overdue, had increased to average 21% of the banks’ loan portfolio, up from 12% at the end of 2015.

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(News report from Issue No. 321, published on March 20 2017)

Two banks merge in Kazakhstan

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MARCH 15 2017 (The Conway Bulletin) — Tengri Bank and Capital Bank Kazakhstan are to merge, they said in a statement, the first of what observers hope will be a series of mergers in the fragmented banking sector. Observers have said that there are too many small and undercapitalised banks and that the sector needs to consolidate. The merged bank will be the 17th largest in Kazakhstan and have a capital ratio of 19% which is more than double the minimum level, Tengri Bank and Capital Bank said.

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(News report from Issue No. 321, published on March 20 2017)