Tag Archives: business

Kazakhstan plans new power plant

FEB. 24 2017 (The Conway Bulletin) — Kazakhstan will build a new hydropower plant with a 25MW capacity on the Turgusun river in the east of the country, media reported quoting the Kazakh Development Bank. The 11.3b tenge ($36.2m) power plant will, it is planned, produce 23% of the region’s electricity as well as generate new jobs. Kazakhstan is trying to boost power production to meet an increase in demand triggered by migration and a rise in living standards.

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(News report from Issue No. 318, published on Feb.24 2017)

Tajikistan and Uzbekistan cancel flight at last minute

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DUSHANBE, FEB. 20 2017 (The Conway Bulletin) — After months of build- up and a successful dry-run, the start of a regular commercial flight between Dushanbe and Tashkent was cancelled at the last minute.

Both sides blamed the other for cancelling what would have been the first regular service between the Tajik and Uzbek capitals for 25 year and a tangible sign that relations between the two countries had started to improve after years of feuding.

Somon Air, Tajikistan’s main airline, was due to make the flight, a repeat of a one-off flight it made earlier this month. It said that Tashkent airport had contacted it and said that permission to make the flight had been withdrawn for security reasons. Tashkent airport denied this and said that the flight had been cancelled because Somon Air had failed to submit the correct paper- work in time.

Having tried to pin the blame on Tashkent airport for the flight failing to fly, Somon Air then admitted it had been at fault and promised to make the flight over the “next few days”.

Media later report that Somon Air had fired Alisher Rustamov, director of commercial operations, for failing to ensure that the flight took off.

Relations between Uzbekistan and its neighbours have improved markedly since Shavkat Mirziyoyev became president at the end of last year. His predecessor, Islam Karimov, was known to be cantankerous and relations with his neighbours had soured during his presidency. He died in September 2016 and his daughter, Gulnara, who had harboured ambitions to succeed him, was sidelined.

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(News report from Issue No. 318, published on Feb.24 2017)

Azerbaijani section of Southern corridor to work by 2020

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FEB. 19 2017 (The Conway Bulletin) — The so-called Southern Gas Corridor running from the Azerbaijani section of the Caspian Sea to Europe will be operational by 2020, Azerbaijani president Ilham Aliyev said at an international security conference in Munich. He said that the South Caucasus Pipeline was 80% complete, the TAP pipeline line was 35% complete and the extension on the Shah Deniz gas field was 90% complete.

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(News report from Issue No. 318, published on Feb.24 2017)

Georgia expects new funding from IMF

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FEB. 21 2017 (The Conway Bulletin) — Georgia’s economy minister Giorgi Gakharia told Reuters in an interview that he expected a new funding deal with the IMF to be concluded at the end of its two week mission which started on Feb. 15. Mr Gakharia said that the IMF would be looking to link a funding mechanism to structural reforms of the economy and that Georgia’s main challenges were “pension reform, reform of capital markets, other structural reforms”. Georgia had agreed a three year $136m standby deal with the IMF that had been due to run until July. Reuters said that it had been allowed to lapse, though, because of disagreements over reforms.

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(News report from Issue No. 318, published on Feb.24 2017)

Two Tajik banks lose licences

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DUSHANBE, FEB. 24 2017 (The Conway Bulletin) — Tajikistan’s Central Bank withdrew operational licences for Fononbank and Tajprombank, two months after it unveiled a $490m plan to save its banking sector from collapsing under the weight of bad debt.

It two terse statements, the Tajik Central Bank avoided giving details on just why it had withdrawn the banks’ licences but it did say that it was studying the banks’ various issues.

Tajik media later reported that customers of Fononbank and Tajprombank were unable to withdraw their savings.

A depreciation in the value of the Tajik somoni and a general economic downturn linked to a recession in Russia, which generates much- needed jobs and remittances, has pressured Tajikistan’s banking sector.

The government has already pumped millions of dollars into the country’s two biggest banks, Agroinvestbank and Tojiksodirot. It also promised in December to support Fononbank and Tajprombank. The government has also been talking to the IMF about receiving funds and the European Bank for Reconstruction and Development (EBRD).

Neither the IMF nor the EBRD has committed any funds yet, although the EBRD pledged last year to buy an undisclosed stake in Tojiksodirot for $100m.

ENDS

(News report from Issue No. 318, published on Feb.24 2017)

Swiss private bank may have failed to stop Uzbek money laundering

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FEB. 23 2017 (The Conway Bulletin) — Swiss prosecutors confirmed that they were investigating the private Geneva-based bank Lombard Odier for failing to prevent money laundering by Gulnara Karimova, the daughter of Uzbekistan’s former president Islam Karimov.

The investigation is the first time that a Western bank has been directly linked to a bribe-taking racket run by Ms Karimova. She took bribes worth hundreds of millions of dollars from telecoms companies looking to access the Uzbek market in 2007/8.

Lombard Odier is one of the oldest and most respected names in Swiss private banking and the investigation may signal the start of a deeper and wider probe into how Western banks have helped, or at least failed to stop, Ms Karimova’s money laundering. So far only the telecoms companies — Telia, Telenor and Vimpelcom — have had their links with Ms Karimova scrutinised.

“The investigations are being made on the basis of information revealed by criminal investigations … into allegations of money laundering involving suspects that include the daughter of the former president of Uzbekistan,” Reuters quoted Switzerland’s Office of the Attorney General as saying.

The probe had first been reported by the Bilanz magazine.

Ms Karimova has been under house arrest in Tashkent since 2014 and her closest associates have been jailed.

Lombard Odier also released a statement saying that it was cooperating with the investigation and that it had reported suspicious transactions to the Swiss authorities in 2012.

Before returning to Tashkent at the end of 2013, Ms Karimova had been based in Geneva as Uzbekistan’s ambassador to the UN. After Lombard Odier’s report of suspicious transactions in 2012, the Swiss authorities froze bank accounts linked to her which held 800m Swiss francs ($795m).

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(News report from Issue No. 318, published on Feb.24 2017)

Stock market: KAZ Minerals, Bank of Georgia

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FEB. 24 2017 (The Conway Bulletin) — Bank of Georgia’s share price barely budged after it released full year results for 2016 that showed an increase in profit held back by a 10.5% devaluation in the Georgian lari throughout the year.

By Feb. 23, its shares were trading at 2,987p on the London Stock Exchange, its lowest level since the end of January. Analysts said that the poor performance of the lari was holding back the Bank of Georgia share price, confirming just how exposed the bank is to Georgia’s macro-economic performance.

Over at KAZ Minerals, the Kazakhstan-focused copper producer, it was a more positive, upbeat earnings session.

It said that its revenues had increased in 2016 by 15% to around $766m, because a clutch of new mines had now come on-stream. This appeared to impress the market and pushed up its shares by another 2.6% to 573p on the London Stock Exchange, near a four year high of 589p hit earlier in the month.

Analysts are split on the KAZ Minerals stock. JP Morgan and Credit Suisse kept their neutral rating on the stock while Citigroup reaffirmed its ‘buy’ rating.

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(News report from Issue No. 318, published on Feb.24 2017)

KAZ minerals revenue rises

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FEB. 23 2017 (The Conway Bulletin) — Revenues at Kazakhstan-focused copper producer KAZ Minerals jumped 43% in 2016 to $969m because of the start-up of production at its Bozshakol copper- gold mine in Kyrgyzstan and the Aktogay open pit copper mine in Kazakhstan. KAZ Minerals is listed on the London Stock Exchange and used to be called Kazakhmys

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(News report from Issue No. 318, published on Feb.24 2017)

Armenia’s economic activity rises

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FEB. 20 2017 (The Conway Bulletin) — Armenia’s economic activity index, considered a key barometer of the economy’s health, was 6.5% higher in January compared to a year earlier. A 12% rise in industrial production was the biggest driver of the economic boost. Importantly, though, agricultural output was largely flat.

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(News report from Issue No. 318, published on Feb.24 2017)

Buy gold, not som, says Kyrgyz Central Bank chief

BISHKEK, FEB. 15 2017 (The Conway Bulletin) — In an interview with the Bloomberg news agency, Tolkunbek Abdygulov, head of the Kyrgyz Central Bank essentially told ordinary Kyrgyz that they should buy gold rather than keep their savings in the unpredictable Kyrgyz som.

Gold is considered a safe-haven for investors and savers whenever the global outlook is fragile but it holds added importance in Kyrgyzstan, which relies on the Kumtor gold mine to produce over a tenth of its GDP.

Like the rest of the region, an economic slowdown has hit the Kyrgyz economy, denting GDP growth and undermining the economy. The Kyrgyz som has slid from around 50/$1 to 69/$1.

Mr Abdygulov appeared to reference this som weakness in his interview with Bloomberg.

“Gold can be stored for a long time and, despite the price fluctuations on international markets, it doesn’t lose its value for the population as a means of savings,” he was quoted as saying.

Over the past couple of years, the Kyrgyz Central Bank has offered to sell gold in different sizes to ordinary Kyrgyz and to store it safely. Mr Abdygulov said that the Bank had sold around 140kg of gold through this system.

And the Central Bank appears to be leading by example. It has increased its purchases of gold while many other central banks have reduced theirs. Bloomberg data showed that Kyrgyzstan currently holds around $190m of gold in its reserves, four times the level of 10 years ago.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)