FEB. 16 2017 (The Conway Bulletin) — Iran will lend 83m euro to build a third power transmission line from Armenia, the Iranian media reported. Iran has become an increasingly important importer of electricity from Armenia over the past few years. Armenia has also increased imports of Iranian gas. Relations between the two neighbours have blossomed.
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(News report from Issue No. 317, published on Feb.17 2017)
FEB. 16/17 2017 (The Conway Bulletin) — Talco, the Tajik aluminium smelter owned through a series of offshore companies by the family of President Emomali Rakhmon, has struck a deal to end a long-running dispute with Russia’s Rusal, both Eurasianet and RFE/RL reported.
A court in 2014 ruled against Talco, in a ruling that focused on a breach of contract a decade earlier, meaning that it needed to pay Rusal up to $375m.
Now, Eurasianet and RFE/RL reported, Talco will pay Rusal the full amount it has been fined plus an extra sum for control of the Hyatt hotel and a business centre in Dushanbe, which Rusal had owned.
The deal appears to allow both sides to save face and also for Rusal to quit Tajikistan.
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(News report from Issue No. 317, published on Feb.17 2017)
FEB. 15/16 2017 (The Conway Bulletin) — The Dutch convenience store chain Spar opened up more stores in Azerbaijan and Georgia, part of its drive to increase its global coverage. Spar said that it had opened three more stores in Baku at the end of last year, following the opening of its first store in the Azerbaijani capital in December 2015. In Georgia, Spar also opened another store, bringing to 21 its total for Georgia. Spar has expanded outside its central Europe heartland by both owning its stores directly and granting an independent retailer the rights to use its brand.
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(News report from Issue No. 317, published on Feb.17 2017)
FEB. 15 2017 (The Conway Bulletin) — An IMF delegation flew into Tbilisi for a two-week mission that could trigger a major injection of cash linked to economic changes. Georgia has been one of the most reform-minded countries in the former Soviet Union acting as something of a posterboy for IMF- backed changes. The government, though, is also looking for support to push through a tough economic downturn. GDP growth in 2016 was 2.2%, its lowest since 2009 when the economy shrank by 3.8% during the Global Financial Crisis.
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(News report from Issue No. 317, published on Feb.17 2017)
FEB. 15 2017 (The Conway Bulletin) — Takehiko Nakao, the president of the Asian Development Bank (ADB), will visit Uzbekistan later this month, the Trend news agency reported quoting the ADB’s Tashkent office, raising the possibility of a major cash injection for Uzbek business. Azernews reported that the ADB was lining up loans worth $2.1b for various sectors of Uzbekistan’s economy, including its power sector. Earlier this month the European Bank for Reconstruction and Development (EBRD) sent a high-profile delegation to Tashkent for talks with senior officials.
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(News report from Issue No. 317, published on Feb.17 2017)
FEB. 14 2017 (The Conway Bulletin) — Kazakhstan will reduce the area it uses to grow wheat over the next few years, although it will maintain its current crop because of improvements in efficiency, the blackseagrain.net website reported by quoting the Kazakh deputy agriculture minister Kayrat Aytuganov. Wheat has become an increasingly important part of the Kazakh economy. “We must collect larger volumes of quality grain from smaller areas. New markets are opening for exports of exactly Kazakh produce,” Mr Aytuganov said.
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(News report from Issue No. 317, published on Feb.17 2017)
FEB. 14 2017 (The Conway Bulletin) — London-listed KAZ Minerals, formerly known as Kazakhmys, has started sulphide production at its Atokay mine in Kazakhstan, the mining-journal.com website reported. It said that production was in-line with expectations and that output would be ramped up throughout the year. KAZ Minerals is best known for its copper production.
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(News report from Issue No. 317, published on Feb.17 2017)f
FEB. 13 2017 (The Conway Bulletin) — SCAT, a privately-owned airline based in Shymkent in south Kazakhstan, increased its passenger numbers to 1.269m in 2016 up from 1.229m in 2015, media reported. The slight increase in passenger numbers, though, may mask a drop in relative demand, in-line with the poor economic conditions, because SCAT has increased the number of flights and routes it flies. SCAT mainly flies domestic routes, although it is adding more foreign destinations. In 2013, a SCAT plane crashed near Almaty killing 21 passengers and crew.
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(News report from Issue No. 317, published on Feb.17 2017)
FEB. 17 2017 (The Conway Bulletin) — Georgia Healthcare’s shares surged 8.4% to near an all-time high of 379/$1 after earnings results showed that it had tripled its pretax profit in the fourth quarter of last year thanks to organic growth and acquisitions.
It also said that by the end of 2018, it expects to have doubled its revenues compared to 2015.
Long a favourite for investors looking to invest directly into the South Caucasus, Georgia Healthcare stock gives them a slice of the growing Georgian private healthcare sector.
The only downside of the earnings results was a pretax loss for its insurance division. Still, analysts were bullish. Jefferies increased its target price on Georgia Healthcare to 435p from 420p. Numis Securities stuck with its target price of 420p.
The other big mover of the week was KAZ Minerals, the Kazakhstan-focused copper producer, which finished up 5.7% at 559p. On Tuesday its shares had peaked at 592p, its highest level for nearly four years.
Copper prices have recovered since they started to fall in mid- 2015. KAZ Minerals also announced the start-up of new production in Kazakhstan.
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(News report from Issue No. 317, published on Feb.17 2017)
ALMATY, FEB. 13 2017 (The Conway Bulletin) — The Kazakh government is preparing what would amount to a 2 trillion tenge ($6.5b) bailout of its banking sector only eight years after it was forced to buy up a handful of failing banks during the Global Financial Crisis of 2008/9.
The plan is a virtual admission that policies brought in by the Central Bank since the Global Finance Crisis have failed to prevent another banking meltdown.
The sharp economic downturn triggered by a collapse in oil price in mid-2014, has wiped out jobs, pressured inflation and knocked 50% off the value of the tenge. Despite being forced to increase their capital and pass Central Bank stress tests, the Kazakh banking sector has been hit badly and is now holding billions of dollars of bad debt.
Earlier this month, the IMF said that urgent action was needed to stave off another banking collapse. Now that warning appears to have been heeded by the Kazakh government after it announced the emergency plan.
In a statement on the finance ministry’s website, Bakhyt Sultanov, the finance minister, said that the government would pull in funds from the country’s oil wealth fund to plug the financial shortfall.
The Interfax news agency later reported by quoting the deputy governor of the Central Bank, Oleg Smolyakov, that the cash would be injected into the government’s Problem Loan Fund, through which it has been funnelling cash to banks.
The government has already doubled its loans to troubled banks to 400b tenge ($1.3b), half of which has been borrowed by Kazkommertsbank.
Kazkommertsbank bought the debt-laden BTA Bank in 2014/15 in a deal heavy with political undertones. It is now in talks with Halyk Bank, owned by President Nursultan Nazarbayev’s daughter Dinara and her husband Timur Kulibayev, to merge and create a banking giant.
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(News report from Issue No. 317, published on Feb.17 2017)