FEB. 25 2015 (The Conway Bulletin) – Georgia’s Central Bank wants commercial banks to present plans to restructure US dollar loans to help them cope with the drop in the value of the lari. An estimated 60% of banks’ loans are held in foreign currencies making them more expensive to service.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 221, published on March 4 2015)
FEB. 28 2015 (The Conway Bulletin) – The opposition United National Movement (UNM) called for a rally in Tbilisi against the government on March 21. The UNM has said Georgia’s economy is on the verge of collapse and blames the government. The demonstration may attract large numbers and is a potential flashpoint.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 221, published on March 4 2015)
FEB. 25/MARCH 2 2015 (The Conway Bulletin) – Ratings agencies warned that the 30% devaluation of the Azerbaijani manat last month would hurt the capitalisation of the country’s banks. Fitch said that most of debt held by Azerbaijani banks was in foreign currencies, making it more expensive for them to service.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 221, published on March 4 2015)
FEB. 25 2015 (The Conway Bulletin) – Remittance flows from Russia to Tajikistan dropped by 8.3% in 2014 compared to 2013, the Tajik Central Bank said. Remittances are vital to the Tajik economy but have dried up slightly since sanctions and a drop in energy prices hit the Russian economy.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 221, published on March 4 2015)
MARCH 2 2015 (The Conway Bulletin) – Uzbekistan’s deputy PM, Ulugbek Rozukulov, met with the Azerbaijani economy minister, Shahin Mustafayev to discuss increased cooperation and specifically whether Azerbaijan will be able to buy cars that had been built for the Russia market before the collapse of the rouble and the economic crisis.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 221, published on March 4 2015)
FEB. 25 2015 (The Conway Bulletin) – Kazakh president Nursultan Nazarbayev called an early presidential election for April 26. Pro-Nazarbayev groups have been asking for an election in order to underline his authority as Kazakhstan deals with a tough economic climate.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 221, published on March 4 2015)
MARCH 2 2015 (The Conway Bulletin) – The collapse in oil prices forced Max Petroleum, a British-Kazakh oil and gas company, to suspend trading on the London AIM stock exchange.
In a statement, Max Petroleum said it was in negotiations to restructure its debt with Sberbank and other creditors.
“If current negotiations are unsuccessful, or if other events outside the control of the Company require that the Company ceases trading while such negotiations are ongoing, then the consequences will be negative for all stakeholders in the Company,” the company statement said.
Last month Max Petroleum squarely blamed the slump in global oil prices for its problems which wiped out profit margins and deterred potential investors.
The Max Petroleum’s troubles are a microcosm of the problems facing Kazakhstan-orientated companies trying to weather an economic downturn linked to the oil price drop and the turmoil in Russia’s sanction-hit economy.
Almaty-based confectionery plant Rakhat, which South Korea’s LOTTE bought in 2013/2014 in a multi-million dollar deal, also said that it had had to lay off 500 of its 3,800 workers. It blamed unfair competition from cheaper Russian sweets.
Once feted as one of Kazakhstan’s most famous companies outside the extractive industries, Rakhat is now trying to eke its way out of the economic storm — just like most other Kazakh companies.
Max Petroleum, listed on the LSE since 2005, is a small Kazakhstan oil producer with an output of around 200,000 tonnes of oil a year.
In August 2014, AGR Energy, linked to the prominent Assaubayev family, made a deal to buy 51% of Max Petroleum for £37m ($62m), promising to embark on a significant investment to revitalise the company. The slump in oil prices, though, appears to have deterred AGR Energy from follow through with the deal and the promised investment.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 221, published on March 4 2015)
FEB. 27 2015 (The Conway Bulletin) – Armenia’s economy grew by 3.4% in 2014, lower than the expected 5.2%, the country’s statistics office said quoting preliminary data (Feb. 27). The economies of Central Asia and the South Caucasus suffered from a general downturn in the second half of last year due to falling oil prices and problems in Russia’s economy.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 221, published on March 4 2015)
FEB. 25 2015 (The Conway Bulletin) – Armenia has asked Russia not to raise the price it pays for gas despite a drop in the value of its dram currency, media reported quoting the head of the Public Services Regulatory Commission (PSRC) Robert Nazaryan.
Russia’s Gazprom owns the gas distribution system in Armenia and can, therefore, dictate the price that Armenians pay for their gas.
The worry for officials in Armenia is that the dram lost around 15% of its value against the US dollar at the end of last year. Energy prices are set in US dollars, making it more expensive for people in Armenia to buy.
“In this connection at this moment the Armenian side is conducting negotiations with the Russian side for the natural gas price not to be raised because of the dram-dollar fluctuations,” media quoted Mr Nazaryan as saying.
Russia dominates Armenia’s economy and by asking Gazprom to keep the cost of gas consistent, Mr Nazaryan is effectively asking for a subsidy. If Gazprom agrees, Armenia will fall further under the control of the Kremlin.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 221, published on March 4 2015)
FEB. 26 2015 (The Conway Bulletin) – Bidzina Ivanishvili, Georgia’s former PM and its richest and arguably most powerful man, accused Central Bank chief Giorgi Kadagidze of not doing enough to protect the country from the economic downturn enveloping the region.
Inflation is rising in Georgia, the lari currency is falling in value and businesses are worried. This has all heaped pressure on the 34-year-old Mr Kadagidze, who has been in the top job at the Central Bank since 2009.
Mr Ivanishvili’s intervention will pile on more pressure.
“The Governor of the NBG (National Bank of Georgia), Giorgi Kadagidze, who was appointed by the previous government, led us with his inactivity and incorrect actions to the lari crisis,” he said in a statement released through an NGO he has set up.
A fall in oil prices and economic turmoil in Russia have triggered inflation across Central Asia and the South Caucasus.
Some economic experts argue that Georgia’s Central Bank could have done more to dampen the inflation; others have said the government is merely looking for a scapegoat and that Mr Ivanishvili’s intervention is destabilising.
Vakhtang Charaia, director of the Center for Analysis and Forecast at Tbilisi State University, said: “Ivanishvili’s statement could lead to political instability, which in turn would negatively affect Georgia’s investment climate.”
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 221, published on March 4 2015)