Tag Archives: economy

Kazakhstan predicts fuel price increase

MARCH 14 2014 (The Conway Bulletin) — A rare admission from a Kazakh insider that the country’s energy policies may not be working hints at future fuel price increases, analysts have said.

Sauat Mynbayev, chairman of state-owned KazMunaiGas, said sending Kazakh oil to China to be processed into fuel and then re-importing it to make up for a shortfall in domestic refining capacity has become too expensive.

“The transit operations regarding the refining of Kazakhstan’s oil in China has become unprofitable,” media quoted him as saying.

Analysts immediately unpicked his statement. What this meant, they said, was that fuel prices would rise shortly.

And that, as the government knows, will be deeply unpopular.

Oil-rich Kazakhstan has a chronic lack of refining capacity. The three refineries at Shymkent, Pavlodar and Atyrau are often under repair. New refineries are only scheduled to come on-stream in five or six years time.

To make up for the shortfall, Kazakhstan is importing refined fuel from China and Russia. It is also sending unrefined fuel into China for processing and then shipping it back over the border.

Added to this complex arrangement is Kazakhstan’s 20% currency devaluation in February which makes imports even more expensive.

Mr Mynbayev has just been made head of Kazakhstan’s Greco-Roman wrestling federation, a position that underlines his insider credentials.

For an insider to admit a policy problem is almost unheard of in Kazakhstan. As analysts have now warned, expect fuel price increases.

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(News report from Issue No. 176, published on March 19 2014)

IMF supports Azerbaijan’s limits on lending

MARCH 17 2014 (The Conway Bulletin) — The International Monetary Fund (IMF) has thrown its support behind the Azerbaijani government’s order to banks to stop lending so much cash to consumers.. At a press briefing the IMF head in Azerbaijan, Raja Almarzoqi, said: “A decrease in the share of consumer loans would be beneficial.”

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(News report from Issue No. 176, published on March 19 2014)

EBRD issues Eurobond in Georgian lari

MARCH 17 2014 (The Conway Bulletin) — Looking to give Georgia’s currency a boost, the European Bank for Reconstruction and Development (EBRD) issued its first debt in lari. The 2-year bonds were worth 50m lari ($29m). The placement appears to follow an EBRD strategy. Last month it issued 1-year bonds worth 2b Armenian drams ($5m).

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(News report from Issue No. 176, published on March 19 2014)

Russia pledges new investments in Armenia

MARCH 15 2014 (The Conway Bulletin) — Russia’s transport minister, Maxim Sokolov, visited Yerevan and pledged an extra $50m investment in various joint-ventures, a sort of pre-Customs Union entry sweetener for Armenia. Pushing aside the EU’s advances, Armenia has agreed to join the Russia-led Customs Union later this year.

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(News report from Issue No. 176, published on March 19 2014)

Azerbaijan’s non-oil economy grows

MARCH 17 2014 (The Conway Bulletin) — Azerbaijan’s non-oil sector, a key benchmark of economic development, grew by 8.8% in January and February of this year compared to the same period in 2013, the state statistics agency reported. International economists have said that Azerbaijan needs to reduce its economic dependence on energy.

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(News report from Issue No. 176, published on March 19 2014)

Inflation rallies in Uzbekistan

MARCH 8 2014 (The Conway Bulletin) — Food prices in Uzbekistan may have risen by as much as 30-70% over the last few weeks, an anecdotal survey by the Uzmetronom.uz website said. While Uzmetronom.uz’s figures may be out, there is little doubt that rising energy prices and falling business activity is pushing up inflation in Uzbekistan.

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(News report from Issue No. 175, published on March 12 2014)

Kazakhstan increases oil export duty

MARCH 11 2014 (The Conway Bulletin) — Kazakhstan will increase export duty on oil by 33% to $80 per tonne from April 1 to boost budget revenues, economy minister Yerbolat Dossayev said. Kazakhstan may be using cash raised through the oil export tariff to bolster its economy after devaluing its currency by 20% in February.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 175, published on March 12 2014)

Georgia’s capital approves city budget

MARCH 7 2014 (The Conway Bulletin) — Tbilisi’s city council voted through a 2014 budget after previously rejecting it twice. Passing the budget will allow stalled city projects to start again. The council is controlled by the Georgian Dream party; Former President Mikheil Saakashvili’s party controls the Tbilisi city hall, which submitted the original budget for approval.

(News report from Issue No. 175, published on March 12 2014)

Azerbaijan launches first Eurobond

MARCH 10 2014 (The Conway Bulletin) — It’s tough times for emerging market economies. Currencies are under pressure from an upturn in the US economy and Russia’s moves in Ukraine have made people nervous.

Azerbaijan, though, seems to be handling all this with aplomb with the successful launch of its inaugural $1.2b 10-year Eurobond.

Analysts said that orders came in for around 4b, making the issue more than three times over-subscribed.

The yield came in at around 5%, roughly 200 basis points over US treasures. This shows that investors feel that Azerbaijan is a relatively good bet at the moment — certainly better than other parts of the former Soviet Union which have been dented by the brewing crisis in Ukraine.

Although analysts have said that Azerbaijan does not need to issue the loan, it may have wanted to put a marker down for any future issues.

It will also help other companies from Azerbaijan gauge how easy, or difficult, it is to enter the debt market. The state-controlled International Bank of Azerbaijan said it may look to enter the debt market this year.

(News report from Issue No. 175, published on March 12 2014)

Uzbekistan publishes dodgy statistics

MARCH 5 2014 (The Conway Bulletin) — According to the Uzmetronom.uz website, many of the statistics published by the state agency are incorrect. It quoted independent economists saying that the government uses favourable data to inflate its achievements. Uzbekistan’s has been reporting a booming economy despite apparent stresses in the system.

(News report from Issue No. 175, published on March 12 2014)