Tag Archives: economy

As global finances wobble, Kazakh stocks drop hard

AUG. 10 2011 (The Conway Bulletin) – Attention may have focused on Western Europe and the US but Central Asia’s biggest financial centre, Kazakhstan, did not escape the turmoil that has gripped world financial markets over the last week.

A ratings downgrade for the United States and worries about eurozone debt have spooked investors. There has been a flight to safety — gold and the Swiss Franc have boomed — as investors have become more wary of risk. Not good news for emerging markets, then.

Tellingly, Kazakhstan has been one of the worst hit stock markets in the world. Between Aug. 1 – 9 Bloomberg data showed the Kazakhstan Stock Exchange (KASE) lost about 22% of its value.

To throw in a few numbers, KASE — which includes the state oil and gas company Kazmunaigas, miner ENRC, copper producer Kazakhmys and the country’s biggest banks — is now valued at around 63% of its mid-February value. Many of the companies listed on KASE have their main listing on the London Stock Exchange where the drop was far less dramatic.

KASE recovered 7% of its value on Aug. 10 but it hasn’t been this low since the start of March 2009 when the world was tentatively starting to emerge from the global financial slowdown.

Of course volatile oil prices play their part in pushing KASE up and down but so does general investor sentiment and they worry about emerging market risk.

KASE may be a relatively minor stock market but it is still a decent weather mast. That said, emerging markets with their potential for high growth rates will always attract investors.

ENDS

(News report from Issue No. 52, published on Aug. 10 2011)

Central bankers jailed in Turkmenistan

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JULY 29 2011 (The Conway Bulletin) – In a scene reminiscent of Soviet times, several central bankers in Turkmenistan admitted during a broadcast on state television that they had stolen millions of dollars, news agencies reported. The bankers were given lengthy prison sentences.

ENDS

(News report from Issue No. 51, published on Aug. 2 2011)

Turkish PM visits Azerbaijan

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JULY 29 2011 (The Conway Bulletin) – Turkish PM Recep Tayyip Erdogan met Azerbaijan’s President Ilham Aliyev in Baku to discuss the countries’ close economic and military ties. The trip was Erdogan’s second overseas trip since winning an election in June and underlined both strong Azerbaijani-Turkish links and recent setbacks in talks between Armenia and Turkey.

ENDS

(News report from Issue No. 51, published on Aug. 2 2011)

Kazakhstan’s GDP grows by 7.3% in 2010

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AUG. 1 2011 (The Conway Bulletin) – Kazakhstan’s GDP grew by 7.3% in 2010, a 0.3% increase from an earlier estimate, the state statistics agency said. In 2009, Kazakhstan’s GDP growth was 1.2%. This annual GDP growth jump reflects the country’s rebound from the global economic slowdown.

ENDS

(News report from Issue No. 51, published on Aug. 2 2011)

Tajikistan starts construction of oil refinery

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JULY 25 2011 (The Conway Bulletin) – Keen to reduce its energy import bill, Tajikistan has begun to build its first oil refinery, media reported. Tajikistan imports 90% of its oil from Russia which imposed an export duty tax earlier this year. The new refinery, 30km outside Dushanbe, is set to open in the second half of 2011.

ENDS

(News report from Issue No. 50, published on July 27 2011)

Tajikistan boasts new silver deposit

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JUNE 21 2011 (The Conway Bulletin) – It is difficult to overstate the potential importance of the Konimansuri Kalon silver deposit in Tajikistan.

The IFC, part of the World Bank, which is advising the government on how best to exploit the deposit, reckons that mining the silver could earn Tajikistan $2b. In 2010 according to the CIA World Factbook, Tajikistan’s total national income was just under $6b.

Reuters reported that the Chinese companies considering bidding for the contract have pulled out and that only Kazzinc, which is owned by Switzerland-based Glencore, and BHP Billiton remain in the race to partner the government.

Tajikistan is poor and mountainous. Inflation is rife and living standards are dropping.

Alongside battling a growing insurgency in the mountains, the government is pursuing a heavy-handed policy against practising Muslims which analysts say is likely to back fire and push people towards militant Islamists.

Corruption is rife in Tajikistan and the economy is reliant on a Soviet-era copper smelter with opaque finances and cash from remittances. Estimates say that money from people working abroad accounts for 50% of the Tajik economy. The illegal drug trade from neighbouring Afghanistan is also an important source of income.

The Konimansuri Kalon silver deposit, located around 50km from Tajikistan’s second city of Khujand in the northwest of the country, isn’t going to change the situation overnight but it does offer some hope.

ENDS

(News report from Issue No. 46, published on June 28 2011)

Oil strike hits production in Kazakhstan

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JUNE 28 2011 (The Conway Bulletin) – The London-listed subsidiary of Kazakhstan’s state oil company, KMG EP, reduced its 2011 oil production target by 4% because of strikes in the west of the country. Hundreds of oil workers have been on strike for a month over pay.

ENDS

(News report from Issue No. 46, published on June 28 2011)

Karachaganak consortium to give Kazakhstan a stake

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JUNE 21 2011 (The Conway Bulletin) – So, an end to the row over Kazakhstan’s participation in the Karachaganak gas field is in sight.

It isn’t official yet but sources at the St. Petersburg economic forum told news agencies the consortium operating Karachaganak had agreed to give a 5% stake to the Kazakh government while the Kazakh government had agreed to pay for another 5% stake.

A deal, perhaps, and an important one.

Karachaganak, in the north-west of the country on the border with Russia, is one of the biggest gas fields in the world. It also produces a fair amount of oil. It is important both for Kazakhstan’s economic development and for investors as a weather mast of government sentiment.

Over the last few years, Kazakhstan has argued it should be given stakes in major energy projects in the country and Karachaganak was the only one it still wasn’t involved with. The government said that when the original contracts were drawn up in the 1990s, it was in a weak negotiating position and the Western companies had taken advantage of that.

The partners in the Karachaganak project are currently — BG Group and Eni with a 32.5% stake each, Chevron with 20% and Lukoil with 15%. They have been negotiating with the Kazakh government over its entry since 2009 when tax claims started appearing against the consortium.

The row had even threatened to derail the project as the government had refused to sign off on the next phase of its development in May until it had been given a stake. With the end of the ownership argument in sight, Karachaganak and investors can all move on.

ENDS

(News report from Issue No. 45, published on June 21 2011)

Georgia threats to pull out of Russia talks

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JUNE 9 2011 (The Conway Bulletin) – Georgia’s delegation to talks with Russia in Switzerland over Russian accession to the WTO threatened to pull out of negotiations after it accused Moscow of plotting two bomb attacks in recent weeks, media reported. Georgia is already a WTO member and can block Russian accession.

ENDS

(News report from Issue No. 44, published on June 14 2011)

Tajikistan eyes Russian Customs Union

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JUNE 10 2011 (The Conway Bulletin) – Tajikistan could join Russia, Belarus and Kazakhstan in a Customs Union, local media quoted the country’s customs chief, Gurez Zaripov, as saying. The Customs Union, which analysts have said extends Moscow’s influence, is due to come into effect on July 1. The Kyrgyz PM has also said Kyrgyzstan may join the Customs Union.

ENDS

(News report from Issue No. 44, published on June 14 2011)