Tag Archives: economy

Currencies: Kazakhstan’s tenge, Azerbaijan’s manat

MAY 12 2017 (The Conway Bulletin) — Pledges to cut output and to support prices pushed up oil to $50.85/barrel, its highest in May, giving support to both the Kazakh tenge and the Azerbaijani manat. They both inched up slightly, with the tenge finishing on 315.54/$1, up nearly 1%, and the Azerbaijani manat hitting 1.6775/$1, also up around 1%.

As the graph shows, the tenge has risen by 8.6% since the start of November, giving the economy and the Central Bank much-needed breathing space. Gains since mid- February, though, have been limited and a deeper look at tenge shows that it has under performed against oil prices. The price of Brent oil has increased by 13.4% since the start of November, far outstripping tenge.

Of the other currencies, the long Victory Day holiday slowed trade and there was little movement, up or down, except with the Uzbek som. This is a tightly managed currency and the authorities have been slowing cutting its value to reflect a general slowdown in the economy. Once again, over the course of the last week, the som’s value has fallen by around 0.8%.

As for equities, it was also a fairly steady week with Centerra Gold gaining the most, up 7.5%. Caspian Sunrise stock is inelastic and changes tend to be wild.

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(News report from Issue No. 328, published on May 12 2017)

EBRD says Azerbaijan’s economy will shrink

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MAY 10 2017 (The Conway Bulletin) — In its updated assessment of the Azerbaijani economy, the European Bank for Reconstruction and Development (EBRD) said that it expected its economy to shrink by 0.5% this year, the second consecutive year that Azerbaijan’s economy will contract, but that it will grow by 2% in 2018. Azerbaijan’s economy has been hit hard by a sharp slump in oil prices since mid-2014.

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(News report from Issue No. 328, published on May 12 2017)

House prices still fall in Kyrgyzstan

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APRIL 28 2017 (The Conway Bulletin) — House prices in Kazakhstan are continuing to fall, an indication that the economy is still struggling to pull out of a deep slump linked to the collapse in oil prices since mid- 2014. The price tracking website homsters.kz said that only in Almaty were prices beginning to recover. The housing market fell sharply after a 50% cut in the value of the tenge in 2015.

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(News report from Issue No. 327, published on May 5 2017)

Economic growth picks up in Georgia

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APRIL 28 2017 (The Conway Bulletin) — Year-on-year economic growth in Georgia accelerated to 5% in the first quarter of 2017 because of an increase in exports and remittances, the statistics service said. The rise beats the Georgian government’s expectations of a 4% rise for the whole of 2017.

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(News report from Issue No. 327, published on May 5 2017)

Currencies: Azerbaijani manat

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MAY 5 2017 (The Conway Bulletin) — Despite a fall in oil price to $48.48 on May 4 and $49.10 on May 5 (that’s the price of a barrel of Brent) the Azerbaijani manat managed to regain some of the ground it has lost in the past few weeks.

Oil and gas are the driver of the Azerbaijani economy but although prices have fallen from around the $55 mark that OPEC has been targeting the manat was trading at 1.6972/$1, near recent highs.

As the graph shows, since the beginning of April the manat has gain 2.2% against the US dollar while oil prices have fallen by 5.6%. The main reason for the slump in oil prices is a concern about growing US stockpiles of oil.

On the equities side of the markets, KAZ Minerals, formerly called Kazakhmys has had a bumpy ride. It shares surged after strong Q1 results showed that output had grown. It hit a 5-week high of 503.5p on May 1 only to fall heavily in the following few days. A sharp drop in the price of copper, its main export, forced down its share price to 445.6p by May 5.

This was a heavier fall than the fall in the price of copper which dropped 5% to $252.85/lb. The fall in copper prices was linked to concern over China’s slowing industry and the failure of US President Donald Trump to deliver on promises to support copper prices.

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(News report from Issue No. 327, published on May 5 2017)

Georgia’s Central Bank raises rates

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MAY 2 2017 (The Conway Bulletin) — Georgia’s Central Bank raised interest rates to 7% from 6.75%, its highest rate since June 2016, because of supply-side price pressure. One of the Central Bank’s key remits is to keep inflation at 4% and it said that one- off price rises, such as an increase in excise duties, were pushing up prices. It also said, though, that it didn’t expect any more interest rate rises this year. Annualised inflation in March was 5.4%.

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(News report from Issue No. 327, published on May 5 2017)

FDI in Kazakhstan jumps to 40%

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APRIL 27 2017 (The Conway Bulletin) — Foreign investment in Kazakhstan jumped 40% to $20.6b in 2016, compared to 2015, investment and development minister Zhenis Kassymbek told media. The jump was mainly linked to major infrastructure projects in the energy and mining sectors, such as the expansion of the CPC Pipeline.

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(News report from Issue No. 327, published on May 5 2017)

Turkey wants to boost ties with Uzbekistan

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APRIL 26 2017 (The Conway Bulletin) — On a trip to Tashkent, Turkish foreign minister Mevlut Cavusoglu said that he wanted to see improved ties with Uzbekistan, a boost to new president Shavkat Mirziyoyev who has been trying to woo his neighbours . Relations between Uzbekistan and Turkish had been strained under Mr Mirziyoyev’s predecessor, Islam Karimov, with the Turkish business community in Tashkent, a sizable and influential group, complaining of being unfairly targeted by the authorities.

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(News report from Issue No. 326, published on April 28 2017)

India wants to boost cotton imports from Kazakhstan

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APRIL 20/21 2017 (The Conway Bulletin) — At a meeting in the south Kazakh city of Shymkent, Kazakh and Indian officials pledged to increase cooperation in the cotton trade. Indian businessmen said that they wanted to increase the supply of cotton from Kazakhstan. Kazakhstan has been trying to develop its cotton sector over the past few years in a drive to move away from rely too heavily on the oil and gas sector.

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(News report from Issue No. 326, published on April 28 2017)

Currencies: Kazakh tenge and Azerbaijani manat

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APRIL 28 2017 (The Conway Bulletin) — Softer oil prices have pushed down the value of the Kazakh tenge and the Azerbaijani manat. The tenge is now trading at 313.8/$1, its lowest value since March and the manat is trading at 1.665/$1, a two week low.

Oil has come off a high on April 11 of $56.23/barrel to be trading at around the $51/barrel mark. The main driver of the dip in oil prices is geopolitical concerns over US intervention in Syria and the spike in tension around the Korean peninsular. Both Azerbaijan and Kazakhstan are price takers and will have to settle for whatever the geopolitical machinations hand them.

On the equities front, it has been a very good fortnight for TBC Bank. It has ragreed a $100m loan from the EBRD to implement the so- called Deep and Comprehensive Trade Agreement with the EU. This is designed to boost trade between Georgia and the EU. TBC Bank’s share price has risen by around 20% this year and analysts are positive.

“Looking ahead, TBC Bank is expected to record a rise in its bottom line of 8% this year, followed by further growth of 14% next year,” said share analyst The Motley Fool. “When combined with its relatively low P/E ratio, this puts it on a PEG ratio of only 0.8. This suggests that more share price growth could be ahead for the company.”

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(News report from Issue No. 326, published on April 28 2017)