Tag Archives: government

Azerbaijan imposes capital barriers

JAN. 19 2016 (The Conway Bulletin) – Azerbaijan imposed some of the most stringent currency controls in the region to try and halt the slide in its manat currency and to stop a feared wave of capital outflows as the economic storm that has hit the region strengthens.

The most draconian measure was an immediate 20% tax on purchases of property, securities and other investments in foreign currencies.

“People should know that the central bank, other government agencies are in a position to prevent the manat from falling sharply,” Azerbaijan’s Central Bank chief, Elman Rustamov, said in televised comments clearly aimed at shoring up public support. Last week sporadic clashes broke out in regional towns between angry protesters and police.

The Azerbaijani manat has lost 50% of its value in six months and people have lost confidence in the country’s financial system.

Mr Rustamov also said that the Central Bank held enough currency reserves to support the manat, despite a series of reports which suggested that it was running out of money after trying to defend its value unsuccessfully throughout 2015, and that several smaller banks would soon have to merge.

Other measures unveiled by Mr Rustamov to try to boost public support in the manat included allowing people to pay back loans of up to $5,000 at the manat/$ exchange rate prior to the last devaluation on Dec. 21 and cancelling tax on manat bank deposits and dividends.

Azerbaijan has been one of the hardest hit by the economic slowdown that has hit the region. Its economy is dependent on oil which has sunk in price to around $28/barrel from around $115/barrel in July 2014.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Kazakh leader calls for early election

JAN. 20 2016 (The Conway Bulletin) – Kazakh president Nursultan Nazarbayev called a parliamentary election for March 20, more than a year ahead of schedule. Officially MPs asked him to bring the election forward from 2017 because they said that they had fulfilled their mandate. Unofficially, the Kazakh political elite appear to be increasingly worried about civil disobedience linked to worsening economic conditions.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Uzbekistan searches for assets

JAN. 20 2016 (The Conway Bulletin) – Uzbekistan is trying to recover up to $1m of assets frozen in bank accounts in Europe belonging to Gulnara Karimova, the eldest daughter of Uzbek president Islam Karimov, media reported. Ms Karimova has been under house arrest in Tashkent for nearly two years. She was once considered a potential successor to her father. Swiss authorities are investigating her for money laundering.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Georgian President approves redistricting

JAN. 8 2016 (The Conway Bulletin) – Georgian president Giorgi Margvelashvili signed into law a redistricting of constitutional boundaries, part of a move in Georgia to do away with so-called majoritarian seats in parliament. Of Georgia’s 150-seat parliament, 103 are made up of majoritarian, although the size of these seats varies from 9,000 to 150,000 people. The redistricting is the first step in a process designed to even out this imbalance.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Kabyldin leaves KazTransOil

JAN. 12 2016 (The Conway Bulletin) — Kairgeldy Kabyldin, former CEO of KazTransOil, quit as a director of the company, completing his exit from the Kazakh oil transport company. Earlier in December 2015, Mr Kabyldin quit as CEO of KazTransOil, which is owned by Kazakhstan’s Kazmunaigas. After Mr Kabyldin’s resignation, the board named Nurtas Shmanov as the company’s new CEO. He had been a director of KazTransOil since January 2011. Mr Kabyldin, 63, has worked almost his entire career in Kazakhstan’s oil and gas industry. Analysts expect him to be re-appointed to another role shortly.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Fund chief leaves in Kazakhstan

JAN. 13 2016 (The Conway Bulletin) – Berik Otemurat left the Kazakh National Investment Corporation, the unit within the Central Bank that invests money from the Oil Fund, after he gave a series of interviews to major Western publications criticising its strategy. It’s unclear if Mr Otemurat was sacked or he resigned. Eszhan Birtanov, former head of the Kazakhstan Stock Exchange, was named as the new head of the National Investment Corporation.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Editorial: Kazakhstan’s parliament

JAN. 15 2016 (The Conway Bulletin) – It doesn’t happen often that a parliament asks the president to order its dissolution and call for elections. But in Kazakhstan, MPs feel they have fulfilled their obligations and, with one voice apparently, asked for an early vote.

The economic downturn could potentially lead to the formation of organised opposition in Kazakhstan and the calling of snap presidential elections last year and, in a similar fashion, this year would prevent dissent.

Although it was the MPs calling for it, the decision to call for early elections came from the top. The elite wants to consolidate its power within the various political institutions in light of a prospective transition.

President Nurtsultan Nazarbayev has indicated that he is likely to hand over to a successor at the end of his current term as president in 2020. If the transition goes as planned, the successor will be chosen from the political elite that is currently in charge of the major institutional positions.

The name of the new speaker of the Majilis and the percentage of seats that go to the ruling Nur Otan party are the two main things to monitor.

ENDS

(Editorial from Issue No. 263, published on Jan. 15 2016)

Azerbaijan and Kazakhstan diversify investment strategies

ALMATY, JAN. 8 2016 (The Conway Bulletin) — Kazakhstan and Azerbaijan will diversify the investment portfolios of their Sovereign Wealth Funds in 2016 away from low yield bonds and currency holdings to high- risk equity and property investments.

Slow global economic growth has forced Sovereign Wealth Funds to ditch conservative investment strategies in search of higher yields and Kazakhstan and Azerbaijan are following a trend.

Bloomberg News quoted Berik Otemurat, director at the Kazakh Central Bank’s National Investment Corporation, as saying: “We’re sitting on a huge pile of cash and not making real returns. It’s especially urgent to address this, given the gloomy outlook for oil prices and reduced inflows into the National Fund.”

Azerbaijani officials have said that they want to increase the cap on real estate investment in its investment portfolio to 10% from 5%for 2016, as well as raising the cap for equity investment to 15% from 10%. SOFAZ, Azerbaijan’s oil fund, has been buying up high-profile property for the past couple of years and it started 2016 by buying a 19th century palazzo in Milan for 97m euro.

“In 2016, SOFAZ will be implementing investment policy, which makes it possible to get the maximum yield at low risk of capital loss,” SOFAZ said of its of strategy.

But Indra Overland, research professor at the Norwegian Institute of International Affairs, said Sovereign Wealth Funds follow market trends, rather than set them, which generates a risk that will buy at the top, rather than the bottom, of the market.

“This change is probably driven by a combination of desperation over low oil price, dissatisfaction with historically low returns on bonds and worries about the stability of financial markets, especially related to China,” Mr Overland said.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Kyrgyzstan-Kumtor talks collapse

DEC. 22 2015 (The Conway Bulletin) – Kyrgyz government officials quit 2- year-long talks with Toronto-listed Centerra Gold, the company that owns the Kumtor gold mine, over a new ownership structure deal. Talks had focused on Kyrgyzstan swapping its 32.7% stake in Centerra Gold for a 50% stake in the subsidiary that directly owns the Kumtor mine. Relations between the two sides have been strained.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Georgia hunts for new CBank chief

JAN. 6 2016 (The Conway Bulletin) – Georgia’s President Giorgi Margvelashvili has started searching for a successor to Giorgi Kadagidze who will complete his 7-year term as head of the Central Bank in February. Mr Margvelashvili’s nominee will have to be voted in by the Parliament before he or she can assume office.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)