APRIL 15 2016 (The Conway Bulletin) – Halyk Bank, Kazakhstan’s second- largest bank, said it has launched a new banking subsidiary, Altyn-i, which will operate a digital-only model. Altyn-i will operate under Altyn Bank, the successor of HSBC Kazakhstan, that Halyk Bank bought in March 2014 for $176m.
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(News report from Issue No. 277, published on April 22 2016)
APRIL 19 2016 (The Conway Bulletin) – The AIIB, a China-backed international financial institution, said it would fund road projects in Tajikistan and Kazakhstan. According to unnamed sources quoted in the FT, the AIIB will join an EBRD-funded road project in Dushanbe and a World Bank and EBRD-backed ring road project in Almaty. The AIIB has said it is keen to fund infrastructure upgrades within its Silk Road project.
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(News report from Issue No. 277, published on April 22 2016)
APRIL 20 2016 (The Conway Bulletin) – Google and McKinsey formed a joint venture with Kazakhstan’s government to establish a data centre for the mining sector. Asset Issekeshev, minister of investment and new technologies, said that the project was aimed at improving data transparency and project efficiency. Mr Issekeshev told the FT that Polymetal and Eurasian Resources Group have already signed up to the project.
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(News report from Issue No. 277, published on April 22 2016)
APRIL 15 2016 (The Conway Bulletin) – Kazakhstan plans to complete the modernisation of the Shymkent oil refinery by the end of 2017. The Shymkent refinery, which has a capacity of 5m tonnes, makes up 30% of Kazakhstan’s domestic production of petroleum derivatives. It currently operates below capacity and is often closed for maintenance.
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(News report from Issue No. 277, published on April 22 2016)
APRIL 18 2016 (The Conway Bulletin) – Kazakhstan’s President Nursultan Nazarbayev signed into law a deal with member states of the Collective Security Treaty Organization (CSTO) to facilitate the transit of army units. The deal will allow soldiers and equipment to be transferred more quickly across CSTO member states. The CSTO is a Russia-led security group.
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(News report from Issue No. 277, published on April 22 2016)
APRIL 19 2016 (The Conway Bulletin) – Exports from Kazakhstan fell by 34.6% in Jan.-Feb. 2016, compared to the same period last year, the Statistics Committee said. In US dollar terms, Kazakhstan’s trade turnover in the first two months of the year was $8.8b. Imports also fell by 34%. Notably, import/export volumes with Kyrgyzstan, which joined the Eurasian Economic Union in August 2015, fell by two thirds.
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(News report from Issue No. 277, published on April 22 2016)
APRIL 21 2016 (The Conway Bulletin) – Samruk Energo, a subsidiary of Kazakhstan’s sovereign wealth fund Samruk-Kazyna, said it paid 11b tenge ($33m) to double its stake in the Balkhash Thermal Power Plant project to 50% minus one share. It did not say who it bought the stake from although last year Korea-based Samsung Engineering said it wanted to quit the project. The new Balkhash power plant will cost around $4.2b to build, according to Samruk Energo’s latest estimates.
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(News report from Issue No. 277, published on April 22 2016)
ALMATY, APRIL 20 2016, (The Conway Bulletin) — The finish line is now in sight for Kenes Rakishev, a Kazakh businessman linked closely to the country’s elite, who has seemingly made taking over Kazkommertsbank one of his priorities.
In this process, control of Kazakhstan’s largest bank has been ripped from Nurzhan Subkhanberdin, a former opponent of Kazakh President Nursultan Nazarbayev.
A KazKom statement said that Mr Rakishev, 36, will buy out Subkhanberdin’s remaining shares in the bank by the summer. Mr Rakishev is also poised to become the next chairman in May.
“[Mr Rakishev] is expected to chair the board of directors and Marc Holtzman, chairman, shall take the CEO position in May 2016 after the extraordinary general meeting of shareholders,” KazKom said earlier this month.
As of this week, Mr Rakishev owns a 71.23% stake in Kazkommertsbank. When he buys out the rest of Mr Subkhanberdin’s shares, his stake will rise to 86%. Samruk-Kazyna, the Kazakh sovereign wealth fund owns a 10.7% stake in KazKom and the rest is owned by unnamed minority shareholders.
This takeover started in February 2014 when, essentially, the Kazakh government started to offload the debt-ridden BTA Bank onto KazKom and also to use it as a Trojan Horse to dislodge the London-based Mr Subkhanberdin.
Analysts have said the government, with Mr Rakishev as the nominated project leader, forced KazKom to buy BTA Bank from Samruk-Kazyna.
This weakened Mr Subkhanberdin’s control of the bank and started a process that has propelled Mr Rakishev to both being the owner and chairman of KazKom.
The eventual merger of KazKom and BTA Bank last year and the promotion of Mr Rakishev are the biggest changes to Kazakhstan’s banking sector since the Global Financial Crisis of 2008/9, but both the government and Mr Rakishev have been assiduous in avoiding commenting in public about it.
Even so, Mr Rakishev has developed an increasingly high public profile in Kazakhstan.
The son-in-law of the current Kazakh minister of defence, Mr Rakishev shot to prominence in 2008 as the go-between for Timur Kulibayev, President Nazarbayev’s son-in-law, and the British Royal Family when he bought an estate in England from Prince Andrew.
Since then, he has had a hand in some of Kazakhstan’s biggest business deals.
He also, officially, owns a 75% share in industrial holding Sat&Co. and a 20% stake in Central Asia Metals, a copper producer listed in London.
To this list he can now add KazKom.
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(News report from Issue No. 277, published on April 22 2016)
ALMATY, APRIL 21 2016, (The Conway Bulletin) — CNPC, China’s state owned energy company, said the Kashagan oil project will re-start production in June 2017, six months later than the Kazakh government has said it expects a restart.
At a press conference in Moscow, Wang Zhongcai, a vice-president at CNPC, said a launch, by the middle of 2017, was “likely,” Reuters news agency reported.
Just last week, Sauat Mynbayev, head of Kazakhstan’s state-owned Kazmunaigas, said the government forecast production by October and earlier this year, Exxon, which holds a 16.81% stake in the project, had also said it saw commercial production resuming by the end of 2016.
In September 2013, weeks after starting production, the consortium running Kashagan, one of the largest and most complex oil development projects in recent times, was forced to halt operations due to damaged pipelines.
In mid 2013, CNPC bought an 8.33% stake in Kashagan from Kazmunaigas. The share previously belonged to ConocoPhillips.
The other Kashagan shareholders also include Kazmunaigas, Total, Eni, Shell and Japan’s Inpex.
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(News report from Issue No. 277, published on April 22 2016)
APRIL 21 2016 (The Conway Bulletin) – Harich, a small village in north western Armenia, renamed a street previously dedicated to Kazakh President Nursultan Nazarbayev, in retaliation for his perceived support for Azerbaijan over Armenia in the neighbours’ row over Nagorno-Karabakh. Earlier this month the most serious fighting in two decades broke out between Armenia-backed fighters and Azerbaijan around Nagorno-Karabakh.
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(News report from Issue No. 277, published on April 22 2016)